The pursuit of objectives promoted by goal management systems such as OKRs (Objectives and Key Results) and the enablement promoted by Legitimate Leadership sometimes fit uncomfortably together. But with conscious design, they can be integrated to enhance and cement each other and become two sides of an equation.
OKRs are about setting inspirational goals and pursuing them with discipline; Legitimate Leadership is about intent and culture. OKRs are a system for identifying and working towards desired outcomes. A company should first build a team and a culture, then elevate its performance through goals or OKRs.
Both Legitimate Leadership and OKRs are journeys and neither is done in the short term.
These were among the insights shared in a Legitimate Leadership webinar entitled OKRs And Legitimate Leadership: Competing Or Complementary? held on 14 October 2021. The webinar was attended by about 70 people.
Paul Barker of Step Advisory, a strategy consultancy, gave an introduction to OKRs. Then there was input from Ian Munro of Legitimate Leadership and from Tim Philip and Miles Lambie, from Salary Finance. Salary Finance is a UK-based fintech company which has applied OKRs from its inception six years ago, and which has also applied Legitimate Leadership for the past four years.
Paul Barker said there is big hype around OKRs, mainly due to the storybook of John Doerr, Measure What Matters: OKRs – The Simple Idea that Drives 10x Growth. Doerr implemented OKRs for Google. Since his book’s first publication in 2017 a large number of other books, whitepapers and guides on OKRs have been published, including publications from Step Advisory. But, Paul asserted, OKRs are not a new fashion; they speak, like Legitimate Leadership, to the inherent nature of human beings. They are designed to look for better ways of doing things, for “more effective execution”.
“They harness the adrenaline and dopamine systems to get us going, and keep us going, in pursuit of big goals. We do this by setting OKRs as objectives or goals. These aspirational goals release adrenaline in those concerned with them. They are articulated as inspirational moonshots which are sometimes fluffy, but we make this more real by setting Key Results linked to them – specific, measurable and quantitative, to answer the question, ‘How do you know if you have reached your Objective?’
“When the goals have been reached, a release of dopamine makes us feel good and gets us into the next cycle of OKRs, and the next cycle of adrenaline releases.
“We also apply this to individual goals. But how do we use this to make teams more successful? Yuval Harari (a public intellectual – editor) has written that large numbers of strangers can cooperate successfully by believing in common myths. OKRs are stories we tell each other – stories of hope for a certain future which we create together. They are ’common myths’.
“So how do we get a community to work together to pursue such myths?
“So are OKRs and Legitimate Leadership competing or complementary? If the goals are mechanically cascaded and individuals are ranked and rated, then they compete. If the goals help teams to work together and create organic conversations, then they are complementary and indeed OKRs and Legitimate Leadership cement each other.
“In reality, companies (like Google) are successful not because they use OKRs; they use OKRs to leverage their already-empowered product team model.”
Ian Munro of Legitimate Leadership said that he is continually being asked, “Should we be using Legitimate Leadership or should we be doing OKRs?” – or being told, “We don’t need Legitimate Leadership because we already have OKRs.”
“But this assumes we are talking about the same thing, which we are not,” he said. “OKRs are about goal management. Legitimate Leadership is about intent and culture.
“What does Legitimate Leadership aim to deliver?
“So the two are not complementary or competing because they are not the same thing; they are two sides of an equation.
“How complementary or competing they are in practice will depend on three things:
“So whether two frameworks compete or complement is up to you and your intent; whether you have deliberately integrated them; and where ownership in the line is for both.”
Tim Philip said Salary Finance first implemented OKRs top-down. This might have been relatively appropriate for its start-up stage, but it is now done more collaboratively. A few years later Salary Finance began implementing Legitimate Leadership, by which time it had grown to 100-150 people and it needed to ensure that its leadership was strong and well-aligned. So for four years it has been implementing care and growth and enabling of teams – but at the same time balancing this with OKRs. But now, having grown to about 250 people, Salary Finance is moving from start-up to scale-up, and it needs to work less top-down and create innovation throughout the organisation, with a better understanding of what and why it is doing things.
With this transition, he and others re-read the Doerr book and realised that it was much less of a top-down methodology (which can quickly turn into a box-ticking exercise and be largely motivated by fear), and more a communication technology from top to bottom to understand ‘why’ from a business and operational perspective.
“So this was conducive to us having much better conversations,” he said, “and, through that, focused thinking. We have been driven by revenue and growth. But through the deeper contributions of OKRs and spending time discussing ‘why’ we have more emphasised what a particular area can contribute and how it can be motivated and empowered towards the key results. So we did OKRs not in the way they were designed to work, but we are understanding them better now – in the intent of enabling others. In this regard Legitimate Leadership’s care and growth and OKRs’ desire for motivation go hand-in-hand.”
Miles Lambie commented that the Doerr book indicates the ‘why’ as well as the ‘what’. Although Salary Finance may not have done OKRs the optimal way initially, they have learnt a lot from the experience. And Legitimate Leadership has emphasized the clear line between the individual and the objectives of the company, which is compatible with OKRs. The line manager is bound to make all members of his team understand how they contribute to the company’s objectives.
“OKRs offer the means and ability to create a team of entrepreneurs. But they can clash strongly with Legitimate Leadership in accountability. OKRs do tend to try and hold people accountable for outcomes whereas Legitimate Leadership holds them accountable for contribution.
“We still do this, but at a team level of objectives – and it is still possible to key in Legitimate Leadership’s contributions. You can get or not get an objective through luck or unluck, or someone else’s hard work, which is important.”
So are OKRs for teams but contribution for the individual?
“We see the nature of OKRs changing. There is a dream of OKRs being all numbers but that is impossible. OKRs do work better at team level; at the individual level it is more about contribution.”
Paul Barker said that there is no right way to do OKRs, only “what is right for you”.
“Doerr has created an image of OKRs cascading down from the top, to teams and individuals. But we have never seen individual OKRs where the framework is unlocked. It helps teams to work together to get desirable contributions. But someone needs to take accountability for OKRs.”
He said OKRs were developed after management by objectives (MBOs) and evolved from them, so they are closely linked. MBOs were, in their time – the 1950s – revolutionary. MBOs are individually-based and linked to remuneration. Before MBOs, management was by task. By contrast, OKRs try to create an environment where risk can be taken. Done right, they should not encourage under-promising and they should create a culture of trust for moonshots.
Miles Lambie said as Salary Finance has grown, there have been some problems with applying “one size fits all” OKRs in different parts of the business. There have been differences in implementation in different parts of the business.
So, are OKRs to be achieved at all costs, and isn’t it a massive issue if OKRs are not achieved?
Tim Philip said in Salary Finance there are aspirational OKRs, which are relatively flexible, and committed OKRs, which are more inflexible. There is opportunity within the framework for different levels of outcomes. And there is reality, which results in the objectives having to change due to environmental factors.
“OKRs are not set in stone and you can debate and change during the quarter. If the intent is top-down, there is less flexibility, but if OKRs are done right then there is flexibility. OKRs are probably best to set long-term so that key results may change in the meantime, but long-term the main objectives remain.”