The Dark Side Of OKRs (And Why We Should Care)
If we could tag one apocalyptic rider for adaptive organizations, it would be "traditional performance management." It is old-fashioned performance management that keeps us in a world of humans as resources, as command-and-control takers, with rigid top-down planning, and solid prevention of curious and exploratively-minded cooperation. Its logic is plan – do – check – act.
A logic, where individual goals are defined top-down from corporate objectives, any doing is checked against this goal accomplishment in the form of "feedback," and carrots are used to enable "pigeon training."
Most of us will agree that all of this is true for old-school management by objectives, but do we realize that some of the new co-creation tools – such as OKRs (Objectives and Key Results) – are maybe not much better?
At its core, management by objectives fulfills three different management functions where goals are to: a) coordinate and align individual and team efforts with those of the organization, b) channel information on those aspects most important from a corporate perspective, and c) create a motivating push.
Organizations that opt for adaptiveness, agility, and resilience have started to reform this goal process to enable decentral coordination and learning by allowing for much more participation, bottom-up input, and co-creation, thereby relinquishing the information monopoly.
For instance, so-called "FAST goals" are Frequently discussed (quicker-paced and more bottom-up), Ambitious (difficult, but not impossible to reach), Specific (concretized by measurable milestones), and Transparent (shared within and across teams).
Hence, these goals take local knowledge onboard and make sure that coordination is not dependent on hierarchy. The same logic applies to OKRs.
Better? Yes, but not all good!
Because irrespective of whether FAST goals or OKRs are applied – the spirit of pigeon training is still present as both bank on "make your goals specific", "be overambitious", and "show everyone what you have accomplished anytime".
Thus, these goals should come with a warning: "May prevent human ingenuity and co-creation to take place."
To be fair, they have a mighty motivation theory on their side when doing this: the goal-setting approach.
This theory has sparked a lot of what we take for granted in business but also coaching, namely: (1) goals are needed, (2) specific goals are better than "do your best goals" as these provide direction and a clear focus, and (3) ambitious goals exert a stronger motivating push than realistic goals.
Yet, in recent years, several studies have shown that the very success factors of such goals carry downsides, which are particularly problematic for agile organizations and co-creation. These are rooted in largely ignored psychological side-effects, which should be taken into account when working with goals.
Specific goals can make you blind
Specific management goals give a focus but at the same time can also act as blinders and thereby prevent out-of-the-box thinking. Do you know the "invisible gorilla experiment"?
In this experiment, participants were exposed to a short video with players passing a basketball. They then got the specific goal to count how many times the ball was passed.
This simple instruction prevented half of the participants from spotting a giant gorilla passing by the ballplayers – it was as if the gorilla was invisible. Why? Because the attention was focused squarely on the task.
Specific goals thus can undermine mindfulness and spotting the unfamiliar, unplanned event. Therefore, it turns out that for agile and creative work that is to respond to changing environments and enable exploration, some amount of goal fuzziness can be helpful.
And by the way – the right amount of fuzziness needs to be teased out by experimentation as there is no handy formula for this.
Overambitiousness creates unwanted overheating
Besides, it is almost impossible to determine the right amount of ambitiousness.
Sure ambitious goals trigger "fire" or, more prosaic, a strong will to succeed. But what has become clear, too, and should not be ignored: overambitious goals – as argued for in FAST and OKRs - carry a lot of risks.
First: if goals are too ambitious and humans never stand a chance to reach these goals, their self-efficacy can deteriorate. However, self-efficacy is a needed resource if we want humans that have a curious, open, and pro-active mindset.
Second: for overconfident humans, on the other hand, ambitious goals create such a will that every means to attain the goals are used. Hence, overambitious goals can also evoke gambling behavior.
Third: overambitious goals – particularly when enacted as "preventing sandbagging" as a standard instrument, can lead to emotional depletion, even to the degree that out of this depleted state, employees start to show unethical behaviors . Hence the manipulation of "ambition" can backfire – enormously.
Transparency meets privacy needs
A further challenge comes with the transparency principle. In its original design, both OKRs and FAST goals bank on individual transparency – everybody knows everybody's goals as well as goal achievements. Yet here, too, psychological research shows some downsides.
First, the balance between transparency and privacy is a delicate one. Too much exposure can backfire as this can feel like a panopticon, a hardly visible but strongly felt control. Consequently, team members start to withhold information or dress-up their image rather than sharing freely and commenting helpfully on the collective work process .
Second, the so-called effect of mere presence triggers either social facilitation or inhibition. Imagine your playing the guitar either alone or in front of an audience. Sometimes, others' "mere" presence leads to a performance never achieved before, but sometimes, felt pressure and anxiety make free and creative play impossible.
The bad news for knowledge and creative work is that the decisive factor, whether performance increases or decreases with others watching is task complexity and difficulty. The more challenging and more complex a task, the more likely fear kicks in, and performance falters .
And now? Unsmart your goals!
Where does this leave us?
Clear goals are still needed to enable thriving and making progress. But these management goals are better co-created and defined on the team level: in this way, teams can define their own criteria of success, while for team-members, some room for maneuver is left.
Also, ungoaled time - free time - enables the needed incubation for creativity and innovation.
Besides, moonshot goals create inspiration – but these ideally come in the form of a long-term "Everest goal" – directed toward abundance and the greater good in mind and not toward specific overambitious output targets.
And finally, goal transparency can be an information sharing and co-creation booster, but not without leaving room for experimentation in privacy.
Or, as an alternative summary: Just because Google made it famous does not mean we should embrace an instrument as "best practice." Sometimes unsmarter, less engineered "nonfoci Rs" might work better.
This is a guest post by Antoinette Weibel, professor for HRM (and secretly also for leadership) at the University of St. Gallen, and Meike Wiemann, a senior researcher, project manager and lecturer at the University of St.Gallen. For more information on Antoinette and Meike, check out their rebel pages: Antoinette's rebel page and Meike's rebel page.