People still habitually understand and measure everything based on the old KPI thinking.
Editor’s note: This article is from the WeChat public account “China Europe Business Review” (ID: ceibs-cbr), author: Peng Haiyan.
No tool or model is perfect, and no solution can 100% solve business problems. Whether using OKR or KPI, finding a suitable performance management method, changing cognition, and establishing the soil is the right way for an enterprise to carry out management innovation.
First look at the essence of CBR:
01. The strong KPI culture will not end automatically. People still habitually understand and measure everything based on the old KPI thinking.
02. The essence of OKR is to motivate people, but in the process of using OKR, the biggest resistance is not ability or resources, but cognition, especially the cognition of top leaders.
03. Whether it is OKR or KPI, the change of thinking is more important than the use of tools.
04. Putting aside the essence of performance management to talk about KPI or OKR is a false proposition.
In the era of artificial intelligence, organizations are no longer a pyramid structure (hierarchical), but tend to be flat and networked. All nodes in the organization must be able to collaborate freely and quickly respond to customer needs. Organizations need to become more agile and flexible. As a simplified goal management tool, OKR emphasizes the decoupling of results and assessments, quickly responds to market changes, stimulates employees’ internal initiative, full coordination and strategic focus… However, this exotic product from Silicon Valley is being implemented in Chinese companies. It seems to have undergone a variant, the variant is the three letters that everyone is very familiar with-KPI.
The myth of OKR is broken?
“The OKR of the leader, the KPI of the bottom layer.”
“KR once a month, I think of baldness.”
“OKR asks you for ideas, it can be considered as signing and betting, and then the KPI will come to the realInternational assessment. “
“Stop calling OKR, just call Zhonghua Garden KPI!”
“OKR is sometimes not OK.”
Recently, in an Internet workplace forum, complaints about OKR have aroused a lot of onlookers and discussions among workers.
In the past two years, OKR has become popular among Internet companies such as Google and ByteDance. It seems that if you do not adopt OKR, your management will not be able to keep up with the tide of the times.
The boss gave an order to implement OKR internally, but the company did not conduct much training and understanding of OKR. Seeing that so many giants are using it, let’s keep up with this trend. This is a portrayal of the introduction of OKRs by most companies. Everyone is not fully prepared for the nature of OKRs and the soil environment. The more standard actions are required, the more employees are tired, and the performance of the entire company is not good. Improved, the efficiency has dropped.
As a result, OKR has become a “variant KPI in employees’ mouths. The company just changed the name of performance appraisal, and the work pressure itself is very heavy, and the appraisal results are more frequent.” OKRs have become worse than KPIs that everyone complains about. A performance appraisal tool for internal papers.
As the saying goes, no matter how high you stand, you will fall. Let’s take a look first, how did OKR be pushed to the altar step by step?
The full name of OKR is “Objectives and Key Results”, which is a goal management tool. To truly understand OKR, you have to mention the father of Google OKR-John Doerr (John Doerr).
In the 1970s, John Doerr worked for Intel and was the first group of engineers who came into contact with OKR. The inventor of OKR was Intel’s then CEO Andy Grove (Andy Grove). The legendary CEO who was regarded as an idol by Steve Jobs not only put forward that “only paranoia can survive”, but more importantly, set off a performance change at Intel, allowing OKR to successfully enter the stage of history.
After that, John Doerr left Intel and devoted himself to venture capital. He invested in Google in 1999 and brought OKR management to Google, helping Google create myths in the Internet field one after another.
Although Andy Grove first invented OKR in the 1970s, this management method is now widely usedKnowing, but because of the vigorous spread of John Doerr.
John Doerr once compared himself to an “OKR planter” in a TED talk, and said that he was a totally unintentional move, introducing OKR to the two founders of Google who were still in their own garage at the time. People-Larry Page and Sergey Brin, their reaction at the time was “Anyway, we have no other way to manage this company, so we might as well give it a try.”
Since then, Google has used this method internally to manage work goals. Then Google’s Gmail, Chrome browser and other products are inseparable from OKR. With LinkedIn, Twitter, Microsoft, etc. successively adopted by the company, OKR has gradually become popular in Silicon Valley.
The OKR trend that swept Google has gradually spread to the country. In 2013, domestic Internet companies began to notice this management method, and began to spread and practice OKR, including the beating of OKR fans.
Established in 2012, Bytedance has adopted OKR since its inception. With the successful rise of Bytedance, domestic attention to OKR has continued to increase, and this tool has also been regarded by many giants and startups. Management “Elixir”.
From Huawei to ByteDance, from Baidu to Xiaomi, Ali, JD, Tencent, Netease, Meituan…Many domestic Internet giants have begun to abandon KPIs and introduce OKRs in the past few years.
For a time, OKRs are in the limelight. With KPIs being criticized more and more, OKRs are regarded by most companies as a good tool to replace KPIs.
It seems that as long as you use OKR, you can stimulate everyone’s initiative and succeed in an uncertain business environment. OKR has been pushed to the altar step by step.
It is obviously a goal management tool, why do everyone use OKR as a performance appraisal tool?
Laszlo Bok, the former chief talent officer of Google, said: Even if people are dissatisfied with the old performance management, they will not automatically and spontaneously say good about the new performance management. The strong KPI culture will not end automatically. People still habitually understand and measure everything based on the old KPI thinking. They will naturally ask in their minds:
Without the assessment, why are employees willing to challenge? Will it be more lazy?
Will employees do whatever they want, which will cause the organization’s goals to get out of control?
Without KPI as an assessment tool, will supervisors lose protection when handling performance complaints?
I compressed the KPI cycle to be shorter, made the KPI public, and allowed employees to formulate some of the KPIs by themselves. Does the KPI become an OKR?
This may explain why there is a management “weird” of “10 OKRs and 9 KPIs”.
Before you really understand OKR, don’t use it lightly.
When managers contact OKR, most of them will ask such questions: “What is the difference between OKR and KPI? What is its value and function?”
Any kind of new theory and method has its background.
As we all know, KPI (Key Performance Indicator), or key performance indicator, is a quantitative indicator to measure employee performance and is related to employee performance appraisal.
The limitations of KPIs are self-evident. Since KPI assessment is related to the results of incentives, it has a strong orientation. Once the organization chooses the wrong KPI, it means that employees will execute the wrong instructions, which may cause catastrophic consequences to the organization.
KPI emphasizes the completion of indicators and aims to improve productivity, but it is easy to stifle the innovation of employees and affect the morale of the organization and employee relations.
In the industrial age, organizations mainly rely on improving the efficiency of machines to increase labor productivity, and the completion of task indicators is the main goal of the organization.
In the information age and the intelligent age, people have become the most important resource of an enterprise. The key to improving organizational effectiveness is to enhance the vitality and creativity of the organization. KPI, the “carrot + stick” role, cannot take on this important task.
“A self-driven employee can have an order of magnitude difference in efficiency compared to a passive employee. However, this organizational ability is not innate, but needs to be cultivated and built deliberately.”
As a result, many companies have begun to implement performance management reforms, turning their excessive obsession with performance indicators to focus on achieving key goals and results.
In fact, OKR is just a goal management tool, not a performance testAlthough the nuclear tools, OKR and KPI are similar, there are many differences between the two in nature.
Picture: The difference between OKR and KPI
To sum up, OKR is a goal management tool, or a mode of thinking that can promote employee collaborative innovation, and KPI is mainly an assessment tool. OKR mainly emphasizes the advancement of the project, while KPI mainly emphasizes the achievement of goals. The former requires how to complete an ambitious project more efficiently, while the latter emphasizes how to achieve the predetermined goals with quality and quantity. Different from KPI maximizing and focusing on completing indicators, OKR weakens the relationship between performance and rewards and punishments, and its core advantage is to stimulate innovation.
OKR everyone said yes, why is it easy to fail in China?
The motivation for companies to introduce OKRs is good, but why did they go further and further in the end, or return to the old KPI path? Why is our OKR annoying?
This has to start from the source of performance management.
Whether it is in the industrial age or the information age, managers always hope that a “management panacea” can appear, which can solve the problem of employees’ insufficient execution of performance goals once and for all. Sustainable development.
Once, managers cheered for the emergence of KPIs. In the eyes of many managers, as long as the KPI is set for each employee in the organization, as long as everyone works hard toward the set goals and achieves the goals, the company can stand firm in the competition. However, things did not develop as they wanted, and no matter how perfect KPIs were, they couldn’t spur employees to keep running like machines, so everyone started to point the finger at KPIs.
Actually, it is not the KPI tool that is wrong, but the person who uses the tool. When the manager regards the enterprise as a machine that runs in accordance with the prescribed program instructions, and regards people as a part of the machine, The goal of sustainable business operations is destined to be difficult to achieve.
The essence of performance management is to stimulate the potential of employees and help them improve their performance. The most important thing to note is that the means of motivation and restraint must be based on motivating employees.
“OKR is not a panacea. The essence of OKR is to motivate people, but in OKR’sIn the process of using, the biggest resistance is not ability or resources, but cognition, especially the cognition of the top leader. “This is an important reminder from “Performance Enabling” author Kuang Yang to companies when they use OKR.
From 2015 to 2018, Kuang Yang led the design and development of Huawei’s OKR methodology and OKR IT vision system, which are now widely used in Huawei. Regarding the various problems in the implementation of OKR in Chinese companies, Kuang Yang believes that the key to successful implementation of OKR lies in the leader and culture.
Whether it is OKR or KPI, the change of thinking is more important than the use of tools. Many people regard OKR as a performance appraisal tool similar to KPI, essentially ignoring the cultural soil of trust, transparency and independence behind OKR.
OKR emphasizes the self-driving power of people, and the motivation stimulated by challenging goals has a lot to do with the educational differences between the East and the West. Western education encourages innovation, pays more attention to human self-drive, inspires people to challenge their limits and accomplish things that seem impossible. And most Chinese employees grew up in the background of exam-oriented education, accustomed to passively accepting external forces to move forward, taking completion of their goals as their own responsibility, and even the goal of most people is to complete the task is very good.
Picture: OKR frame
Picture source: “OKR: Target management tool from Intel and Google”
In fact, whether it can stimulate employees’ intrinsic motivation and creativity, and thereby improve organizational capabilities, is the result of multiple factors such as organizational structure, talent management mechanism, performance, leadership, culture, etc. If only an OKR tool Just want to achieve such a goal, which is doomed to go astray in the implementation of OKR.
The following is a conversation with Kuang Yang.
Abandoning the essence of performance management to talk about KPI or OKR is a false proposition
Central Europe Business Review (hereinafter referred to as CBR): In the process of implementing OKR, domestic enterprises have encountered many chaos. For example, OKR has been made into KPI, and various problems have also appeared in the setting of KR. Do you think there is a problem? What is the root cause of this phenomenon?
Kuang Yang: The root cause is that everyone does not understand the motivational nature of OKRs and KPIs. OKR is a way of performance enabling. Performance enabling is aimed at stimulating employees’ intrinsic motivation. Intrinsic motivation is to make employees love their work. It is to work proactively because of love, not just to get a share. Reward or avoid a punishment to do things passively, thereby releasing its creative new performance management method. It is the 3.0 stage of performance management.
As a traditional performance management method, KPI is the 2.0 stage of performance management. It can bring strong execution, but it can easily stifle the creativity of employees.
In the process of introducing OKRs, enterprises did not realize the nature of OKRs and KPIs, thinking that OKRs are a panacea for all diseases, and the result must be that they are wrongly applied as KPIs where OKRs should be used.
CBR: At present, most of the Internet companies and high-tech companies that implement OKRs in China, such as Huawei, ByteDance, etc., are OKRs applicable to all companies? For traditional enterprises, how to implement OKR?
Kuangyang: I always think that OKR is applicable to all companies.
The essence of OKR is to inspire people’s intrinsic motivation and to meet the three basic psychological needs of people’s autonomy, competence, and relationship. These three basic psychological needs are universal, whether they are employees of Internet companies or high-tech Employees of enterprises, or employees of traditional enterprises, are eager to take control of their own work, and are eager to find a sense of competence in their work, and they all hope to maintain a healthy working relationship with their superiors and colleagues at work.
Only speaking, the Internet and high-tech companies emphasize innovation to win and need creativity. This is what OKR can greatly promote, so it is more supported by the Internet and high-tech companies.
Nowadays, almost all traditional enterprises are being redefined by the Internet and technology. If traditional enterprises do not transform, they will inevitably decline and be subverted. All tasks that can be executed repeatedly and that can be followed will be gradually replaced by machines in the future.
Just like when you drive into the parking lot today, almost all payment is smart. Traditional property companies are also transforming into smart property companies, so traditional companies also need to think about how to innovate. From this perspective, traditional enterprises also need OKRs.
Of course, traditional enterprises will still have a lot of partial execution work before the transformation is successful. At this time, KPIs are still needed, OKR and KP are available.I coexist.
CBR: Compared with other Internet companies, has Huawei encountered some obstacles and setbacks in the process of implementing OKR? How can we implement OKR smoothly internally?
Kuang Yang: OKR is not just a simple goal management task, it is a work philosophy and culture. OKR insists, based on experience, it takes at least 1-2 years before it can be internalized into the corporate working philosophy.
Huawei’s implementation has not been smooth sailing, and Huawei has also experienced a long period of adaptation, but Huawei is good at persisting, and has always had a reform introduction philosophy of “first rigid, then solidified, and then optimized”.
In addition, when Huawei is implementing OKR, there is a small OKR promotion alliance inside. This alliance has a group of managers and HR who always believe in the value of OKR. They are the evangelists of OKR and continue to influence managers. As a result, excellent OKR practices continue to emerge internally, and finally more managers can see the value of OKR and are willing to practice OKR, forming a good virtuous circle.
CBR: Some people say that to talk about KPI or OKR without the essence of performance management is a false proposition. What do you think of the essence of performance management? What do you think are the elements of successful implementation of OKR?
Kuang Yang: The essence of motivation, from no motivation, to external motivation, to internal motivation. The essence of performance management is to motivate people, and assessment motivates people’s execution ability. OKR motivates people’s creativity. Enterprises must know exactly what they want?
KPI will be a good tool if you want to execute. This is also one of Huawei’s success in the past 30 years. It has prompted Huawei to keep catching up and eventually becoming the leader. However, after becoming a leader, how to continue to lead after there is no longer a leader in the road ahead, at this time KPI can not help, it needs OKR to play a role, to stimulate people’s inner motivation, and thus bring creativity.
Successful implementation of OKR requires three conditions: one is that the business is an uncertain business, which is an exploratory and creative work; the other is that managers should tend to authorize rather than control; and the third is that employees must have strong self-driven Power, belongs to the self-improvement hoof type without waiting for the whip. If these three conditions are met, the company will be able to develop OKRs like a duck, and the company can quickly see the value of OKRs.
CBR: How to set OKR? Can you give a specific example to illustrate?
Kuangyang: Everyone can set OKR in the form of a co-creation meeting. A group of people discussing with each other can inspire each other and at the same timeThrough this kind of meeting, the OKR can be aligned up, down, left and right. When formulating OKR, we must first determine O (target), O should be as qualitative as possible, inspiring, and play a role in building a church.
Only when O clarifies, KR’s discussion is valuable, the direction is wrong, no matter how much it is done, it will be useless. KR (Key Results) should be quantified as much as possible and can support the achievement of O. Each team has a maximum of 5 O (objectives) and each O has a maximum of 4 KRs (key results).
For example: a customer service department tries to break its own cost center positioning, trying to create more value for the company, its OKR can look like this:
O: First realization of departmental profitability
KR1: Build a service center 1.0 to support access to at least 2 merchants
KR2: Empowering platform merchants, TOP merchant service scores increased by 10%+
CBR: How to score OKR? Or should it be scored? How to ensure the objective and fairness of the score?
Kuangyang: OKR should have a scoring mechanism. The score of OKR is usually between 0-1, and 1 point means that the goal is very challenging. Generally, an OKR score between 0.6-0.7 is more appropriate. However, OKR scores should not be directly related to performance, otherwise there will be conservative targets.
Because OKR scoring is used for improvement rather than performance appraisal, the purpose of scoring is to understand the current status as accurately as possible, so OKR scoring is mostly based on employee self-evaluation.
It is generally recommended to review the OKR scores at the team weekly meeting, so that other students on the team can give feedback on the OKR scores of employees from different perspectives, so as to better help employees make objective and accurate judgments.
CBR: Is OKR linked to performance or salary? OKR is not tied to performance, how can the effective implementation of OKR be guaranteed?
Kuangyang: The direct OKR should be decoupled from the performance appraisal, otherwise it will become a KPI. OKR emphasizes process follow-up, through team goal co-creation, continuous OKR review and review in the process, to ensure the continuous achievement of OKR.
The success of the future organization depends on the organization’s advance insight into the external environment and the underlying logic of the business. This requires the organization to form a network so that every employee can burst out of potential.
The introduction of OKR is not only a reconstruction of the organization’s existing performance management system, It is a subversive change in the way of thinking and behavior of employees. As John Doerr said, “Change is a journey, not an event.” OKR cannot replace wise judgment, strong leadership or a creative culture. But when these basic elements are in place, it can take you to the top.
Part of the pictures are from the Internet and have been deleted by infringement.