Using OKRs to Increase Organizational Learning

This is a draft chapter from the second edition of Radical Focus. It’s coming… eventually. Hopefully soonish. Leave your wishlist for other topics you’d like it to cover, and enjoy the sneak peek!

OKRs, when done with the Radical Focus approach, are designed to create faster organization learning. To explain why, let me give you just a smidgen of learning theory from John Dewey. I promise it won’t hurt.

There are at least three ways to learn, what I’ll call instruction, action, and reflection. All three are important, but the most important is the least practiced: reflection.

Instruction

Instruction is what we think when we think of teaching. Organizational leaders hire some outside person to give a talk or a series of talks about a topic. Udacity delivers online lectures. Or you buy a book on the topic! Instruction is when someone stands in front of you and talks at you, and while that has its uses, instruction is the weakest approach to education by far.

Action

The second educational approach is action, learning by doing. You may be familiar with this style from school when teachers gave us projects and essays. Action is inherently powerful, as it allows you to create a personal relationship with knowledge and learn practical skills. Heart surgeons and pilots both put in hundreds of hours under supervision before we consider them qualified for just this reason — book knowledge often isn’t enough. The skills you get from learning by action go deeper, and remain with you longer, than the knowledge you get from instruction.

Reflection

Almost everyone neglects the last part of learning, reflection. To learn from experience, you need to reflect on what has happened and what it means. In education, this takes the form of writing essays, Q&A, and discussion (and more, if you have a good teacher.)

In the Lean Startup methodology learning is also built in. You build hypotheses that you can then test, and reflect again, to learn in an accelerated way. If you run your OKRs in a quarterly cadence with the weekly checkins and quarterly grading, you harness the same kind of reflection. Your OKRs set a goal, and the priorities — or task list, or road map — you set to get to that goal are just hypothesis. You test those hypothesis every week. Then, on Friday check-ins, you reflect on what your actions have taught you and course-correct for the upcoming week. The reflection focuses and guides practical learning through action. Your hypothesis get better, and you make more goals.

You also make time for reflection at the end of the quarter. You stop in order to codify the learning from your OKRs the last three months, and you grade the effort you’ve made. The grading is not about passing or failing. Rather, the value of grading is holding honest conversations you have while you’re grading. “Why did we not make this? Why did we make it? What did we learn? Where are we sandbagging? Where are we growing?”

Those who do not slow down to learn from their mistakes are doomed to repeat them.

First, Make a Safe Place for Learning

We’ve all worked in a place where no one felt safe enough to speak up. In that context, very little learning happens, and none of it can be social. To have an effective team, much less team learning, you must have psychological safety.

I’m currently writing a new book on the dynamics of team building and continuous feedback, because this is a complex topic deserving of hundreds of pages, not hundreds of characters. Here’s the short version: bringing a group of people into a room isn’t enough to make them a team. An effective team requires personal connections and psychological safety.

People don’t feel safe unless they feel connected.

Unfortunately, Americans are weird about showing their human side in the workplace. Work is treated like another world, where we are machines instead of people with histories and feelings. I recommend creating a social situation where they can talk about their kids, their life, and their family. Building opportunities to see “that engineer” as “Joe, who loves to knit with his daughters,” leads to better team dynamics. This doesn’t have to be a company picnic or enforced happy hours. It can be as simple as starting meetings with “share someone awesome that you saw this week in one sentence,” or starting a new team with an “introduce each other” exercise. The details shared are an excuse for conversation, and conversation leads to friendships. Humans who genuinely care about each other give caring feedback with a helpful attitude. They then grow as individuals and as a team. You’re going to need that when time comes to discuss why numbers are going down when they should go up.

If you want to build psychological safety in your team, another approach is to create formal expectations of how to work together. When working with clients, I lead teams in creating a lightweight team charter norms everyone agrees to adhere to. The charter can and should evolve as the team reflects on the quarter’s work during the larger OKR reflection meeting. It’s critical that it’s built by the team themselves, not handed down from management. The act of making one reveals possible conflicts in expectations, and teaches a team to understand each other’s points of view.

Creating a Team Charter

Once you’ve brought everyone together, ask them to talk about the best teams they’ve ever been on. What worked? What didn’t? Then you ask about the worst teams they’ve ever been on. From those starting points, you build rules of engagement. How do we want to work as a team? Are we going to talk through Slack? At stand up meetings? Do we take notes or have agendas? What happens when someone does something out of line? The point of this exercise is not just the final product — the point is to allow people to speak up, to be uncomfortable, to debate, to have a conversation. By making agreements together out of those hard conversations, the whole dynamic at work changes. Instead of people walking around with resentment after something goes wrong, we build an opportunity to make it go right together. We also agree on what will happen when it doesn’t. This reduces uncertainty and increases safety.

Inevitably situations will arise when there’s a mismatch between the needs of an individual and a team. For example, if you are a conflict-avoider, you still may need to work with a team that believes in arguing everything. That will be hard regardless of the expectations you’ve set, because your natural mode of behaving is different than the culture. A good team charter lets you know what you’re in for in advance. Then you can adapt or choose to leave, without feeling resentful because your expectations weren’t met.

Take the time to set ground rules and build personal relationships. It will make your OKR meetings more honest and effective. And that will accelerate every other result you have.

Social Learning on the Scale of an Organization

When we talk about teams, we often talk about them as if they were isolated entities, and assume that learnings they create exist only within the team. The truth is, in organizations, no one is on only one team. Rafael, head of engineering, belongs to the executive team, the engineering team, and a project team planning to re-architect the company’s major database. In a large company there might be dozens or hundreds of overlapping teams: executive teams, design teams, sales teams, and teams that pop up for a single project. Hanna and Jack’s tea company is a team made up of designers, sales, management, and so on…. even a small start up is a team of teams. As they grow bigger, so does the team network.

When someone is has social connections to other teams, that person will talk about their expereinces. Rafael sees the OKRs process for several teams, and he’ll learn from the reflection for each. He will then argue for a good idea from the project team to be applied to engineering as a whole, or for an executive idea to be demo’d in the small scale in a sample team in her department. Every fast-learning, fast growing team I’ve ever seen shares what they’re learning. In a healthy organization, everyone evangelizes.

When your company gets too big for everyone to attend Friday bragging sessions, you may wish to add some formal cross-team learning events. Fast-learning companies often have lunch-and-learns where various teams present to anyone who shows up (and with free food, people do show up.) Someone can share how their they nailed a tricky key result. Another can rave about a new market insight. Others can share tips for sequencing a road map based on effort and impact. Eventually, everyone becomes very good at watching for learning, and talking about what worked with others. Cross-team learning becomes built into the cadence of your week.

The Friday status email also builds cross-team learning in two key ways. First, very short emails sent to everyone (or available in a public place like a slack channel) will be read. Wonder what the acquisitions team is up to? Read their status email. It takes 30 seconds, and let’s you know if it’s time to pay them a visit. Secondly, the one person who has to read it — the boss — knows who has tripped over a useful insight can can nudge that person to share out in the Friday bragging session or a lunch-and-learn.

Everyone circulates what works and learns from the things that don’t. Failures become something you talk about, and learn from, with other people.

Learning becomes something the company does together.

OKRs are Built for Organizational Learning

Let’s go through another example based on the Radical Focus team. Perhaps Jack notices two restaurant suppliers who look the same to him except that one signed up with TeeBee and one didn’t. At the OKRs reflection team meeting, he might ask the team to discuss why they’re different. “If we can solve this mystery, it could help the company target the people who will buy,” Jack says.

The team brainstorms possibilities. After twenty minutes of discussion, Hanna notices one distributor only sells to low-end restaurants. She suggests that they might want tea bags, not loose-leaf team. Everyone loves the insight, and suddenly the whole company is off in a new direction, studying how to attract the loose-leaf customers and pass on the ones who want tea bags. Or maybe they create a new line of products. How do they test the hypothesis? Then what does it mean for marketing? For packaging? For website design? Suddenly from one discussion, a whole range of hypotheses to test become available.

Each observation results in a hypothesis that must then be validated as true or false. When those insights are validated, they are shared. This become company lore. Then each department and team must create a hypothesis for how to apply that insight to their own team. For example, what else do the more affordable restaurants want, and how does that affect suppliers? Should TeeBee tailor their marketing materials to each? Maybe create a second brand? Every learning we get from reflection is a clue that helps solve the bigger mystery of how to make the business successful.

Not all learning is about customers and products. Sometimes you learn how to learn. Sometimes teams test out ways to work together, and learn what does and doesn’t help the company move forward.

The OKR cadence manifests new insights through awareness, experimentation, conversation, and reflection.When we live that cadence, we learn, and apply that learning. We show down and think, and acts out that thinking to learn at an even deeper level. Through action and reflection, we build meaningful, practical, deep knowledge of the market.

OKRs are built for learning.

Adapting to Change in a Changing Market

As I’ve said, the most important advantage (and asset) a company can have is its speed of learning. The rate of change in the market is only growing. Everyone, from customer service to technical writers to the person who makes your banner art, needs to be learning at an individual and a company level to succeed at the pace we’re talking about. In the 21st century, being cogs in a wheel isn’t going to cut it anymore. We must learn, and learn to adapt.

Living your OKRs in the cadence I’ve described will build in learning. Sure, OKRs help set good goals, but the methodology does more than that. With Radical Focus, you make the social commitment to the objectives and key results. You move toward them intentionally, sharing what you’ve tried and reflecting on how it works as a group, and course-correct as a result of that reflection. Learning compounds through the process. It turbocharges your learning, and therefore, turbocharges your growth as a company.

Just settings metric-defined goals — even if you call them OKRs — aren’t enough. OKRs without focus and a cadence of learning becomes an exercise in making your numbers. That might sound fine, but it has unfortunate consequences. When you judge people’s success by raw numbers without conversations and context, you end up with all sorts of “hacks,” people cheating to hit the numbers because the stakes are high and failure isn’t acceptable. In those circumstances, no one’s getting smarter, they’re all just inflating a balloon that will pop at some point. When you emphasize learning, you’ll fail more, and fail more publicly. That’s the point! By being willing to fail, and then have a conversation about that failure, you’ll learn. You’ll be delivering real value to your market, and growing fast, while your competition is sitting around worried about how they’re going to cheat to make their numbers.

OKRs help you adapt. No one ever truly understands what’s coming tomorrow; OKRs let you navigate the changing world with confidence as you go. This process harnesses one of the most powerful forces in history: humans’ ability to learn. It builds knowledge, keeps you nimble, and allows you to adapt to nearly anything.