OKR is a mode of thinking, work habits, and organizational practice. Only through our continuous review and continuous review of the past to learn the new, can we gradually form this management habit, and this tree can influence this organization and empower the entire ecology.
Share | Zhou Jiafei OKR Practice Expert
Finishing | Si Huan
Source | China Europe Business Review (ID: ceibs-cbr)
First look
at the essence of CBR: 1. In the VUCA era where organizations need to evolve rapidly, KPIs will fall into the dilemma of failure.
2. From an external perspective, OKR is a business assistant tool that links the organization's strategy and project tasks through the decomposition, completion and feedback of goals; and its inherent incentives make it adopted by a large number of new technology companies.
3. The implementation of OKR varies from company to company. The core is to find the combination of OKR's underlying logic and corporate practice.
4. Landing OKR requires the top-down support and investment of the company's top leaders, as well as a suitable cultural soil.
5. The implementation of OKR is also a process of organizational change, which requires three stages of thawing, reforming, and freezing.
We often say that the present is an era of change.
Today, the main value chain of society has undergone great changes. From design, production, marketing, logistics, and operation, all links are actually being re-deconstructed by digitalization. In the process of digital re-deconstruction of the business environment, we have also found that the boundaries of the industry are blurring. We don't know which giant will come out to subvert our lives tomorrow.
The greater the external changes, the more certainty companies must seek. Therefore, we raise a question, can today's organizations keep up with the changes of this era?
In the era of change, KPIs are not enough
The Feishu team has provided OKR services to hundreds of companies after nearly a year of commercialization. In this process, we were fortunate to have in-depth exchanges with the CEOs of dozens of companies, hoping to understand what the CEOs are most concerned about in this era of change.
The number one concern is how to cultivate organizational culture and how to optimize organizational management. Nearly 80% of CEOs are concerned about this issue. This is very interesting, because in the past it was CHO who cared more about organization management. Now more and more organization leaders are concerned about this issue.
The second is the expansion of the team and the refinement of the division of labor. Everyone feels that the organization is becoming larger and larger, and that there are many information breakpoints, and the efficiency has become lower. The leader of the organization is very hopeful to improve efficiency.
The third and fourth concerns are about the same. It is about that with the continuous expansion of the personnel in the organization, managers at all levels may not have a good grasp of the organization's goals, how to help them to achieve and advance with the organization, and Do many employees really put everyone's wisdom on this job and can really meet the challenges of the future?
When I saw these data, what I felt was the inherent tension that the organization No. 1 pursues when faced with the diverse and complex external environment. This tension refers to how our organization can evolve faster than business.
The evolutionary tension of organizations generally has these directions. One is in the strategic part. In the past, the organization would make a five-year plan, which later became a three-year plan, and recently became a one-year plan or even shorter. The continuous shortening of planning time proves that dynamic adaptation is a problem we all face. The second is the organizational form. From the past bureaucratic system, a distributed ecological structure has emerged. The third is culture. This year, many organizations will find that they need to add diverse and inclusive cultural elements because they need to cross the second curve. In this process, more diverse talents are needed to join in and move forward hand in hand with the organization.
I used to do human resource consulting work for a long time. During the period from 2008 to 2015, what service did we provide most for enterprises? The first is to determine the structure and clearly explain what to do; the second is to determine the performance, to clearly explain what to achieve; the third is to determine the salary, to clearly explain what is achieved. The core of so many things that consulting companies do is to help companies move from basic management to lean management. In this process, KPIs are a good thing. But we will find that in the current VUCA era, in some scenarios, KPIs are no longer so effective.
I list several KPI failures.
First, the standard is invalid. Strategy and market goals are constantly changing. For example, my DAU today can reach 500 million, but competitors are moving forward at a faster speed. Should I adjust my goals? It will definitely be adjusted, so our standards must be constantly changing.
Second, the path fails. In the past, when we talked about KPI, there was an important term called layer-by-layer analysis, which represented a kind of path dependence, dependence on top to bottom, and dependence on bottom to bottom. All wisdom is concentrated on the head. However, the current organization is more ecological, and a lot of wisdom actually comes from the boundaries and edges of the organization, rather than the top level. This is the path failure.
The last is the failure of the application. More and more people, especially those born in the 90s and 95s, have entered the workplace. They are very different from the previous generation. They will choose a platform for their work advocatingly and grow together with this platform. So when we use KPIs and monetary incentives to stimulate them, we will find that the effect is no longer as immediate as before. This is application failure.
What is OKR
In the wave of change, various companies have explored solutions in practice. Among them, goal management and performance management have attracted widespread attention because of their very high leverage.
OKR is actually born out of MBO (Management by Object), which is used in Intel and carried forward in Google. Many companies at home and abroad have already used OKR. Not long after ByteDance was established, all staff began to use OKR. Today we have more than 80,000 people, and all of us use OKR. This management tool has been accompanied by the 8 years of growth of Bytedance.
Let's take a look at the connotation and exterior of OKR. From an external point of view, I think OKR is a business support tool, not just an organization-driven tool, it is in the strategy/strategy and projects and tasks, to solve two problems: the first problem, I want to Where to go, what is my goal; the second question, how to achieve this goal. In fact, the company’s daily operation work is inseparable from these two things. When our strategy is finalized, all organizational work and operation work are centered on the decomposition of the goal, the completion of the goal, and the feedback of the goal. This is its external In form.
Why is OKR as a target management method so effective and adopted by so many new technology companies? I think the most fundamental thing is its inner motivation. Studies have confirmed that when the work is more complex and requires more innovation, internal incentives can often exert greater value.
Picture quoted from "Performance Enabling: Beyond OKR" by Kuang Yang
How does OKR work? The core is to find the combination of OKR's underlying logic and the practice of each enterprise. ByteDance is just a way to practice OKR in the soil of China. We are now very happy to see various companies use OKR flexibly in combination with their actual conditions.
In practice, we found that users of OKR are prone to misunderstandings in the process of using them. What is OKR? First, OKR is not a omnipotent management artifact. Many organizations ask: Will the organizational capabilities of OKR be improved? There is a high probability, but there are many different factors. Second, OKR is not KPI's old bottled new wine. We will find that a small number of companies just renamed KPI to OKR, which is not effective. Third, it does not mean fuzzy management. The use of OKR requires O to be aligned and KR to be measurable. In fact, the goals, results and paths are relatively clear.
What is OKR? Through the practice of Bytedance, we believe that OKR is a way of thinking, working methods and organizational practices that allow a group of people to focus on goals, collaborate efficiently, and constantly challenge. We ask ourselves every day, where am I going and what is the main thing I will do today. In ByteDance, we internally communicate the work content of the team through documents and fly-reading meetings. Every time a document is created, what is the O and KR of the project will be written at the top. This has become a daily way of thinking and working methods.
Bytedance landed OKR like this
In ByteDance, how exactly does OKR work?
The first is to see each other, we call openness and transparency. From the first day of use to now, we all hope that the OKR of everyone in the organization can be as transparent and visible as possible. Therefore, many students know that Bytedance employees do not call each other "general", they do not know each other's rank, but they can see each other's OKR online. As soon as I entered the company, I first looked at the CEO's OKR, and I knew where the company was going. Transparency also has an effect, that is, everyone writes out their current goals and organizational goals, representing my commitment to myself and to the organization. Commitment is a very important intrinsic motivation.
Second, focus. We usually recommend that employees list 3-5 O's. When there is a business opportunity in any niche field, all giants will quickly come to this market. However, companies need to invest in one point to achieve results. Behind this is how effective resources can be focused on one point. So we not only hope that the company can focus, but also that every employee can focus.
Third, do challenging things. The purpose of doing challenging things is to stimulate the abilities of employees. Here is a question that everyone is generally concerned about. If the goal is too challenging and not completed, will it affect the promotion and salary increase? The answer is no, OKR and assessment bonus are separated, so that employees can set truly challenging goals, stimulate more creativity, and adapt to an increasingly competitive environment.
Fourth, 360-degree alignment. We emphasize that goals are both top-down and bottom-up.
How to make the flywheel roll in practice? First, setting goals is very simple. Set goals and align goals according to the requirements just now. Second, carry out process tracking. Third, conduct a review.
What is the help of these work to the byte beating? Everyone knows each other's goals, especially the grassroots employees can also know the company's goals, so everyone is very clear in which direction the company is going.
We evaluate a good organization with a very important indicator. In terms of strategy, whether everyone can be one mind or whether everyone has a common goal is relatively achievable in terms of Bytedance. Second, focus on resources and effective operations. Third, efficient collaboration and in-depth work in the organization. With this closed loop of strategy, operation and organization, it helps the company to keep moving forward.
Many students may also understand that Bytedance was established in 2012, and the core product was Toutiao today. At the end of 2015, our scale was still small, about 1,300 people. We just entered the video field that year and were still in the exploratory stage. Some team members made a lot of attempts, which resulted in a significant improvement in business data.
In 2016, the company decided to devote more resources to video, so it launched Douyin in September 2016. Now there are different products in the video field such as Douyin, Watermelon, and Volcano. This is a typical case of a new company groping for its direction while it is moving forward and seizing the breaking point to achieve a breakthrough. Throughout the process, OKR drove employees from bottom to top to challenge greater goals. Once a breakthrough point was found, the company focused on resources from top to bottom.
To implement OKR, these few requirements are indispensable
Many companies think OKR is a good thing and can be tried. But still have to ask yourself why use OKR? Can the value of OKR really be brought out? I think this is the first soul torture that the managers and promoters of an organization have to conduct in the matter of landing OKR.
The second soul torture, is my organization suitable for OKR? We believe that there are several essentials in the process of implementing OKR:
First, the full support and input of the top management, especially the No. 1 position.
Second, there must be a relatively suitable soil or corporate culture that can be changed. Such a soil will be more tolerant of new tools and concepts.
Third, there must be correct methods and handy tools. In practice, we recommend using organizational change thinking to guide the implementation of OKR. Through the process of thawing, reforming, and freezing, the OKR concept is in place, management is in place, execution is in place, and tools are in place.
In the process of thawing, it is necessary to establish more consensus and find the soil where we want to bury this seed; do a good job of management in the process of reform, and link up OKR and performance management on the management side. End, link up with strategy, project management, task decomposition, etc.; finally, freeze, which is the formation of management habits in general. OKR is a mode of thinking, work habits, and organizational practice. Only through our continuous review and continuous review of the past to learn the new, can we gradually form this management habit, and this tree can influence this organization and empower the entire ecology.
We talked about the strong driving force of the business environment, the tension of companies seeking organizational evolution in the face of changes, and the leverage of using OKR as an effective practice. The use of OKR is an effective practice of organizational evolution. We also very much hope to help and witness more companies become beautiful organizations, and more individuals gain nourishment and value in the organization, so that the organization can move in a consistent direction.
This article is based on Zhou Jia’s sharing at the “Top 20 Benchmarking Enterprises in China” summit held by China Europe Business Review.