And what leaders misunderstand about OKRs
Key Takeaways
- OKRs often fail due to misunderstandings about their purpose and implementation.
- Leaders mistakenly treat OKRs as a goal-setting tool, which amplifies existing issues rather than resolving them.
- Aligning OKRs with explicit strategy is crucial; bottom-up approaches typically don’t work.
- OKRs should promote real progress, not just act as a reporting mechanism; misuse leads to distrust.
- Inappropriate application of OKRs can occur when teams lack a clear strategy or face chronic overload.
OKRs are deceptively simple:
- Define the objectives.
- Set measurable key results.
- Review quarterly.
Sounds easy? And yet, despite their popularity, most OKR implementations quietly fail.
It’s not because organisations lack ambition. Rather, it’s because they misunderstand what OKRs are actually for and how they really work. It can also be because the company is using OKRs when they’re not the right tool (or not right now), which is what the Strategic Execution Diagnostic is for. That list you see above? It’s the proverbial tip of the iceberg.
The uncomfortable truth about OKRs
OKRs do not fix misalignment. They expose it.
When OKRs fail, it’s usually because they reveal deeper problems that already existed, the vast mass of the proverbial iceberg that sits below the water line:
- Vague or contested strategy
- Too many priorities
- Hidden trade-offs
- Overloaded teams
- Leadership teams that have failed to make real choices
Treating OKRs as a goal-setting framework only amplifies these issues.
So, let’s dive into these mistakes in more detail.
Mistake 1: Treating OKRs as a goal-setting exercise
Many organisations introduce OKRs as a replacement for annual objectives or KPIs. Here’s the pattern:
Workshops are run.
Better-sounding goals are written.
Structure is improved or added.
What they do not change is how decisions are made.
OKRs are not about setting more goals.
They are about forcing alignment around fewer, more meaningful ones.
If leadership teams are unwilling to reduce scope, make trade-offs, and say no, OKRs become decorative, even alienating. That’s recipe number one for strategic flow disaster, or, as I term it; strategic flow blockage.
Mistake 2: Ignoring strategy and starting with teams
A common pattern looks like this:
- Leadership announces OKRs
- Teams are asked to “write their OKRs”
- Alignment is expected to emerge bottom-up
It doesn’t.
OKRs only work when anchored in explicit strategy.
If strategy is implicit, contradictory, or different depending on who you ask, OKRs, like any management tool, will simply mirror that confusion.
Teams end up optimising locally while the organisation drifts. This creates another strategic flow blockage.
Mistake 3: Measuring ambition instead of progress
Another failure mode is the obsession with stretch.
Objectives become aspirational slogans:
Key results become loosely defined indicators of effort.
“When you promise 100%, you better give me 120% or don’t bother showing up.” This is a real world example from one firm. The problem? It encourages sandbagging – the practice by where people set what sound like really stretchy targets but are, in reality, ones they know they can achieve with ease.
This feels motivating in the short term, but destroys trust over a relatively short period of time.
What happens?
- Leaders stop believing the numbers.
- Teams stop believing the process.
OKRs should make real world progress visible, not just intention.
Mistake 4: Bolting OKRs onto broken delivery systems
OKRs are often introduced without any consideration of:
- Capacity
- Flow
- Dependencies
- Work already in progress
The result is predictable.
Teams commit to objectives they cannot realistically deliver.
Everything becomes “high priority”
Delivery slows, frustration rises, and confidence drops.
OKRs do not replace the need to manage flow.
They depend on it.
Mistake 5: Treating OKRs as a reporting mechanism
When OKRs become a reporting exercise, they fail quickly.
Weekly check-ins turn into status updates.
Quarterly reviews become justification sessions.
At that point, OKRs add overhead without improving decision-making.
Used properly, OKRs are a leadership tool, not a performance reporting tool.
They exist to provoke better conversations and sharper choices.
One of the worst ways to approach Key Results is to give each one a RAG (Red, Amber, Green) status and then treat red as failure and green as on track. It’s important to learn how to read the data. For instance:
- Green could be telling you that things are on track and moving in the right direction. Equally, it could signal that the key results were too easy to achieve or that you’ve been measuring the wrong thing.
- Red could signal that things are seriously off track, but then the question is why? Was the result set impossible to reach? Were you measuring the wrong thing (see the pattern here?).
Understanding what the data means is a learnt skill that comes with time and should not be rushed. Patience, as the old saying goes, is a virtue.
Mistake 6: OKRs are being used in the wrong place
Notwithstanding our advocacy for OKRs, we would be the first to tell you: “OKRS are not suitable for every team within the organisation.”
Why do we say this?
Consider whose work helps to execute the organisation’s strategy?
Developers, sure.
Human Resources, yep.
Finance, absolutely.
What about these real-life examples we’ve come across:
Kitchen porter?
EV installation engineer?
Office cleaner?
Whilst it is useful for them to know the strategy of the company, they don’t have to define their own OKRs or even know what OKRs are.
There is a famous (largely considered apocryphal) inspirational anecdote from 1962, where President John F. Kennedy asked a NASA janitor what he did, and the janitor replied, “I’m helping put a man on the moon,” perfectly encapsulating how every role, even sweeping floors, serves a larger mission. Note, the janitor didn’t say “I have three Key Results the first one being…” It’s enough for the janitor in this story to understand strategy at the level of the overall Mission.
Going too deep and too wide puts more burden on the organisation and steals focus from where it can be more usefully deployed.
What OKRs are actually for
So, what, then are OKRs actually for?
OKRs are a decision-alignment mechanism.
They help leadership teams:
- Make strategy explicit
- Translate intent into action
- Align investment and effort
- Test whether priorities are realistic
- Learn faster from outcomes
- Make informed, data-driven, decisions that enable faster returns
OKRs do not work in isolation.
They work when combined with:
- Clear strategy
- Explicit trade-offs
- Portfolio-level prioritisation
- Visibility of flow and constraints
This is why OKRs succeed in some organisations and fail spectacularly in others.
When OKRs are the wrong answer
I’ve already outlined (in Mistake 6) how going too wide and too deep presents a threat to the successful deployment of OKRs.
Here, then, are some other situations where OKRs will not help, at least not yet:
- When strategy is undefined or politically contested
- When leadership alignment is weak
- When overload is chronic and unmanaged
- When trust is low
In these cases, OKRs will surface the problems, but they will not solve them.
For 1 and 2 in the above list, sorting out those problems comes first; for 3 and 4, it is possible to start the process of OKRs at the same time but you need to build trust and sort out overload within the organisational system of work (or ways of working) before layering OKRs onto the relevant teams.
Using OKRs properly
When OKRs are used as part of a broader Strategic Flow system, you will see the following changes:
Leadership teams gain clarity.
Trade-offs become explicit.
Delivery becomes more predictable.
Confidence returns.
This is not because OKRs are magical. They’re not.
It is an outcome that occurs naturally when they are used for what they are designed to do.
If you’re exploring OKRs
If you are considering OKRs and want them to improve execution rather than add process, the question is not:
“How do we implement OKRs?”
It is:
“What do we need to change so OKRs can work?”
That is the conversation worth having.
Our Strategic Flow Accelerator is designed to fix these specific OKR failure patterns.
