Table of Content
1. The relationship between OKRs and North Star metrics
The relationship between OKRs and North Star metrics
Similar to the relationship between a KPI and an OKR, it is important to understand the role North Stars play when it comes to OKRs.
What is a North Star Metric?
North Stars speak to the fundamental human need for safety and control. The urge to feel secure in their environment. Just as in their private life, human beings crave a certain level of stability in the workplace.
The North Star of your organization is your mission statement
It’s the BIG PICTURE you can rely on even if everything else changes.
Usually, you wouldn’t alter your North Stars too much over time, which is why they can offer clear direction and focus. They are the anchor for your actions. The purpose of your north star is to help you and your employees make informed decisions today. And ultimately guide you in drafting OKRs that align with your big picture.
The WHY matters
The people in your organization need to know your north star. They have to understand why they are doing what they are doing. When your team shares your vision, both engagement and performance increase.
Well-known North Star Metric examples are:
- Spotify = ‘Time spent listening‘
- Airbnb = ‘Number of nights booked‘
- Quora = ‘Number of questions answered’
OKRs are a ‘break-down-tool’
They help us move from PLANNING to DOING. A big audacious north star like ‘Make work fulfilling for everyone’ needs to be broken down into smaller chunks that motivate action, so it doesn’t remain ‘wishful thinking’.
OKRs move your north star, which is..
.. into the realm of everyday behavior and actions that are
➡ subject to change
➡ flexible & to be iterated
Goal tree alignment- How do we as a team contribute to other goals
More information on the Goal tree can be found here.
Why shouldn't there be a direct link between individual performance management and OKRs?
Individual performance goals should be kept apart from OKRs, because linking these two would defy the whole logic of OKRs.
Here are a couple more reasons that argue for disconnecting individual goals from OKRs.
- OKRs address business goals
OKRs focus on company goals. They are meant to align the goals of an organization with the strategy and vision of the company, while individual performance management is focused on evaluating the performance of individual employees. **
- A direct link can move employees away from, instead of closer to the big picture
Imagine a fairly new employee that is just a month away from their final performance review which potentially has a critical impact on their probation period. Or maybe there’s this employee who has been working for your organization for quite some time, anxiously awaiting their promotion: Can you really expect your employee to NOT prioritize their individual goals? Linking individual goals to company OKRs can take away an employee’s focus on the long-term vision of the organization.
- A direct link can stifle innovation
Doing MORE of one thing means doing LESS of something else. If employees get the feeling that they have to focus on meeting their OKRs only, they de-prioritize developing their skills. This can have negative long-term implications: NOT being given the room to grow as a person can lead to decreased well-being and deteriorating performance. In contrast allowing your employees to experience freedom - be creative and play around with ideas - can help them come up with solutions that may otherwise have remained hidden.
- A direct link can create a mental load
Furthermore, overemphasizing performance can increase stress and anxiety and stifle creativity. One of the reasons employees can keep themselves from setting stretch OKRs is that they fear not being able to achieve them and rather play it safe. Linking OKRs to individual performance management can create an unhealthy focus on results (performance) instead of progress.
- A direct link can create a lack of fairness in evaluations
Since OKRs are set on a team or organizational level, they usually depend on factors such as market conditions, the actions of competitors, and other external factors that are beyond an individual employee's control. Linking individual performance to OKRs may lead to employees perceiving their individual performance review to be unfair.
The difference between performance & progress
In Leapsome we separate between ‘business goals’ and ‘personal development goals’. Even though personal development goals can have to do with performance, they are usually more about progress, while business goals generally focus on results.
How to drive engagement from teams who feel they are too busy to log metrics
In order to increase engagement with your employees you first need to understand what it is that actually engages them.
Let’s take a brief detour to 3 psychological principles of motivation.
In his book ‘Drive’ Daniel Pink outlines three key principles that motivate individuals to pursue their goals and reach their highest potential. These principles include autonomy, mastery, and purpose. We highly recommend reading this book to everyone who’d like to understand the underlying mechanisms that drive human behavior in the workplace.
Let’s dive in
Autonomy is the psychological need to have control and freedom over the conditions of one's life. This principle emphasizes the importance of giving individuals the freedom to choose their own approach to reach their objectives.
Mastery is the motivation to reach a higher level of skills and expertise. It is the desire to achieve excellence and continuously improve performance.
Purpose is the inner drive to do something meaningful and make a positive contribution to the world.
How can we connect these principles to the logic of OKRs?
Why OKRs foster engagement and intrinsic motivation in employees.
OKRs create an environment of collaboration and trust, allowing teams to take ownership of their work. Your employees will feel empowered knowing that they have the freedom to choose the circumstances of achieving their goals.
The iterative nature of OKRs give teams the opportunity to learn and grow, enabling them to identify potential areas of improvement and areas where they can make an impact. This will ultimately lead your employees to take their skills and knowledge to the next level. Because OKRs focus on outcomes rather than outputs, teams can find the most effective and efficient ways on their own, giving them the possibility to pursue excellence.
OKRs help establish a shared goal that everyone is working towards. This creates a sense of purpose and makes employees more invested in their work. The purpose is also about INCLUSION. Try to include your employees as early as you possibly can. One way is to send out a survey preceding the OKR drafting. One simple yet brilliant question to include is this:
The ease of updating OKRs on the platform
How to manage goal updates using the meetings module:
How to work with OKR cycles: Here is our article on how to work with OKR cycles.
Stay tuned for a full-on OKR Training that deep-dives into the methodology and its underlying principles (such as engagement)!