Welcome to the third part of this series titled “5 Ways OKRs Will Fuck Up Your Organization and Why That’s Wonderful.” In the first part, we looked at how OKRs will expose your lack of strategy. In the second part, we explored how OKRs will expose your inability to describe outcomes. This is the third part, and we will examine how OKRs will expose challenges working across functions and departments. Let’s dive into it!
Structural Tension
Before we look at anything else it’s important to emphasize a key point again: before you start working with OKRs you want to make sure you have a solid strategy first. Don’t spend time on anything else before you have this covered.
Once you have clarified your strategic direction, you can use it to set different kinds of OKRs for specific types of teams. Cansel Sörgens distinguishes between the following:
- Function OKR
- Product OKR
- Shared OKR
- Strategic Theme OKR
Each type sets a different focal point. All of themrequire some degree of collaboration across organizational functions – except for the Function OKRs. Since functional separation is the way most organizations are structured, I don’t think it’s a coincidence that Function OKRs seem to be the type chosen most often. The way OKRs are set follows the way the organization is currently structured. It doesn’t follow the question of “How would we need to structure our collaboration to be most effective at working on our OKRs and achieve critical outcomes for our company?”
When Separation Gets in the Way
This separation into silos almost inevitably leads to the problem I outlined in the second part of this series: the inability to describe desired outcomes. So what’s the connection between the two?
Focus on the whole becomes harder to maintain the further we divide our work into smaller packages and the people working on them into increasingly specialized functions. Eventually, the people involved will lose sight of the initial goal. They will define their own success as delivering only a part of a solution. The focus moves to monitoring the progress of activities and outputs within the functional unit. In the end, no one knows whether what they're delivering actually has any real effect.
A strong separation into functional silos is not necessarily bad in itself, as division of labor is useful to a certain degree. When working with OKRs, however, this division is going to pose real challenges. Tangible outcomes, especially customer and market-facing ones, can rarely be achieved within a single function.
When OKRs are set to target actual outcomes, the teams working on the OKRs experience a lot of dependencies to other teams. All of a sudden, organizations are confronted with the challenge of coordinating work across functions, which they simply might not be ready for.
OKRs will create tension that forces you to choose between two problems:
1. Keep work and workers separated into functions and lose the focus on customer- and market-centered outcomes.
2. Focus on outcomes but face the challenge of managing work across functions, which goes counter to the way your organization is structured.
Finding a Solution
If you haven’t encountered any of the issues I’m describing here, simply be thankful and don’t change anything. But if all of this sounds familiar, I am going to offer four things you can try to improve the situation.
1. Use OKRs on an abstraction level above individual functions and don’t cascade further down (for now).
OKRs can help you manage the work across these functions. Representatives from each affected function can use OKR Inspection meetings to coordinate their work. The challenge: you will have to address the way work gets prioritized within those functions. There is a potential for OKR-related work to get stuck since the silos usually prioritize their own work regardless of the needs of other parts of the organization. One solution could be to always give OKR tasks the highest priority within each function (which makes sense since these are the things you want to focus on).
2. Form a virtual cross-functional team as a pilot.
You set OKRs above the functions but have a team with representatives from each one work on the topics together. Disband the team once it is no longer needed. The challenge: people will need work capacity to actually do this. They can't be fire-fighting within their silos all the time, otherwise you won't make progress on your OKRs. Insights from this pilot team could help you decide whether permanent cross-functional teams make sense in your organization.
3. Change organizational structures permanently.
OKRs can help you identify what functions are needed to achieve certain outcomes. If it makes sense, you can break up silos and form stable cross-functional teams. The challenge: this is a huge change and not to be taken lightly. You need to make sure this is not a nice idea but your business will benefit from this in the long-term.
4. Keep things the same and stop using OKRs.
I'm serious about this. OKRs might not be what you need. Maybe you need better project or portfolio management to coordinate the individual functions. The challenge: The benefits of OKRs won't materialize. Make sure this is in the interest of the company and you're not just giving up because change is difficult.
The Challenges of Cross-Functionality
The path to success with OKRs involves not just setting goals but also rethinking how work is organized and executed. No matter what you choose to do, keep your focus on the actual organizational problem that you’re trying to solve. Then investigate how cross-functionality can help you.
Whether you choose to redefine structures, experiment with cross-functional teams, or reassess the suitability of OKRs altogether, the key is to remain flexible and committed to progress. The tension you are experiencing as a result of working with OKRs is an opportunity for growth and transformation. Embrace it, even when it’s difficult.
