Dispelling OKR Myths: OKRs are a Top-Down Management Philosophy

It is said that OKRs (Objectives and Key Results) is a simple methodology with a simple language. There are no hard and fast rules, and there is no GAAP (Generally Accepted Accounting Principles). So, much of what has been written of OKRs, taught by consultants, and espoused by OKR Software providers, is open to interpretation. As a result, we have misinterpretations, misunderstandings, and outright “Myths” about the process.

This series of blogs will debunk many of the most prevalent misconceptions.

OKR Myth #9: OKRs are a top-down management philosophy

As we learned in John Doerr’s New York Times bestseller, “Measure What Matters,” OKRs were not created, but rather evolved. Andy Grove of Intel, the Godfather of OKRs, developed a methodology that he referred to as “iMBOs,” or Intel Management by Objectives. Their predecessor was Peter Drucker’s MBOs. Many of Drucker’s philosophies are consistent with today’s OKRs; however, companies implementing MBOs tended to stray from Drucker’s initial intent.

One area where companies’ MBO execution deviated from philosophy was in the cascading of goals. MBOs were very heavily aligned from level to level in a top-down cascading process. Unlike its predecessor, OKRs are bi-directional, top-down and bottom-up. Individual contributors are encouraged to set a portion of their OKRs, provided they are always in support of the company’s top priorities.

Other areas where OKRs depart from an MBO execution are:

  • MBOs migrated to annual KPIs
  • MBOs were not tracked and monitored on a continuous basis
  • MBOs were very closely tied to compensation

Do you manage a company or teams (either as a CEO, a senior executive, a middle manager or even a front-line manager)? Do you set and track objectives? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!

Image Credit: Stockvault

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