Posted on
March 10, 2023

Exploring goal setting and OKRs through the lens of decision making

[As a Manager], you’re no longer paid for the amount of work you do; you’re paid for the quality of decisions you make.” - John Doerr, Measure What Matters

Over the past 5 years, while working on OKR capabilities for Jira Align, I’ve interviewed and engaged with dozens of organizations implementing OKRs at the ‘whole org’ level - and more broadly, navigating the transition from an output-driven to outcome-driven.

I shared my general takeaways from a recent podcast interview I did with Roger Longden on Giant Talk.

Observing organizations implementing OKRs, we were careful to keep our focus on this broader, and often a more cultural transition, towards ‘outcomes over outputs’ (captured and articulated by Josh Seiden here) - in which every path seemed to lead to ‘how do we make better decisions and align teams to do the same?’.

In a bit of a different framing, we can make the argument that OKRs are effectively a decision making framework that helps guide strategic decisions…

  • What are we not focusing on?
  • Should we measure success this way or that way?
  • Is there evidence this is moving the needle?
  • Should we cancel something and double down on something else?
  • How are we going to allocate resources?

And if they aren’t helping guide these decisions, then are they much more than another vehicle for status updates on outputs and activities?

In short, the conversations we had with portfolio managers, product leaders, transformation teams (CoE), and program & operations, culminated in this philosophical question about how organizations make decisions - or decide how to decide.

It seems more often than not, we don’t recognize decision making as an explicit strategic activity - it just happens in between goals, plans, and work. And even if we do, why is it so difficult to describe how we make decisions, and how we measure the effectiveness of our decision making?

Are goals helping teams make hard decisions?

“Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.” - Richard P. Rumelt, Good Strategy Bad Strategy

We might say the role of goal setting is to imagine/articulate some desired future and how we would measure success - then provide a framework for alignment without prescribing a solution.

John Doerr, in Measure What Matters, defines the ‘superpowers’ of OKRs as ‘focus, align, track, and stretch’. Focus, track, and stretch feel relatively straightforward, but how do we define ‘alignment’? If we say 100% alignment means all tradeoff decisions across teams are made perfectly in line with strategic intent (avoiding outcome bias) then obviously that’s impossible.

This would mean that any person in the organization put in the same situation with the same information would make the same judgment. That’s, of course, an outrageous expectation. We like to think there’s a ‘right’ answer and no equally plausible alternate realities - it’s less ambiguous.

Is this unpredictability a feature or a bug? Daniel Kahneman and Oliver Siboney would define this phenomenon as ‘Noise’.

“Some judgments are biased; they are systematically off target. Other judgments are noisy, as people who are expected to agree end up at very different points around the target. Many organizations, unfortunately, are afflicted by both bias and noise.” ― Daniel Kahneman & Olivier Sibony, Noise

In this newsletter, we’ve covered bias quite a bit (and we can see the self-reinforcing, entrenching nature as it clusters) but noise is different - and it’s not impossible to reduce this variability in judgment.

Would we define that as… alignment? 👀

In fact, many of the tools and techniques we cover can augment goal setting to drive this alignment. Principles, ‘Even Over’ statements, and Belief Challenging help us uncover (or at least make explicit), the real enemy of strategic alignment, competing, implicit beliefs, and assumptions that go unchecked - the silent, subconscious drivers of decision making.

We do have to keep in mind that this variability every individual brings to the table is, in general, a feature, not a bug. But as with most complex systems, we’re operating in this balancing act of organized chaos. To paraphrase M. Mitchell Waldrop - this is a delicate layer between the outer edge of spontaneity and the status quo.

“All these complex systems have somehow acquired the ability to bring order and chaos into a special kind of balance. This balance point—often called the edge of chaos—is were the components of a system never quite lock into place, and yet never quite dissolve into turbulence, either.” - M. Mitchell Waldrop, Complexity: The Emerging Science at the Edge of Order and Chaos

This is a bidirectional relationship where too much constriction doesn’t leave any oxygen for spontaneity; held too loosely and there’s anarchy.

‘Alignment’ conversations can often be too binary - autonomous or hierarchical. From the lens of decision making, this either means decision making is centralized or decentralized - and both have their strengths and weaknesses.

This seems to deserve a more nuanced approach to both ’noise’ reduction and the ability to break the existing models driving decision making.

A few related topics we might cover in the future:

  • In her book ‘Quit’, Annie Duke warns against a pitfall of goal-setting that isn’t considered enough - the risk of ‘escalation of commitment
  • Continuing to explore the role of conviction, intuition, and overconfidence in decision making
  • More on connecting strategy to execution through the lens of decision making!