OUR MENTAL MODEL

When I start building an OKR in companies, it is natural for people to start discussions with the initiatives they intend to deliver. Few of them find it easy to link these initiatives to strategic results and the minority can clearly answer the reasons for seeking these results in the first place.

Simon Sinek explains in his theory of the Golden Circle that our mental model actually communicates from the outside to the inside, that is, we know how to explain what we do, but we have difficulty saying why we are doing what we do.

Simon also mentions that companies should communicate in reverse, that is, from the inside out. Represented by the image above, his theory consists of:

1. Why: Very few companies can explain why they do what they do, their beliefs and why they exist.
2. How: Some companies know how to explain how they do what they do;
3. What: 100% of companies know how to communicate what they do;

By suggesting that companies start communicating with why, Simon reinforces that, biologically, we are working with the part of the human brain that determines our behaviors, achieving what many organizations and leaders want most: to inspire people, whether employees or customers.

WILL IT BE THE SAME?
During OKR building discussions, I usually use a simple example from our daily lives:

IS WEIGHT LOSS A GOAL OR A KEY RESULT (KR)?
Most of the time, the answer I get is “objective”. When I question why people want to lose weight and what makes them go to the gym every day, go on a diet or try to lose a few “kicks”, points arise, such as:

• Have optimal physical health
• Improve self-esteem
• Have a toned body

And in other cases, creatively and sincerely:

• Getting to tie your shoes
• Find a boyfriend
• feel more comfortable on the beach

Note that when we do the exercise of finding a goal (why), we completely change the way we communicate, working the part of the brain that stimulates behaviors. When this objective is not so clear, we tend to abandon all this for the simple reason that the brain wonders the real reasons for so much effort and little result - at least in the short term.

BUILDING OKRs WITH THE GOLDEN CIRCLE VISION
To work with the part of the brain that drives our behaviors, beliefs, and values, Simon recommends indoctrinating our mental model as follows:

• Having clarity of why.
• Have discipline of how (How).
• Have consistency of what we will do (what).

In this way, we will connect the whys with our initiatives, which are means to achieve that goal. It is not by chance that we started building OKRs by the objective, followed by KRs (defining the metrics that prove we are on the right track) and only at the end we think about the initiatives we will take to get there.

Returning to the discussion of losing weight, see how the challenge of losing weight would look like in two different goals:

EXAMPLE 1:

Objective: To be able to tie my shoes

• KR 1: Lose weight from 85 kg to 80 kg
• KR 2: Decrease my fat percentage from 27% to 22%
• KR 3: Reduce the size of my waist from 110 cm to 100 cm

EXAMPLE 2:

Goal: Improve my running performance

• KR 1: Decrease my average pace from 5 to 4.20 min/km
• KR 2: Lose weight from 73 to 70 kg
• KR 3: Increase my VO2 max from 50 to 65 mL/kg/min

In both OKRs, we have the KR of losing weight, but when we change the objective, the context also changes. If the whys change – amazingly – the value of KRs will also change.

Now, let's imagine in a corporate environment. When we set goals for people in companies and communicate what we have to achieve as a result (goal) without explaining why, the tendency is that no one will feel inspired to do that, other than the salary at the end of the month (extrinsic motivation ). But if we first explain the reason and then draw together the value metrics, we will have people who will connect better with the purpose of doing that, tending to achieve much more sustainable and genuine results (intrinsic motivation).

OK, BUT WHAT ABOUT THE INITIATIVES?
With the objective created and the KRs defined, we can think of initiatives for both examples. In the 1st case, possibilities would be to reduce sugar consumption or start physical exercises. In example 2, increasing the frequency of training or hiring a personal trainer can be great options.

Keep in mind that initiatives are possibilities that may or may not help us reach our key and objective results. If an initiative is not having the expected effect, we have to find other alternatives. If just cutting out sugar isn't helping me to have better health, I'm going to cut out beer too and start playing sports.

It is natural that our mental model starts with solutions (initiatives). When that happens, provoke a reflection on why we want to implement these solutions and, most likely, you will reach the goal faster.

In short, communicate your why first, define your KRs and build your initiatives so that you reach your goals with more motivation, whether in your personal or professional life.

If we start with the wrong questions, if we don't understand the cause, then even the right answers will lead us in the wrong direction sooner or later. Simon Sinek.

Author: Luiz Corandin

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From the series
Once upon a time, the effects of OKR

How OKR helped SKF Latin America to strengthen its agile culture

“With OKR, it has become much easier to promote transparency in SKF Latin America's management. The objectives are in the system for everyone's alignment. Knowing the direction makes the path easier and faster.”

Gustavo Larrubia, OKR Master Global and CHRO Latam

CASE PRESENTATION
The object of study is the implementation of OKR at SKF Latin America (LAM), in the second half of 2020.

SKF grew across Latin America in 2020. There was consensus across the organization's business management that growth was due to strong team alignment (not silos), strengthened with the adoption of the OKR.

Implementation began in June 2020, in seven countries simultaneously - Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay -, involving a staff of 850 people.

Three points defined the construction of the OKR at SKF, in this order: concept, alignment and strategy, to ensure preparation and total team unity – quarterly goals focusing on the year's strategic objectives. At the end of this cycle, defined as a pilot, the organization's vision was unanimous: gains in employee empowerment and engagement, making work much more fluid.

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How SKF arrived at the three-letter solution (OKR) for management in Latin America

It all started with a nuisance. The director of Human Capital Management in Brazil and LAM, Gustavo Larrubia, was dissatisfied with the slow pace of performance management, which was at odds with SKF's agile way of acting. He went after answers. In Silicon Valley, he heard in unison: OKR. In Brazil, the book 'Evaluate what matters' (John Doerr) was a real guide and, with the support of OKR Matrix - a company with authority in the implementation of OKRs - they were ready to start building a new history at SKF.

The scenario found for implementing OKR

Since 2015, when Claudinei Reche assumed the presidency of SKF LAM, the organization was already working with five major priorities in the year, in an attempt to organize the tangle of things arising from a company that grew with silos. However, management results needed to be improved. Teams were working operationally to sustain the present moment, and the established vision of the future did not reach all levels of the organization.

It was necessary to share the organization's aspirations in a clear and transparent way, so that each employee could understand the meaning and impact of their role in achieving strategic results.

OKR made this whole challenge easily noticeable and everything changed. And it has changed because the OKR solution defines what will happen at each stage, giving confidence and security in the conduct of the entire process and this empowers people.

The OKR model helped SKF LAM to have more focus and alignment.

Challenges x Strategy
One of the great secrets of OKR is in the alignment with the culture and values ​​of our organization when setting goals and results.

OKR is a culture.

At SKF LAM, the challenges were defined on two fronts.

Build OKRs as life should be. Look at the organization's strategic initiatives and see how this can play out in practice.

And then train, train, and train until people stop thinking about the task, and think about the key results and the goals to achieve them. People feel very overwhelmed because they do a lot of tasks that don't reflect the organization's goals. When OKR aligns strategic objectives, it has the entire team looking in the same direction.

“People have a hard time creating KR goals; having structured thinking to think about the activity focused on the objective, and OKR helped to structure that”, pondered Gustavo.

Adopting a friendly platform was an important item to contribute to people's credibility and adherence. However, the decisive success factor was the implementation strategy.

Respecting the culture and building together opened a channel of trust and belonging, which favored the safe use of the method.

“It is a very mature organizational change, which allows people to truly take ownership of their actions and feel proud of their deliveries. It is the 'sense of ownership' in practice”, acknowledged Claudinei, CEO Brazil and LAM. (mark/suggestion).

Around 850 SKF LAM staff have been extensively trained on the OKR solution. The 'OKR Masters' were adopted, employees trained to be the focal point (80 employees from different areas and countries).

Having implemented OKR in the pandemic scenario and the adoption of remote work helped, and a lot, the training of users in different countries.

The training involved theory and a lot of OKR practice, which was very strategic. “It was necessary to deliver the OKR solution into the hands of users and let them “play” with the powers of OKR. To feel, in practice, how each one could contribute”, revealed Gustavo.

Strategy execution
OKR is the link between strategy and people; between outcome and engagement.

The OKRs are built on the framework of focus areas that provide the strategic direction for the SKF Group for the period 2020-2025.

Are they:

. New Business Models (includes Cleantech)

. Digital Sales

. Innovation

. Work of the Future

. World Class Manufacturing

Five aspirational goals (Aspirational OKRs) and two operational (Operational OKRs) were created to support the aspirational ones.

. Aspirational goals: look to the future in order to make the business sustainable; teams that build the product (Product OKR) participate.

. Operational objectives: day-to-day focus, – sales volume, margin, among other financial indicators; teams whose main focus is growth (Growth OKR) participate.

. Profitable market share

. cash flow management

The OKR management model in short cycles, based on results, offered a greater degree of decentralized decision.