Outperformed performance management?

For 60 years, companies have lived reasonably well with MbO, performance management and 360-degree appraisals. Many have been and continue to be quite successful. However, what many managers and executives have not yet realised is that a small revolution has taken place among employees in parallel with the evolution of performance management. While employees are fed up with being assessed, the appraisal system is constantly being "improved". The automotive industry is experiencing a similar situation: the combustion engine has been gradually optimised over 100 years. But who still wants to buy a combustion engine today?

Managers and HR should ask themselves today:

• Who can still afford to think in annual cycles today?
• Which employees still want to be assessed by managers who have no idea what they are actually doing?
• Which company wants to rely on employees who have to be developed and who don't want to develop themselves?
• Who seriously believes today that good employees can be motivated by a bonus alone?

"The faster is the better"

In product development, most companies have recognised that classic waterfall models are one thing above all: slow, expensive and inefficient. For this reason, there is hardly a company today that can do without agile project methods if it wants to stay on the ball. In the technology sector, nobody can afford to be slow any more. Swiss farmers would probably say: "De Schneller isch de Gschwinder". The companies that have taken it a little easier are simply no longer there. You can learn a lot from those that are still around. Many have missed out on the biggest lever for making a difference in an organisation: good goal setting. The great thing is that this lever is not just anywhere, it is in HR.

Most of these companies use a concept that is fascinatingly simple and surprisingly challenging to implement. It is called OKR (Objectives & Key Results). Andy Grove derived this from the classic MBO process and first introduced it at Intel. Some of the world's most successful companies have grown up with this concept: Amazon, LinkedIn, Bill and Melinda Gates Foundation, Intel and Google.

Full transparency, clear objectives and key results

Objectives and key results are virtually synonymous with agile performance management. The idea behind it: A maximum of three annual objectives are derived based on the corporate vision. At the beginning of each quarter, each Team jointly considers which objectives will best contribute to the annual goal over the next three months. This objective itself does not have to be measurable. It is much more important that it is formulated in an inspiring, motivating and action-orientated way. For each objective, the team in turn considers three to four different key results that can be used to measure the degree to which the goal has been achieved. The teams then review on a weekly basis whether they are moving in the right direction. These specific, realistic and aggressively formulated key results must be significant for the objective and must be verifiable as soon as possible. There is full transparency and everyone sees everything. This leads to focus, mutual alignment and motivation through genuine participation. This is perhaps best explained by John Doerr himself: Link .

• Can this idea be easily and quickly transferred to entire companies? No.
• Does it require a transformation? No.
• Can you start with little effort and on a small scale? Absolutely.

In the spirit of design thinking, it also makes a lot of sense to start with a small prototype with OKRs. You don't even need a tool for this. If in doubt, a pen and paper and someone in the company who is familiar with it and will put their hat on for it will suffice.

Do you need support? Click here is the link to our consulting services for agile performance management and OKR.