How do we unleash the power of OKRs? It’s not by setting goals.

More and more organisations are adopting Objectives and Key Results (OKRs) as a powerful tool for executing their strategy. Most see it as a goal-setting exercise to break their long-term strategy into shorter-term measurable goals. However, the true power will remain elusive if the idea of OKRs remains a training module as part of onboarding or a framework for articulating goals.

OKRs go beyond a mere framework; they are a habit, a routine, and a cadence that drives continuous improvement.

There is a psychological and behavioural science behind OKRs as an ongoing discipline. If we understand this, we’ll be able to unleash the true potential of OKRs, leveraging the habits that will enhance execution and drive success.

The habit of OKRs 

Research indicates that over 40% of our daily activities are habitual. The point is not to reduce the 40%; the point is to utilise it for our benefit. Habits are beneficial because they save us energy, reduce decision-making efforts, and provide a sense of familiarity and comfort. Harnessing this chunk of time will significantly impact results.

The only way to unleash the power of OKRs is by integrating them into the habitual behaviours of teams.

How? Consider your current habits. Do you have a regular weekly team meeting? Or a monthly executive meeting? And what about quarterly business reviews? OKRs should form part and parcel of all those meetings in different shapes and forms.

(See these articles for tips on running the weekly and quarterly meetings.)

The science behind habits

Let’s consider five scientific principles we can use to build habits and truly unleash the power of OKRs.

1. Dopamine effect: One way to leverage habits is by capitalising on the dopamine effect – yes, the ‘addiction’ that anyone using social media has been warned against. Dopamine, a neurotransmitter associated with motivation and reward, is released when we celebrate achievements. By creating a habit of acknowledging and celebrating progress towards OKRs, leaders can stimulate the release of dopamine, which in turn allows us to go into the next cycle with energy and positive emotions.
2. Overcoming time inconsistency: Time inconsistency refers to our tendency to discount future gains and prioritise immediate challenges. When setting OKRs, we often struggle to recognise the future benefits of achieving them. By establishing a habit of weekly meetings, focusing on the next best action and keeping each other accountable, we overcome this cognitive bias.
3. Long-term potentiation: If you’ve ever heard “nerves that fire together, wire together”, it refers to the concept of long-term potentiation. In short, repetitive activities strengthen neural connections. By having the same meeting at the same time every week, our actions towards our OKRs become automatic and almost effortless. If I must report back to my team on Wednesday morning, I’m going to tick off a few actions by Tuesday afternoon.
4. Identity-based habits: James Clear talks about identity-based habits, stating that your habitual behaviours are driven by your sense of identity. So, when individuals and teams identify themselves as champions of execution, they are more likely to work towards their goals consistently. Once we realise (through celebrations) that we’re good at execution, it becomes a self-reinforcing cycle.
5. The power of small wins: Richard Thaler emphasises that executing small tasks correctly and consistently builds a foundation for success. OKRs provide a structure for breaking down larger objectives into manageable chunks, creating numerous opportunities for small wins. Each achievement reinforces the habit loop, generating a positive feedback loop that keeps individuals and teams motivated and engaged.

“The purpose of setting goals is to win the game. The purpose of building systems (habits) is to continue playing the game.”  

– James Clear

If we can find a way to set the proper habits in place, we can keep playing for longer. And if we can stay in the game longer, the probability of our success increases.