10 Motivation - How to Use OKR to Energize Your Team #
In the previous lesson, I mainly introduced the difference between OKR and KPI. When applying OKR, we need to implement the principles and strategies advocated by OKR, avoiding turning it into a KPI-style management model. This is crucial for adapting to the VUCA operating environment and bringing vitality to the team.
However, when it comes to vitality, we cannot ignore motivation in organizational management, because motivation is expected to activate the organization, the team, and individuals. As a comprehensive goal management method, OKR management involves goal setting, process management, and performance output throughout the entire process. So how can OKR truly activate the team and motivate individuals? In the process of implementation, how should organizations upgrade their motivation mechanisms to align with the transformation of OKR?
In this lesson, I will help you solve these questions. First, we need to understand the significance of motivation based on OKR. How does motivation work in organizations?
Purpose of Motivation based on OKR #
To help you understand this part, let me use an example from a game. The reason why games can immerse people and make them unable to break away is mainly due to a well-designed motivation system. For example, during special holidays like New Year’s Eve, game operators would hold events where players can obtain rare equipment, pets, or permanent clothing through bullet screen messages. At that point, you will find that as soon as the clock strikes 12 on New Year’s Eve, the game screen will be filled with various bullet screen messages.
This indicates that motivation can guide collective behavior. The reason why game players all send bullet screen messages is because the game provides special incentives. In fact, we can also find similar examples in our work and daily life. Pinduoduo, for example, relies on the incentive of bargaining to encourage people to share in WeChat groups, thereby achieving viral growth. It carved out its own path from the dominant markets of Alibaba and JD.
Now let’s go back to organizations. The motivation we want to create should be based on achieving better performance results. In other words, the motivation in organizations is to guide all employees to be more willing to engage in behaviors that contribute to organizational performance. And since OKR manages organizational goals and performance results, the motivation in organizations must be based on OKR. However, I often see some teams and organizations that, even after introducing OKR, still assess and motivate based on KPIs. If this continues, the collective behavior guided in the organization will still revolve around KPIs, which, as I mentioned in the previous article, will bring many management problems to the organization.
Therefore, the motivation mechanisms in organizations need to be upgraded to be based on OKR. Only when the motivation design is related to OKR, and when individuals in the organization recognize and use OKR, can better performance results be achieved through OKR. As managers and HR personnel responsible for performance management in the organization, it is your responsibility to guide the entire organization in terms of performance and evaluation based on OKR.
For example, at the end of each quarter, JD.com’s HR department initiates a performance evaluation for the entire first-level department. This evaluation includes performance assessment for the quarter as well as goal setting for the next quarter. The evaluation is related to the employee’s performance score, and employees with higher performance scores will receive higher performance bonuses. In this scenario, if OKR is introduced in the organization, HR must state that the entire performance evaluation must be based on OKR, and managers need to assign performance scores to subordinates based on their actual performance output and the scores obtained through OKR closed-loop management. This kind of motivation mechanism can use OKR to guide the organization to achieve higher performance.
After understanding that we need to base organizational motivation on OKR and use OKR to guide behaviors that contribute to better performance, let’s look at how OKR can motivate individuals in the organization.
Aligning Personal Goals with Organizational Goals through OKR
When setting OKRs, individual OKRs are mainly derived from three aspects:
- Aligning with superiors
- Self-driven responsibilities
- External support
For OKRs that align with superiors, the direction of Objective (O) should remain consistent, but the Key Results (KR) can be generated from the bottom up. In other words, individuals can determine the specific path to achieving the Objective, reaching a consensus with superiors. This gives individuals more autonomy in generating the Key Results and motivates them to achieve the desired performance outcome.
In self-driven responsibilities OKRs, both the Objective (O) and Key Results (KR) are fully determined by individuals as long as they contribute to the organization’s development. This gives individuals even more motivation to achieve their custom goals and strive for performance results.
Conversely, if most of the assigned work in an organization is not what an individual wants to do, it will lead to a misalignment of personal and organizational goals. For example, if you ask a project manager to do the work of a product manager, not only may the project manager not be competent, but it will also create a conflict between what the project manager wants to do and what the organization assigns to them. This not only lacks motivation, but also may lead to talent loss.
Another example is Alibaba’s partner mechanism, which allows partners to have decision-making power in strategic matters instead of relying solely on the founder’s decisions. In this way, partners’ ideas are integrated into the formulation of organizational strategic directions, which motivates them to contribute to the organization. This is the most famous case in China that motivates outstanding individuals to contribute to the organization in the long term, ultimately merging individual and organizational goals.
Now, let’s talk about how we implement this at JD.com. At the beginning of each quarter, I lead the team in formulating OKRs, including both the Objective (O) and Key Results (KR), which are initially generated by the team itself. Then, I summarize and discuss with the team to reach a consensus, taking into account the opinions of all team members. Additionally, I encourage individuals to set completely self-driven OKRs. For example, if someone sets three OKRs, I would encourage them to include an Objective that is completely self-determined within those three.
In an organization, aligning personal goals with organizational goals through OKRs is the greatest motivation for individual work.
Inspiring intrinsic motivation through OKRs #
If you ask people around you why they work, you will get various answers. Some work for money, some for honor, some for status, and some even just to pass the time. Therefore, the reasons for work are complex, and in order to meet these needs, we often see external incentives such as money and certificates to motivate employees to work.
However, relying solely on external incentives will gradually overlook another factor of why people work: intrinsic motivation. We have to admit that external incentives are limited. For example, equity and honor cannot be obtained by everyone. Therefore, we can’t rely solely on external incentives. We must focus on internal incentives, allowing more people to be willing to contribute to work from within. This will be more beneficial for the organization to achieve performance.
OKRs fill the gap in intrinsic motivation that is often lacking in organizations. Why? The process of setting OKRs revolves around organizational goals, emphasizing autonomy, and encourages individuals to set self-driven methods or directions based on OKRs. The management process based on OKRs continuously follows up on the progress and problems of goal achievement, allowing timely feedback and resolution of issues affecting goal achievement. Clearly defined goals, greater autonomy in work, opportunities for personal growth, and a sense of progress in pushing things forward can all greatly stimulate individuals’ enthusiasm for work. As a result, they are better able to achieve work goals and achieve higher performance outcomes.
Of course, intrinsic motivations such as curiosity, social interaction, and stability may also be internal needs for people to work, but not all of these internal needs are strongly correlated with organizational performance. For example, some people work to expand their social networks and make more friends, which is their primary motivation for work. However, this does not have a significant impact on organizational performance. Therefore, the application of intrinsic motivation must revolve around the establishment of organizational goals and work processes, specifically in the formulation and implementation of OKRs. This will unleash true intrinsic motivation that genuinely drives individuals to work and achieve optimal performance outcomes, making it an effective internal incentive.
At JD.com, we have practiced internal incentives based on the OKR work approach in the following ways:
- After setting OKRs, the team will conduct “OKR decoding” to initiate overall interpretation and consensus building on OKRs, so that everyone can have a clear understanding of all the team’s work goals. (Clear goals)
- All the team’s OKRs will be shared in the internal OKR system, and it is also recommended to print out the OKRs and display them transparently on a physical board around the team’s workspace. (Clear goals)
- On the physical board, using vertical swimlanes for “to do | doing | done”, the progress of the work tasks derived from OKRs will be transparent and updated in a timely manner. (Managing the implementation of OKRs and bringing a sense of progress)
- The team will autonomously establish daily stand-up meetings based on OKRs, without interfering with the specific content of the meetings, but focusing on addressing problems and obstacles in the process of achieving the goals. (More autonomy and fostering a sense of progress through problem-solving)
- When evaluating performance, the individual’s methodological accumulation and influence in OKRs are comprehensively considered, and this is even included in the presentation PPT template for promotion at high positions in JD. (Personal growth)
In this way, the intrinsic motivation brought by the OKR working method not only reduces the cost of motivation, but also makes individuals more willing to contribute to the work from the bottom of their hearts, achieving better work performance.
Establishing a good working relationship between superiors and subordinates through OKRs #
Jack Ma once said that people leave their jobs for two important reasons: either they are paid too little or they are unhappy. Therefore, besides salary incentives, it is particularly important to establish a harmonious working relationship between superiors and subordinates in the workplace.
I often hear friends working in certain frontline Internet companies complain, “The boss hardly pays attention to me in normal times, but only remembers me when something comes up. Our workstations are even right next to each other, but we hardly talk.” In situations like this, the core problem is the lack of a good working method and habit between superiors and subordinates. Following such a boss for a long time inevitably leads to many complaints, and even the choice to leave.
So, how do we build a good working method? Within JD.com, from senior executives to frontline employees, it is a common practice to hold morning meetings. At a fixed time every morning, superiors will communicate and discuss the progress, problems, and risks in achieving goals with their managed teams. They will also promptly synchronize important information from the company. In addition to the morning meetings, there are also weekly meetings, monthly meetings for important projects, and so on. The purpose of holding these meetings is to provide superiors and subordinates the opportunity to officially communicate, discuss problems, exchange opinions, and maintain the flow of information in order to establish trust in the work process.
Seeing this, I believe you will immediately think of the OKR setting process and process management. When applying OKRs in teams and organizations, it is necessary to establish a mechanism for reviewing and adjusting the goal completion process in the three dimensions of daily, weekly, and quarterly. This allows control of process problems and risks and adaptation to changes in goals. Superiors and subordinates can achieve the same goals and effects as the various meetings in JD.com through the working method driven by OKRs. This establishes a good working relationship between superiors and subordinates, in which managers can fully influence others to achieve collective goals, which is what we often call leadership.
Therefore, the working method established based on OKRs enables managers to enhance their leadership ability, discover the problems faced by subordinates in a timely manner, and provide them with work advice and guidance. As employees, they can report their work progress in a timely manner and strive for resources and assistance through this type of working method.
This good working relationship established between superiors and subordinates, which is based on mutual trust, timely synchronization of information, and aims to achieve better performance results, effectively motivates subordinates to be more motivated in their work. Building a Performance-oriented Culture through OKRs
In a performance-oriented incentive system, whether it is bonuses, promotions, or honors, our sole focus in the organization is performance.
OKRs revolve entirely around the efficient formulation and achievement of goals, from how to ensure that they support strategic implementation and manage processes accordingly, to how to write Objectives (O) and Key Results (KR). Especially in selecting the Objectives, we focus on dimensions such as revenue, users, efficiency, and capability. This is because these dimensions constitute the organization’s performance. Therefore, all the concepts and practices surrounding OKRs are aimed at better performance.
In addition, when using performance-oriented incentives, fairness should also be taken into account. The results assessment mechanism based on OKRs reflects relative fairness through evaluations from multiple relevant parties, thus avoiding autocracy. Furthermore, the OKR system makes all individuals’ OKRs and evaluation results visible, ensuring transparency in performance evaluation.
However, I am particularly concerned about the incentive mindset of “no credit, no reward” that often forms within organizations. Rewarding hard work that disregards actual performance not only deviates from a performance-oriented approach but also leads to unfairness and disappoints and dissatisfies those who genuinely contribute to organizational performance. This not only hurts performance, but also organizational culture. Individuals filtered by this culture tend to excel at “slacking off” and resort to a “retirement-style” work ethic, while talented individuals will choose to leave.
For example, when evaluating performance on a quarterly basis, high ratings should not be solely based on factors such as daily overtime or punctuality. Instead, they should consider the effects of the work performed, such as how much money it helped the organization earn, how much it increased user increment, how it improved organizational efficiency, or how many talents it developed. Only by using these criteria as the basis for performance evaluation can we move away from the “egalitarian” incentive practice that only considers hard work.
Therefore, when OKRs are effectively implemented, management in the organization should refer to OKRs when making decisions regarding employee promotions, equity distribution, bonus allocation, and honor recognition. Through the public visibility of OKRs and evaluations from multiple parties, fairness is better ensured. Only by providing fair incentives based on performance can we truly satisfy individuals and give them sustained motivation in their work.
Summary #
In the industry, many people argue that OKRs should not be used for assessment, but I strongly disagree with this idea. I ask, if there is no assessment, how can we identify outstanding talents within the organization? How can we ensure fairness without assessment? OKRs are closely related to organizational performance and not only should they be used for assessment, but we should also find the correct methods for assessment and incentives based on OKRs.
In this lesson, I first explained in detail the reasons why we need to upgrade the organizational incentive mechanism based on OKRs. I often see organizations implementing a so-called “dual-track” performance management system, which uses both Key Performance Indicators (KPIs) and OKRs. KPIs are used for assessment and incentives, while OKRs are used to set challenging goals. Due to the influence of incentives on group behavior, the collective in the organization will only recognize KPIs, making OKRs ineffective and unable to deliver their full value, rendering them ineffective.
After adjusting the entire organizational performance management to be based on OKRs, OKRs help align individual goals with organizational goals, stimulate intrinsic motivation, establish sound working relationships between superiors and subordinates, and create a fair culture that is oriented towards performance. It is through the practical implementation of OKRs that everyone’s work enthusiasm and motivation can truly be aroused, effectively activating the value of the team.
Given that OKRs have so many advantages, how can we ensure that organizations use them in the long term? In the next section, I will introduce “Cultivating and Embedding the OKR Culture”, where you can learn how to persistently utilize this excellent methodology for organizational performance breakthroughs.