11 Culture - Molding and Immersion of OKR Culture #

In an organization, although there is a department responsible for cultural development, due to the mobility of personnel and continual adjustment of organizational structure in the internet context, a good culture is not only difficult to cultivate but also easily diluted and lost with changes. Therefore, we need to master the methods and practices of cultural development and use these methods to continuously drive the generation of OKR culture within the organization.

So, what is culture? What is the establishment of culture related to? How can we design and cultivate excellent OKR culture to respond to this ever-changing era? Let’s first look at the basic components of culture.

What is Culture #

When you travel, you can best experience the charm of the word “culture”. You are attracted by the language, written characters, or special symbols representing a particular country. You will see that even within the same country, there may be different lifestyle habits. When you communicate with locals, you will discover the stories they carry on and the values they believe in. We often use these things to collectively refer to culture.

Similarly, when we go to organizations, we will see vision, mission, and values carved on the walls, notice different decorative styles, atmospheres, and contexts in different organizations. We also find that employees’ behavior follows specific rituals and practices. By further communicating with them, we will learn the specific reasons behind their actions. We call all these things organizational culture.

So how is culture actually formed? “Father of Corporate Culture” Schein’s three levels of culture reveal the essence of culture.

To generate a new culture, all three levels of culture are indispensable. This means that if we want to shape OKR culture, we not only need to focus on the superficial symbols and values of OKRs but also need to address the fundamental assumptions represented by OKRs.

So, in an organization, how can we enable OKR culture to possess these three levels?

Shaping OKR Culture #

Once an organizational culture is formed, it is relatively difficult to change. However, in order to survive and adapt to the current environment, organizational culture needs to evolve continuously. The process of cultural evolution, ultimately, is the adjustment of people’s behavior habits. Therefore, in shaping OKR culture within an organization, we can influence group behavior and upgrade OKR culture through adjusting thinking, practicing management, and establishing rules.

1. Adjusting Thinking #

Why is culture related to people’s thinking? Here’s a little story about myself.

I once worked in a research institute that was part of a certain defense conglomerate. In such an environment, I would strictly follow the waterfall development methodology to manage the entire software project, controlling and even rejecting changes in requirements. This delivery model also gained recognition from clients, so my thinking about software development has always been traditional waterfall methodology, and I didn’t think there was anything wrong with it.

Waterfall Development: A software development method that spends a long time in the early stages to determine a large scope of requirements and strictly follows the sequential steps of planning, analysis, design, coding, and testing driven by documentation. It strictly controls changes in requirements and usually has a delivery cycle of half a year to one year, or even longer.

Later, when I entered the world of the internet, I realized that the waterfall development approach is simply not applicable in an environment where things change rapidly. Only iterative and agile product development that responds to changing requirements in a timely manner can enable an organization to survive better. My entire way of thinking was completely overturned.

Agile Product Development: In 2001, the Agile Manifesto was introduced, marking the beginning of the era of agile software development. This approach emphasizes short iterative cycles to meet user requirements, developing and validating simultaneously. A typical iteration development cycle is 2-3 weeks, or even shorter, with a small version released for validation in one week.

Therefore, the kind of culture that exists will shape the way people think. Culture is the way people think within an organization, and people’s behavior is undoubtedly deeply influenced by their way of thinking. Just like how I developed different thinking regarding product delivery in different organizational environments, and accordingly, naturally performed various specific daily tasks in accordance with the corresponding delivery models. So, in order to shape the OKR culture, we first need to clarify the core thinking and concepts represented by OKR (as follows), and then continuously instill this OKR thinking in individuals within the organization.

• Regarding the Environment: Embrace change and continuously iterate and experiment.
• Regarding People: Everyone can be activated and contribute in order to seize more opportunities.
• Regarding Business: Strategy is not just about formulation, but more importantly, about execution and achieving growth results.
• Regarding the Organization: The ability to manage, lead, motivate, and build culture during the process of achieving organizational goals affects performance outcomes.

By adjusting people’s thinking to upgrade the culture, the OKR culture incorporates the basic assumptions of the Shain culture, emphasizing embracing uncertainty, people-oriented approach, growth orientation, and process focus, in order for the organization to succeed.

Within the organization, we can use continuous training, sharing, lectures, and thinking competitions to spread the OKR mindset.

(On the left is a photo of me during an OKR training session, and on the right is the trophy for the OKR thinking competition)

For example, in order to better understand what OKR is, when introducing OKR within the department, I would conduct training sessions for the managers and leaders in the team every Tuesday, aiming to preach the philosophy of OKR and its core values. I have also collaborated with HR to organize “OKR Thinking” competitions, allowing everyone to learn about the philosophy of OKR through competitions, thus repeatedly instilling the OKR mindset within the group.

Only when the thinking of individuals within the organization can be based on the basic assumptions represented by OKR for long-term thinking and decision-making, can the core of the OKR culture be shaped.

2. Practice Management #

When we travel to different regions and see the lifestyles of different people, we often say that it is due to the local culture. Culture is a way of life in everyday life, and in organizations it represents a way of management. And management is a practice, and the kind of management practice has corresponding behavior in management and being managed, thus creating a corresponding culture.

To create an OKR culture, it is necessary to find specific management practices derived from the basic assumptions of OKR, and the outward manifestation of culture is reflected through management practices.

For example, the “agile” values that different organizations write on their walls are the same in terms of the artificial layer of culture. However, after detailed communication with people in different organizations, it can be found that in some organizations, agile represents agile product development, while in others it represents the need for fast communication and response to customers. Correspondingly, different management practices are used to support these two different value propositions. The management practice representing agile development may be iteration, while the management practice representing fast communication and response to customers may be a requirement to respond to customer inquiries within half an hour.

Therefore, the outward manifestation of the OKR culture’s values can be done from the perspective of the four core management practices.

• Objectives: Short-term small goals, employee participation in OKR formulation, including growth quantifiable indicators.
• Tasks: Prioritization, weekly meetings to monitor OKR changes, transparent physical kanban board for tasks.
• People: OKRs can be updated at any time, encourage the establishment of self-driven goals.
• Results: Performance assessment based on actual growth, OKR results shared openly, mutual evaluation.

(Note: For an outsider, it is necessary to communicate with people within the organization who adopt these management practices in order to understand why they are doing things in this way. This is the difference between the outward manifestation of cultural values and artificial symbols of culture. Cultural symbols do not require any understanding, what is seen, heard, and felt all belong to the artificial symbols layer.) The specific OKR practices that focus on these four dimensions of management all adhere to the principles represented by OKR, including embracing uncertainty, putting people first, being growth-oriented, and valuing the process. This represents the concretization of the OKR concept in the dimensions of management practice. For example, setting small goals is conducive to embracing uncertainty, while employee participation in goal-setting and empowerment during the process (updating OKRs at any time) reflects a people-oriented approach. The definition and evaluation of growth-oriented quantitative indicators, and the use of physical kanban boards, represent transparency and management of the process.

(Internal JD.com system for creating OKRs, employees can update their OKRs at any time)

In our organization, managers need to be able to implement these OKR management practices, and they can also develop their own unique management practices. However, regardless of the approach, it must reflect the value principles represented by OKR’s basic assumptions. Otherwise, if OKR is implemented but the original management approach is retained, the OKR culture cannot be established. The most serious problem is the application of OKR while still using KPI-style management (you can review Lesson 09 for more details).

3. Establishing Rules #

Why is culture related to rules? Let’s take traffic rules in different countries as an example.

In our country, rules such as “stop at red lights, go at green lights,” “cross the road using pedestrian crosswalks,” and “keep right while driving” are traffic rules we learn from a young age. It is because we have long adhered to these rules in our behavior that the efficiency of traffic operations is ensured.

On the other hand, in foreign countries, such as some European countries, driving is done on the left side of the road according to the traffic rules. If we were to continue driving on the right side as we do in our country, it would cause a lot of traffic conflicts and accidents due to the clash of different traffic rule cultures.

Similarly, in an organization, the rules established will generate certain behaviors and, in turn, create a specific culture. Or, we can say that the establishment of culture is deeply influenced by rules, which we often refer to as rules or operating mechanisms.

So, if we want to shape an OKR culture, we need to establish rules for OKR execution and implementation, creating two core mechanisms.

• Process Mechanism: Develop an organizational goal management process based on OKR.
• Incentive Mechanism: Design incentives within the organization based on OKR.

Only when all the workflows in the organization and the incentives that guide group behavior are based on OKR and are strictly implemented, can an OKR culture be established.

With the upgrade of process and incentive mechanisms based on OKR, the OKR culture acquires the artificial embellishment layer of Schein’s culture. These artificial embellishments can be seen when you enter a group - you will see the OKR processes and incentive systems on paper, observe various behaviors related to OKR setting, reviewing, and closing the loop, and hear language that includes OKR, as shown in the figure below.

(When the team runs according to the OKR process, it brings about various behaviors and language related to setting and discussing OKRs. These surface-level observations and hearing of OKR-related activities represent the artificial embellishment layer of the OKR culture)

At the same time, the process and incentive mechanisms interplay with management practices, for example, in the goal-setting stage of the OKR process, we adopt management practices such as setting small goals and prioritization. In the OKR review and adjustment stage, we incorporate daily stand-up meetings and physical kanban board management practices. Incentives based on OKR include recognition, scoring, and merging goals together. This ensures that the OKR culture’s surface-level embellishments are matched by the underlying OKR values, and both mutually support each other.

However, I often see that many organizations implementing OKR only focus on implementing it at the team level, while managers and senior leaders never use it. They ignore the rules, challenge them, and do not comply with them. Consequently, it is easy to imagine the lack of rule enforcement within the team. This is one of the important reasons why OKR fails to take root in many domestic organizations.

Therefore, once the rules involving OKR processes and incentives are established, they must be strictly enforced, and even executives in the organization cannot be exempted. We can see that ByteDance and Baidu, when promoting OKR, had the founders Zhang Yiming and Robin Li start by implementing the OKR setting process. This ensures that the process mechanism is not challenged. Otherwise, if there are too many exceptions, the OKR culture cannot be established.

How to Consolidate OKR Culture #

Chinese culture has a long history. Although each dynasty is no longer in the same era as us, we can still understand the cultural characteristics of each era through books, stories, relics, and other carriers that have been passed down.

The three levels of OKR culture can also be presented through these carriers. For example, books and articles can present the basic assumptions and explicit values that influence people’s thinking patterns, and decorations, tools, or products can express the artificial ornaments of culture.

Therefore, to consolidate OKR culture, we also need tangible carriers of OKR culture that people can “touch” (shown below).

With these carriers, OKR culture has the ability to spread and continue. It can continuously influence more groups to adopt OKR behavior through these tangible cultural consolidations until it becomes an organizational habit.

However, developing new organizational habits takes time. It also requires the means of culture monitoring to continuously shape OKR culture. The three steps of OKR culture shaping: changing thinking, managing, and setting rules, need to be continually promoted to maintain and consolidate the group behavior of applying OKR, so as to prevent distortion of OKR culture.

At JD.com, I monitor and measure OKR culture by conducting assessments every quarter. Here, I would like to share with you some of the questions I have designed for OKR culture assessment. You can refer to them when promoting OKR culture in the future.

(Scoring explanation: 0-Unable to do it at all, 1-Rarely do it, 2-Occasionally do it, 3-Often do it, 4-Frequently do it, 5-Always do it)

Each evaluation question has a score from 0 to 5 based on the degree of execution. After designing the questions, they are distributed to all members of the department to score. After collecting the OKR culture monitoring data from the entire department, I will develop improvement plans based on the scores. For example, if the scores show that there are problems with the team’s execution process of OKR, I will delve into the teams or departments with lower scores to review the OKR execution process and form specific improvement suggestions regarding the OKR process.

Here, I would like to remind you that in order to ensure the authenticity and reliability of culture monitoring and measurement data, you need to personally lead the culture management team to collect feedback from frontline employees, conduct spot checks, analyze the real implementation of OKR culture at the three levels, and report the results of each cultural measurement upward. Continuously obtaining support and feedback from the boss can promote the better implementation of OKR culture.

Therefore, consolidating OKR culture not only requires finding carriers that can bear the OKR culture based on the three levels of culture, but also requires cultural monitoring to maintain and consolidate OKR culture.

Summary #

Culture, whether at an individual, team, corporate, or national level, will be influenced by it. It is our way of adapting to the environment for survival. Although corporate cultures differ, we need to understand that only cultures that adapt to the market and business environment are considered good cultures.

The cultural philosophy brought by OKR, which is performance-oriented, encourages innovation, focuses on processes, and embraces uncertainty, can activate organizations and individuals, enabling organizations to thrive better and longer. Therefore, we need to learn how to shape and consolidate OKR culture.

So, what is the current culture in your organization like? If you were to shape OKR culture, where would you start? As carriers for consolidating OKR culture, which ones do you find particularly convenient to use? Feel free to share and exchange ideas in the comment section, and I will provide advice to help you build a strong organization armed with OKR culture.

Lastly, we all know that changing culture is difficult. So, do we have any strategies to better implement OKR? Please see the next lesson, “Challenges and Solutions for OKR Transformation.”