Objective and Key Results: All Hands on Deck to Take Performance Management From OK to Great

The following is an excerpt from The 50: HR Leaders Reimagining the Filipino Organization. Authored by Pancho Dizon, this chapter is titled, “Objective and Key Results: All Hands on Deck to Take Performance Management From OK to Great.” In it, Karlo Jay Plata, the Chief People Officer of QuadX, is interviewed about how the organization executes its strategy in using OKR's as a driving factor in output.

At a large number of organizations, performance management is pretty much synonymous with tracking key performance indicators or KPIs. KPIs that encompass things like revenues, profit margin, customer satisfaction, net promoter score, and attendance rate have thus become integral to a countless number of organizations everywhere.

But what lies beyond KPIs?

If you ask Karlo Jay Plata, Chief People Officer for cross-border digital logistics and payment processing company QuadX, the answer is simple. Objectives and Key Results or OKRs take a broader and more inclusive approach to goal-setting and performance management in general. While KPIs focus heavily on individual metrics or outcomes, OKRs put a spotlight on the company’s highest aspirations and translate them into actionable and meaningful goals for the entire organization. KPIs are helpful if a company is concerned with measuring success of an individual, team or a project. OKRs set an organization’s strategic direction and rally everyone towards it.

“Implementing OKRs made the biggest sense for me as I ponder on why I became an HR person in the first place. I wanted to connect meaning and purpose to everyone’s job, and I think there’s no better way to do that than OKRs. In QuadX, it means helping every employee know how they can contribute to building future entrepreneurs,” Plata said.

In its simplest sense, objectives are the things one wants to accomplish, stated in a way that is concrete, action-oriented, and connected to the overall mission of the company. Key results, on the other hand, are the measures or benchmarks that tell you how to meet the objectives. As such, they should be specific and quantifiable, aggressive but realistic. If losing weight is the objective, key results would be calorie intake and minutes of exercise.

This sort of overarching view, Plata explained, is suited especially for hungry and ambitious companies like QuadX. “Implementing something like OKRs is hard work,” he confessed. “But it’s certainly worth it. I love working with OKRs for QuadX because it’s a match for the dynamic, innovative nature of the company. But it certainly isn’t suited for an organization that just wants to get by or to stay within the status quo.”

Such words from Plata, of course, are not just groundless.

In the case of QuadX, implementing OKR means leveraging technology, such as a third-party performance management platforms that help employees keep track of their deliverables on a more frequent basis, e.g. quarterly, in contrast to traditional systems where output is measured on an annual basis. This is supplemented by frequent “feedback conversations”, ideally weekly, between the employee and their manager regarding their progress.

These conversations are a must―OKRs are nothing without them. In this dialogue, both manager and employee bring to the forefront the tasks and the activities surrounding the OKRs. When done right, it reinforces positive behaviors (through recognition) and allows for course correction (through feedback and providing support).

“This is what I like best about it,” Plata said, “It keeps things focused, yet effective in tracking progress and contribution within and across teams. That’s powerful in engaging employees and bringing out the best in them. It’s easy to lose track of things if you’re taking too much of a long-term, backward view of performance. With OKRs, employees know on a regular basis where they are, what the performance gaps are, and what it is they need to be doing to get on track. It creates a sense of achievement and a cadence of commitment.”

According to Plata, this gives way to another benefit of working with OKRs: transparency across the board. Because OKRs are meant to be published for all the organization to see, it is easy for everyone to know what exactly anyone is doing that contributes positively towards the company goals. Large groups tend to work in alignment with each other, ultimately removing silos and barriers to open communication.

Finally, OKRs enables the organization to stretch for truly great work. By allowing teams to set a high bar to reach, it creates an environment where people are not afraid to take risks and achieve things they wouldn’t have thought possible.

“With OKRs, leaders set the tone by discussing and coming to an agreement on the company’s highest priorities and the people are pulled into dynamic conversations on how they can impact those priorities. Unlike traditional goal-setting, OKRs are multi-directional, where inputs can come from literally anywhere, top-down, bottom-up, and even sideways between teams, departments, or function. OKRs allows each member of the organization to connect the dots between individual goals and company objectives,” Plata explained.

“Before we went with OKRs, the performance management system at QuadX admittedly needed a little work. Different teams had different ways of going about appraising performance. Some teams had success in getting the results they needed, but some didn’t,” he shared.

But despite the benefits eventually brought on by the practice, the HR head admitted there were a host of challenges when they first started implementing OKRs in QuadX.

“We had to launch and re-launch OKRs over the course of a few quarters. Setbacks came from all sides of the implementation plan. Looking back, I guess every organization would need to carve out its own OKR journey. Knowing the concepts, and the process is very different from actually using them. Organizational factors like culture, legacy systems, business model, all of it make the implementation as complex as any intervention on human behavior.”

More than having to select the right tech platform and train people how to use it, the bigger challenge was to change mindsets: how people viewed goal-setting and how performance reviews should be. This meant having to frame performance management in a way that was fresh, engaging and relevant.

According to Plata, the most important thing that helped the organization transition was to shift from calling it performance management to performance development. “There’s something about the word management that people were averse to. I surmise that it reminds them of the often dreaded and negatively connoted annual performance reviews. Introducing the term development and focusing on the future instead of the past, made all the difference.”

“The goal is to make the person outlearn and outdo themselves!” he exclaimed.

While the role of the frontline leaders could not be over-emphasized in ensuring both the principles and the process involved in OKR implementation pervaded the organization, the biggest factor in organizational adoption for a key people process like OKRs is the openness and buy-in of the leadership team.

He cited the example of Dino Araneta, the company’s Founder and Chief Executive Officer.

“I was still new at that time, and my Head of People Strategy was just starting to consider OKRs as a game-changer for QuadX. I remember mentioning to him the concept of OKRs in one random conversation and how we thought it could play a big role in how we manage performance as a company. To my surprise, before I even got to pitch a more elaborate plan, he had already bought “Measure What Matters” by John Doerr and read it. He actually had researched OKRs and even had notes about his insights on the topic!”

It’s leadership like this that makes the adoption of new ideas that much easier, and plays a critical role in setting an example on embracing change that enables exponential growth.

It stands to reason that a company like QuadX is forward thinking and Plata certainly understands the role HR can play in guiding the company to a better tomorrow.

With the COVID-19 pandemic having forced businesses to shift to a work-from-home setup, Plata is happy to report that OKRs have actually made the transition less of a challenge. This is due to the fact that priorities are set straight and clear at the beginning of a performance cycle, and as people engage in performance conversations on a regular basis, there’s less of a need to constantly check what they’re doing. With core values like “Think Big. Do Big.” And “Keep Moving Forward”, the company embarked on a journey to create a culture of excellence and that makes QuadX employees well-equipped for working in the new normal.

Plata also shared that the company is constantly on the lookout for other emerging technologies and how they can help the organization achieve exponential growth. “We know that technology enables key HR processes like OKRs to run smoothly and effectively. It’s apparent that HR has definitely caught up on the trend and I couldn’t get more excited. We’ve seen new technologies that could enable people's operations scale faster and better. For example, incorporating self-help tools for employees with AI and machine learning, virtual and augmented reality for candidate testing and screening, the list goes on!”

The future of work is now. And HR is at the forefront in ensuring our workforce is ready and equipped. The shift towards implementing a more dynamic and progressive process like OKRs is just one of the many things to look out for. Embracing new ways of thinking and new technologies is not a question of if, but of when. The sooner we adapt, the better our chances of surviving and thriving.

To get more insights from other HR leaders like Karlo Jay Plata, please check out the full book, available for purchase here


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