Your OKRs Are Not Strategy. They Are Performance Theatre.

# Your OKRs Are Not Strategy. They Are Performance Theatre. **Direct answer:** A company can hit its OKRs and still fail its strategy. A goal is useful only when it changes decisions, aligns teams, and produces an outcome the business actually needs. Most companies do not have a goal shortage. They have a goal system that rewards local scorekeeping. MIT Sloan Management Review reports that **95% of organisations** in a recent survey had employees set goals for themselves or their teams. That sounds disciplined. But in a study of **124 large organisations**, fewer than one-quarter of middle managers knew their company’s strategic priorities. In a strategy-execution survey of more than **400 organisations**, only one-quarter of managers said their goals were understood by colleagues in other divisions. That is the uncomfortable gap: almost everyone has goals, but most people do not understand the strategy those goals are meant to serve. Sources: [MIT Sloan Management Review, “With Goals, FAST Beats SMART”](https://sloanreview.mit.edu/article/with-goals-fast-beats-smart/), [Google re:Work, “Set goals with OKRs”](https://rework.withgoogle.com/intl/en/guides/set-goals-with-okrs), and [IBM Think, “What are objectives and key results?”](https://www.ibm.com/think/topics/okrs). ## Green dashboards can hide a red company An OKR dashboard often looks like control. Green means on track. Amber means attention. Red means action. But the colour of a key result does not prove that the company is moving in the right direction. A sales team can hit pipeline targets while gross margin collapses. A product team can ship every feature while activation falls. A marketing team can hit lead volume while payback becomes impossible. A hiring team can reach headcount while management capacity breaks. The company can celebrate five green dashboards while the enterprise value moves backwards. This happens when teams optimise what is easy to count instead of what the strategy requires. It also happens when objectives are set privately, reviewed annually, tied directly to bonuses, and disconnected from the dependencies of other teams. MIT Sloan Management Review warns that traditional annual goals linked strongly to incentives can undermine alignment, coordination, and agility. They can encourage **sandbagging**: setting conservative targets that are easy to achieve. That is not strategy. It is performance theatre with a metric attached. ## What OKRs are supposed to do Google’s re:Work guide gives OKRs a more demanding job. Objectives should be ambitious. Key results should be measurable. OKRs should be public. A healthy stretch-goal grade is often **60% to 70%**, and a low grade should create learning for the next cycle. Google also says OKRs are not employee evaluations and not a shared to-do list. IBM describes objectives as qualitative, aspirational outcomes and key results as specific, measurable results. IBM recommends roughly **three to five priorities** and **two to four key results per objective**. The message is simple: OKRs are meant to focus a company on a small number of important changes. They are not meant to convert every activity into a quarterly target. ## The alignment failure is measurable MIT Sloan Management Review and its research team analysed a proprietary dataset of more than **half a million goals**. In a related BetterWorks dataset of more than **600,000 goals**, users made **more than 90% of their goals public**. Transparency helps. It lets teams see dependencies and discover when their work conflicts with another team. But transparency alone is not alignment. Publishing 600,000 disconnected goals creates a very visible maze. The same MIT research found that fewer than one-quarter of middle managers in a study of 124 large organisations knew their company’s strategic priorities. In another survey of more than 400 organisations, only one-quarter of managers said their goals were understood by counterparts in other divisions. That means a company can have public goals and still have private strategy. ## Performance theatre versus strategy-linked goals | Question | Performance theatre | Strategy-linked goal system | |---|---|---| | Main purpose | Prove activity and protect a rating | Change a business outcome | | Goal count | Many goals for every team | Few priorities with clear trade-offs | | Time cycle | Annual or quarterly paperwork | Frequent conversation and course correction | | Metric design | Easy-to-count activity | Customer, cash, quality, retention, or strategic result | | Dependencies | Each team optimises locally | Teams name shared constraints and handoffs | | Incentives | Hit 100% or lose bonus | Stretch, learn, and protect long-term value | | Transparency | Publish dashboards | Publish goals, assumptions, owners, and conflicts | | Failure | Hidden or punished | Made visible early and used as data | | CEO question | Who is green? | Which strategic constraint moved? | ## Why founders create the problem Founders often introduce OKRs when the company begins to scale. Communication becomes harder. Teams multiply. The founder cannot attend every decision. A goal framework seems like a rational answer. Then the system grows: - Every team writes three to five objectives. - Every objective receives three key results. - Every key result gets a percentage. - Every percentage gets a colour. - Every colour becomes a meeting. - Every meeting becomes a report. Soon, the company has hundreds of targets but no clear answer to the most important question: **what must be true for the strategy to work?** The founder has not created alignment. The founder has created a reporting industry. ## The founder audit **1. Write the strategy in one sentence.** If your leaders cannot state the strategic bet, OKRs will become independent wish lists. A strategy must define where to play, how to win, and what the company will not do. **2. Limit company priorities.** IBM recommends three to five key priorities. Treat this as a ceiling, not a suggestion to create five priorities for every function. **3. Start with constraints.** Ask what is preventing the company from reaching its next value milestone: activation, retention, margin, delivery capacity, trust, distribution, or cash. Build goals around the constraint. **4. Separate committed and aspirational goals.** A 99.9% uptime target is different from becoming the category leader. One requires near certainty. The other is a stretch and should produce learning even when it scores below 100%. **5. Measure outcomes, not motion.** “Launch a campaign” is an activity. “Increase qualified pipeline from the target segment while holding payback below 12 months” is closer to a strategic result. **6. Map dependencies.** If Product needs Sales evidence and Sales needs Product packaging, their goals are not independent. Name the handoff, owner, date, and risk. **7. Keep OKRs out of bonus mechanics where possible.** If people must hit 100% to protect compensation, they have an incentive to choose safe targets. Use judgement, contribution, and context for performance decisions. **8. Review every month.** Google’s model treats low grades as data. A target that becomes irrelevant should be changed, not defended because a spreadsheet already contains it. **9. Delete goals.** If a goal does not change a decision, resource allocation, customer outcome, or strategic learning, remove it. ## A better goal architecture At the company level, define one to three strategic objectives. For each objective, choose two to four key results that measure business change. Then ask teams to propose the smallest set of supporting goals that move those results. Every goal should answer five questions: 1. Which company objective does this support? 2. What outcome will change if we succeed? 3. Which metric proves the change? 4. Which team or dependency could block it? 5. What will we stop doing to fund it? If the fifth question has no answer, the goal is probably an addition to the workload, not a strategic priority.

## Frequently asked questions ### Are OKRs bad for startups? No. OKRs can help a startup create focus, transparency, and learning. The failure occurs when the company uses them as a status-reporting ritual, creates too many goals, or links ambitious stretch targets directly to bonus protection. ### How many OKRs should a startup have? There is no universal number. Google recommends roughly three to five objectives and about three key results per objective. IBM recommends three to five priorities and two to four key results per objective. The practical rule is fewer goals than your organisation can actively discuss and resource. ### What is the difference between a KPI and an OKR? A KPI monitors ongoing business health, such as uptime, gross margin, or retention. An OKR drives a change or improvement, such as reducing onboarding time or increasing expansion revenue in a target segment. IBM makes this distinction directly. ### Why do OKRs become performance theatre? They become theatre when teams are rewarded for green scores instead of business outcomes, when targets are private, when activity is mistaken for results, when dependencies are ignored, and when nobody is allowed to delete an obsolete goal. ### Should OKRs be linked to bonuses? Be careful. MIT Sloan Management Review warns that strong links between annual goals and incentives can encourage sandbagging. Stretch goals should be used for focus and learning, while compensation should consider judgement, context, collaboration, and long-term value. ### Should all OKRs be public? Most operating and strategic goals should be transparent because teams need to see dependencies. Sensitive personnel, legal, acquisition, and customer-confidential goals may remain private. Transparency is useful only when the goals are connected to strategy. ### What does a healthy OKR score look like? Google’s re:Work guide says 60% to 70% can be a healthy stretch-goal range. But the score is not the strategy. A 100% score on a low-value goal is worse than a 60% score on a critical goal that generated meaningful learning. ## Final verdict OKRs are not strategy. They are a measurement and alignment mechanism. Used well, they force trade-offs, make dependencies visible, and help teams learn faster. Used badly, they create the illusion of control while every function optimises its own dashboard. **Stop asking how many OKRs your company completed. Ask which strategic constraint moved, which decision changed, and what work you had the courage to stop.** ## Sources - [MIT Sloan Management Review — With Goals, FAST Beats SMART](https://sloanreview.mit.edu/article/with-goals-fast-beats-smart/) - [Google re:Work — Set goals with OKRs](https://rework.withgoogle.com/intl/en/guides/set-goals-with-okrs) - [IBM Think — What are objectives and key results (OKRs)?](https://www.ibm.com/think/topics/okrs)