PMO | How Many Mistakes Can be Made on OKR

​OKRs (Objectives and Key Results) are like a piano quietly yet elegantly placed in the corner of our living room. While they have the potential to create beautiful music, only a skilled pianist can truly master them. Without a proper understanding and effective usage, OKRs can lead to mistakes that waste resources and negatively impact results.To follow up on the earlier discussion-What is OKR, let’s discuss common mistakes and explore how to avoid them in our practice.

1. Unbalanced objectives can lead to OKR project failures. For example, a Ford   Pinto failed miserably because of weighted heavily on low-cost, efficiency and a rapid time to market while neglected the essential safety standards, resulting in fatal flaws. Similarly, Wells Fargo's excessive focus on new customer enrollment led to individuals holding multiple accounts, ultimately damaging the company's reputation. This situation also relates to the core effects of measuring performance. Our measurements must be balanced; targeting the wrong metrics can lead to unintended consequences.
2. Setting Too Many OKRs Overloading teams with too many objectives, leading to a lack of focus and poor execution. The team could spread themselves too thin, constantly shifting priorities and burnout. Each detective should not exceed 3 OKRs, and the team should be restricted to 5 OKRs. If the OKR achievement is less than 30%, it is a red flag.
3. Confusing OKRs with Tasks Writing key results as to-do lists rather than measurable outcomes. This is a common mistake when measuring efforts rather than impact. For example, Fixing 10 bugs (output) per week is not an OKR. Rather than reducing the problem backlog by 30%, customer satisfaction from 3.5 to 4.5 is an OKR. Another example is making 200 sales calls per week, which is incorrect, but using an increased customer conversion rate from 5% to 10% to measure actual business impact.
4. Setting Vague or Unmeasurable OKRs Creating objectives that are too broad or impossible to measure. For example, Improving brand awareness is not an OKR because progress cannot be tracked at the end of the quarter. Instead, Increasing website traffic from organic search by 40% (from 50,000 to 70,000 monthly visitors) is an OKR. 
5. Making OKRs Too Easy Setting easily achievable goals that don't drive meaningful progress. If the OK completion rate is above 70%, there is a red flag
6. Setting Unrealistic or Overly Ambitious OKRs Creating goals that are impossible to achieve, leading to demotivation. For example, A CEO Increasing revenue by 500% in three months is unrealistic; instead, Expanding into two new customer segments and growing revenue by 30% is motivating and achievable. 
7. Not Aligning OKRs Across Teams Alignment is critical for the success of OKR. Different departments set OKRs without ensuring they contribute to company-wide goals. For example, the product team's objective was to Launch a new mobile app by Q3, " while the IT team's focus was to reduce infrastructure costs by 20%." IT delayed resources for mobile development to save money, causing conflicts. They had to realign to ensure IT's cost savings didn't block product success.
8. Not Reviewing OKRs Regularly Setting OKRs at the start of the quarter and not tracking progress. A monthly review cadence could help catch the issue earlier.
9. Not Communicating OKRs Clearly Teams don't understand how their OKRs contribute to the company's success. For example, An HR department set an OKR: **"Improve employee retention by 20%."** However, managers weren't informed about their role in employee engagement. Without buy-in from leadership, retention rates remained unchanged.
10. Not Tying OKRs to Business Priorities Setting goals that don't contribute to the company's strategic direction. An engineering team set an OKR: **"Adopt a new coding framework."** While technically interesting, it had no clear impact on user experience or revenue. Leadership redirected them to an OKR focused on Improve app load times by 50% to enhance user retention.
11. Creating OKRs That Are Too Complex Making key results overly detailed or difficult to track."Reduce average delivery time from 5 to 3 days while keeping costs stable." It is better to Reduce average delivery time from 5 days to 3 days than maintain a cost-per-mile below $0.30, reduce fuel consumption by 15%, and increase driver satisfaction by 25%.”
12. Ignoring Dependencies Between OKRs Setting goals that rely on other teams without coordination. The customer success team set an OKR:"Increase customer referrals by 20%. However, the product team had planned major updates that disrupted user experience. Without alignment, referrals actually **decreased** as frustrated customers left.
13. Not Learning from Past OKRs Repeating mistakes without reflection. A retail company consistently missed its OKR **"Increase online sales by 50%."** Leadership blamed marketing, but when they reviewed past data, they realized **inventory shortages** were the real problem. Adjusting inventory planning **finally** led to success.
14. Treating OKRs as Performance Evaluations Tying OKRs directly to employee bonuses or performance reviews. A sales manager told employees that hitting **100% of their OKRs** was required for a bonus. Instead of setting ambitious goals, employees **sandbagged** their OKRs, choosing easily achievable targets to secure their rewards. As a result, company growth ​

In summary, we need to start with a balanced set of objectives and set fewer, more focused OKRs (3-5 per team) to maintain clarity and direction. These OKRs should be measurable and outcome-driven rather than merely activity-based, ensuring they contribute to meaningful progress. It is crucial to align them with the company’s strategy and communicate them effectively across teams to foster collaboration and shared purpose. Regular tracking, whether weekly or monthly, allows for necessary adjustments and keeps teams on course. While ambition should be encouraged, goals must remain realistic and motivating to sustain engagement and drive performance. By avoiding common pitfalls, teams can leverage OKRs effectively to achieve impactful and measurable results.

Editors’ note (2025/01/31): The stories of Ford and Wells Fargo are taken from "Measure What Matters" by John Doerr, which was originally published in 2018. This book offers valuable insights into the concept of OKRs (Objectives and Key Results) and serves as an excellent resource for anyone interested in implementing effective goal-setting strategies. After reading it, we updated our writing to incorporate key learnings from the book.