Most articles about OKRs sell them. Cornelius Schmahl explains why they fail.
Schmahl learned the framework at Uber. The system ran Uber, not the people implementing it. Goals were clear, personal OKRs sat alongside company OKRs (an employee could carry a goal like running a marathon next to one for driver acquisition), and progress was shared every week in team meetings. The framework was a big part of why the company scaled the way it did, and the year Schmahl spent inside Uber Russia, restructuring an operation that was burning ahead of its $1 billion sale to Yandex, is where he saw it work at its hardest.
Then he left. He started coaching founders. He tried to install the same framework he had seen work at Uber. And it failed, again and again, in ways that took him years to understand.
The framework was built for animals
OKRs were invented by Andy Grove at Intel. They spread to Google, then everywhere. Schmahl points first-time founders at Andy Grove’s book. Grove designed the system for a company that was already extraordinary, full of people who had selected themselves into a culture of relentless execution. Google ran the same playbook for the same reason. Both companies were already hypergrowth before the framework arrived. The framework did not create the culture. The culture made the framework possible.
Cornelius Schmahl was Uber’s first non-graduate hire in Munich and held commercial operations roles in Germany, Africa, and Russia ahead of the company’s $1 billion Russia exit. He has made more than 100 angel investments across six continents and runs Unicorn Coach and UnicornHabit from Khao Yai, Thailand.
The problem, Schmahl says, is that whoever implements OKRs today is not Andy Grove and not the Google founders. “The people they’re implementing it with are not the mad animals who chose to work seventy hours a week at Uber,” he says. “They are normal people with families and commutes and weekends and a reasonable desire not to die at their desks.”
The standard framework barely works because the devil is in the execution. What a lot of teams do, in Schmahl’s experience, is three days of everyone making great plans, after which the workshop ends and everyone does nothing. He watched this happen at his own coaching clients, the first times he tried to install OKRs outside Uber. “I was confused,” he says. “These were smart, motivated people. They wanted the company to win. And yet the system that had run Uber slid off them like water.”
Eventually he understood. The framework assumes a layer of behaviour that most companies do not have. It assumes that once a leadership team sets a goal and a key result, people will figure out the daily work and do it. At Uber that assumption held, because the people there had self-selected into a culture where the daily work was the point. Everywhere else, the assumption is the gap.
Most installations of OKRs fail at this exact gap, and the failure is invisible at first. The leadership team comes out of the workshop excited. The objectives are written, the key results are measurable, the cadence is on the calendar. For the first six weeks it looks like the framework is working. Then a quarter passes and the key results have not moved much, and nobody can quite explain why. The answer is always the same. The framework defined what success looked like. It did not define what anyone was supposed to do on Tuesday morning.
Goals are obvious. Execution is the only thing
Schmahl has transmuted the framework a lot over the years. Away from the three-day high-level goal-setting session, and toward the recognition that the goals are very obvious and the same every year. More revenue. Better retention. Fewer bugs. Faster delivery. A team does not need a workshop to discover them. “It’s all about the execution,” he says.
So the question Schmahl now spends his time on is how to combine goal-setting with habit-building. Because there is nothing but habits. He cites James Clear’s Atomic Habits as the book that reshaped his thinking on this. What he was forced to do, he says, was bring those learnings together with psychology and change management, and implement all of that into the OKR framework. Otherwise the workshop ends, everyone is a bit excited or frustrated, and then nothing happens.
What the rebuild looks like in practice is much smaller than people expect. Schmahl strips the OKR setting down to one objective and two or three key results. Each key result is immediately translated into a daily or weekly action that someone owns. The tracking is instrumented so it takes a person on the team five minutes a day to update. There is a consequence attached to the tracking, so that not updating is a visible event rather than a quiet one. None of this is clever. All of it is required.
Schmahl has a single test for whether a company is doing this right. Walk in on a Tuesday morning. Ask three random people on the team what they are working on. If the answers connect, in a single chain, to the one objective the leadership team set for the quarter, the system is working. If the answers are about whatever showed up in their inbox that morning, the system has collapsed and nobody has noticed yet. “I have done this in companies that had spent six figures on OKR consulting,” he says. “The answers were about inboxes.”
A unicorn is a stack of habits
The mistake Schmahl sees in nearly every company he works with is the same. The OKRs are great. The daily tracking is missing. When he asks the executive team what their daily tracking is, what the consequences are if people don’t do it, where the accountability sits, the answers go vague. That is where it falls apart.
Schmahl has worked inside or invested in nine companies that reached unicorn valuations, including Climeworks, Lime, Liquid Death, and Yassir. The companies that get there, he says, are not the ones with the most ambitious OKRs. They are the ones where, on a Tuesday in March, the right work is happening for the right reason without anyone needing to chase it. That looks boring from the outside. It is not boring to build.
“A unicorn is not a big dream,” Schmahl says. “A unicorn is a stack of habits of many people working extremely well and extremely focused on the goal. That’s what most people get wrong.”
