In the ‘planning universe’ (for us planning nerds out there), OKRs – Objectives and Key Results – have been resonating strongly. Most notably, Google uses them and proactively promotes this planning framework for high growth companies. As a result, many organizations that we come across during the course of our consulting, are considering this approach to develop and execute their plans.
OKRs can be a great approach to drive alignment and accountability throughout your organization. Before you jump-on-board and start using OKRs, there are some important points to consider. But before we dive into these points, let us first set some context.
At Triviam Consulting we see the process of defining and executing your strategy as three distinct and highly inter-related activities.
Step 1. Strategy Planning. Is all about making choices that determine how your company will go-to-market and play a competitive game to eventually win market-share.
Step 2. Alignment & Synchronization. The result of step 1 is a high-level strategy plan that it is then leveraged in this step, via cascading its content throughout the organization in order to align and synchronize departments, teams and individuals.
Step 3. Strategy Execution. Finally, now that the strategy has been defined and cascaded, the focus shifts to ensuring effective execution, without which, none of the prior efforts result in benefits for the company and its stakeholders.
With this context, let us now discuss some important points to consider when implementing OKRs.
1. Direction - you still need a clear sense of where the organization is going. Even in the most agile form of strategy planning, you and your teams will need to understand the Purpose and have clarity on the Vision of where the company is going – or have a clear and articulate ‘north star’ in agile methodology lingo.
As good and effective as OKRs can be, they will demand a well understood sense of direction. Without it, the bottom-up and fully empowered goal setting process will likely result in a bunch of goals that together, lack consistency and synergy. In other words, the challenge is not defining goals, but defining the ‘right’ goals that if executed properly, will drive the results your stakeholders expect.
Even though OKRs are thought of as being part of a quarterly process, your organization will still need longer-term company-wide, agreed and clearly understood goals to guide the overall strategic direction for the company.
2. Do OKRs fit your company and its culture? One significant distinction the OKR framework has over more traditional ways of strategy planning is that instead of ‘pushing down’ a direction through accountabilities, the whole approach is designed to invert the process and ask individuals, at all levels of the organization, to make commitments that line-up with companywide objectives.
This is no subtle change in approach, and it demands a type of organizational culture rooted in high levels of trust and empowerment. So, before you embark on this journey ask yourself if your operating model and culture will allow for this agile and flexible approach to planning and executing.
3. What about the ‘how’? Finally, this methodology places a strong emphasis on Key Results, understood as a description of a deliverable or result, and not as a set of activities. The implication of this is, that OKRs do not concern themselves with ‘HOW’ you will deliver on your strategy. In fact, the premise is that as long as you know the result you want to achieve, “how” you deliver that result is not relevant.
For certain industries and for some operating cultures, this might not be a smooth transition. Without a strong and effective collaboration discipline and culture, this approach might lead to redundancy and significant friction. If, however, your teams have an inherent ability to work well together, to provide feedback, discuss and decide between individuals and teams, then OKRs might be a great choice for your company.
The premise that the future can be predicted is less and less valid – given the level of disruption and change we have been experiencing. This has only accelerated due to the pandemic. Thus, yearly centralized long-term planning does not ‘cut-it’ anymore. Planning needs to evolve to adapt to a new business reality (more on agile meets strategy planning coming soon). Ultimately, OKRs can be a great tool to drive alignment in your organization and enable a more adequate and timely planning approach. As long as you familiarize yourself with the ‘ins-and-outs’ of this framework, you should be able to asses if it’s a good fit for your company and circumstances.
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