Objective and Key Results (OKRs) without strategy
This is part 4 of “Teach them to long for the endless immensity of the sea”, a series on different ways to align an organisation. You will find the part 1 of the series here, part 2 here and part 3 here
- In the first part we looked at an organization that is drifting without clear direction, led by the customers’ requests.
- In the second part we looked at command and control management style, where the management hires mercenaries to execute their orders.
- In the third part we looked at a strategy that doesn’t focus anything, leading to a low alignment between colleagues and units.
In this fourth part we apply google’s OKR framework but we do not have a strategy in place for the company yet.
- Objective and Key Results (OKRs) is an alignment tool where the whole company collaborates to define objectives (yearly and quarterly) and the way to measure progress on those (Key Results).
- Key results are written as measurable outcomes that progress as we become closer to the objective completion. I’ve put a very complete read on the subject by Itamar Gilar at the bottom of this post.
OKR created without long term strategy
Situation: Some mission/vision, strategy is not existing, okrs used instead of strategy
The OKR framework is a really powerful tool to align everyone across the company. This is partly due to the fact that it is used both top-down and bottom-up, so everyone gets heard on what do we aim and how do we measure it.
What I have seen done are yearly objectives (1-year timespan) and quarterly objectives (3 months timespan). It’s always been that yearly are there first and maybe there would be quarterly ones.
Now the issue about this is that 1 year is a very short time when working on a product. Usually you want a Product Strategy to cover 2 to 5 years, but what if your organization plans only for the next year?
Successes:
OKRs, if done correctly, provide a good alignment for the coming year. Key Results evaluated monthly allow for quick pivoting of initiatives.
Sales, Marketing, HR can correctly set objectives related to their functions:
- Human Resources usually want to keep employees happy, churn low and have skilled candidates in the pipeline.
- Marketing will put objectives on building more visibility on what the company can do for its customers.
- Sales can aim for more sales, newer markets (with marketing)
Difficulties:
Problems arise when we arrive to product/tech. While other functions can be fine taking a tactical approach, and be relatively successful with it, tech needs to think further.
This is inherently due to the fact that building something valuable is very slow. With modern discovery techniques, one can find potential value fairly fast, but then iteratively building and validating is a slow process.
Building a product for 1 year and then changing objectives? At this point you barely have started delivering something valuable to customers. Since the product strategy is looking at a term of 5-8 years and the OKRs 1 year max, you can’t exactly align to them. They are rather going to be an influence on the items of your short term roadmap, and your product strategy will be an influence to the OKR choices.
As the products mature, different issues arise.
Now your engineers need to rebuild one of the core elements and predict a few months of work. If your objectives cover just 1 year, defending the re-building operation becomes very difficult. It gets push forever forward and you end up spending more and more resources to maintain the monster in making.
The way I see it, navigating OKRs without Strategy is already a massive improvement over the previous techniques as it already gives a common direction. The shorter term goals forces local optimization rather than long term value and that’s where the problems arise.
Possible ways to improve:
Honestly, the only way I see is to start thinking further and introduce a longer timespan strategy.
It shouldn’t be such a big leap from planning the OKRs. There probably were discussions on what do we aim for in the further future during the OKRs planning, and the agreements that emerged are good building material for a strategy. Now agreeing on a common strategy is gonna be hard, because everyone around the table is having different desires. But if the company is going to align to one direction properly, there is no going around it.
Employee experience:
A few comments you may hear:
- “I feel that we are getting somewhere, but I’m not sure where” => Lack of direction, disconnect between goals and purposes
- “You cannot do this very important refactor, it will hurt our OKR results” => The choice between investing in a long term issues and reaching the Key Results is quickly made, long term can be dealt with next year (or the next, or the next, or well when our business objectives are not that tough (Tip: They always will be))
Read more
“OKRs done right” by Itamar Gilad
In the next post: We look at Objective and Key Results (OKRs) used instead of a strategy —