Strategy led Objective and Key Results (OKRs)
This is part 5 of “Teach them to long for the endless immensity of the sea”, a series on different ways to align an organisation. You will find here:
- part 1 of the series here: An organization drifting without clear direction, led by the customers’ requests
- part 2 here: A command and control management style, where the management hires mercenaries to execute their orders.
- part 3 here: A strategy that doesn’t focus anything, leading to a low alignment between colleagues and units.
- part 4 here: A focus on short and middle term where the long term investments are difficult to make.
In this fifth part the organization has a strong strategy in place and uses Objectives and Key Results to guide towards its direction.
Situation: A clear Strategy covering 2-5 years, OKRs covering the next year (and maybe next quarter)
This is what I have seen as an optimum so far, there may be better but I haven’t met it in my professional life yet. The way I’ve seen it work is that the C-suite makes a clear strategy on what we aim to reach in the coming years, what the business will look like at the end of the period, and adjusts that strategy when needed. Every year, new OKRs define the bets we taking to go towards the strategy. Like in the previous case, there is likely to be short term objectives there too, but many will be stepping stones towards the strategy.
Aligning units on the objectives usually takes quite a bit of time (Our current organisation fiscal year starts in July so we start talking OKRs in January when we review talking where we are with the current ones). This time is very important as the discussions are going to be the first source of alignment.
An example: You unit wants to launch the new product you have been piloting positively next year, but for that product, you will need a lot of marketing to generate visibility. If that objective of launching successfully the new product is not on the marketing team radar, you will get very minimal help, as they need to focus on their objectives.
Successes:
Shared in an accessible to all location, everyone gets to see how each unit intends to impact the business strategy. Every employee is going in the same direction, following what was commonly agreed to be what is the focus (and what is NOT the focus) of our attention.
Employees know why decisions are taken, following the stars of OKRs and values.
Ideas proposed by employees in the direction of the OKRs and the strategy get much more attention than they would otherwise.
Difficulties:
It’s very difficult to get everyone to be aware and interested in the OKRs. There are still many who are not aware of what is in the OKRs. This leads to some misunderstandings where the management expects employees to make decisions given the frame of the OKRs and employees expecting management to guide them on what to do.
The understanding of OKRs may not the same across the whole organization, and if not kept in check, people will naturally revert to output focused objectives (hello “initiatives”) rather than outcome focused.
I’ve also heard many times that many items shouldn’t be related to OKRs. For example, when it comes to improving the ways of working. I’m personally not sure how I feel about it: On one hand, improving the ways of working may lead to easier ways to fulfil the OKRs, on the other hand, it’s time not spent on trying to reach the OKRs so it may make it more likely to fail.
One final drawback could be that not everyone wants that responsibility. Some employees will always prefer having a manager to blame for being in a hole rather than finding ways by themselves to get out of the hole.
Possible ways to improve:
I cannot speak with a lot of experience, but at least in the current situation, improving the understanding of “outcomes vs output” across the organisation, accountability of people on owning their OKRs and visibility across the whole organisation have been a good starter points.
Employee experience
A few comments you may hear:
- “It’s on us to get this done” => People who want to have an stronger impact on the strategy will naturally come forward when given the chance. Their input will be very valuable.
- “We shouldn’t do X, it goes against our OKRs and our strategy” => When given good visibility, your team are given the chance to correct their direction by themselves. Given a chance because depending on your company culture they will or will not take it ;) .
Alignment inside the team and around a product
This article is very focused on alignment across the whole organization. I may write something more specific later on alignment around a product and a product team, notably through the product strategy.