The First Law of Creating OKRs
Two essential ingredients both managers and employees must address in order to create OKRs that actually work and move your company forward.
OKRs have been proven to help overcome many vexing challenges that plague modern organizations.
For example, they can: foster teamwork and collaboration, drive engagement through their mix of top-down and bottom-up development, and ensure your focus is fixed squarely on just the things that matter most for your success.
But you know what they can’t do? No matter how much you hope and try, OKRs cannot overcome a lack of strategic understanding on the part of employees. In fact, the opposite is true, hence the title of this article.
If you don’t possess a solid understanding of your organization’s strategy you’ll find it exceedingly difficult to develop OKRs that move the needle on anything that really matters.
Let’s go back to basics. Why are you creating OKRs?
There may be a multitude of reasons offered, but when it comes right down to it, the fundamental reason has got to be accelerating the pace at which you learn about your business with the ultimate aim of executing your unique strategy.
Why else play this game? If it’s to rack up badges and advance to new levels you’re barking up the wrong tree.
At their core, OKRs are about providing business insights and results that drive execution. That’s execution as in “strategy execution.”
Thus, the inherent assumption in creating effective OKRs is that you have a deep understanding of your company’s strategy so that you are able to use OKRs as a translation mechanism signaling your contribution to overall success.
Is that assumption valid in most organizations? Not even close.
Surveys and studies abound regaling us in the sorry state of strategic knowledge in most companies. In one recent survey a full 80 percent of senior executives said their overall strategy was not well understood within their own company.[i]
Many definitions of strategy exist, but all share the belief that strategy is primarily concerned with the broad priorities an organization adopts in order to gain competitive advantage.
Those priorities address such crucial dimensions as: customers and markets served, products and services offered, necessary capabilities, and the value proposition that makes their offer irresistible to customers.
Regardless of where you sit on the corporate hierarchy, if you don’t know the answers to those core strategy questions, there is absolutely no way you can construct OKRs that will drive the company forward.
Sure, you may see incremental operational improvements from OKRs created without benefit of strategic understanding, but strategic headway? Forget it, not going to happen.
And by the way, the time to discover you really don’t know much about your company’s strategy, is not when you’re eating your first bagel at your OKRs drafting workshop.
That’s too late, as in that old, but apt, adage: The only thing worse than bad news is bad news late.
What is your purpose as a team?
To make things even more challenging, in order to create OKRs that matter, not only must you master the company’s strategic curriculum, but you must also know what your own team, department, or group stands for.
If you have twelve people in your unit and every person has a different view of why you exist, once again good luck trying to create OKRs that will move the ball down the field.
The good news in this debris field of depressing statistics is that helping employees understand strategy doesn’t have to be difficult. Here’s what it demands:
1) Your Executive team has developed and aligned around a core strategy that covers the points raised above. If that’s not the case, you’ve got bigger problems than bad OKRs.
2) A commitment and willingness to openly and frequently share information on strategy. That doesn’t mean distributing a hundred page binder teeming with charts of eye-straining eight point font to every employee.
It simply means holding open and frank discussions that feature two-way conversations about where the company is headed and how it hopes to get there.
That’s it. Employees will take it from there.
Armed with the knowledge of the company’s master plan they’ll be able to determine how they fit in, what’s most important to making progress, and how to measure that in the next 90 days.
Just like Superman, OKRs have their own version of kryptonite. It’s called ignorance of strategy; not as catchy a title, but absolutely as deleterious to results.
The antidote is simple and readily available: development and communication of strategy. Try it. We think you’ll like it.
To learn more about OKRs, please check out our new book, “Objectives and Key Results.”
[i] Paul Leinwand, Cesare A. Mainardi and Art Kleiner, Strategy That Works, (Harvard Business Review Press, 2016)
This blog was originally published on OKRs Training and has been reposted here with permission from the author.