This is the another post in my series comparing Strategy Deployment and other approaches, with the intent to show that there are may ways of approaching it and highlight the common ground.
In May this year Dan North published a great post about applying OKRs – Objectives and Key Results. I’ve been aware of OKRs for some time, and we experimented with them a bit when I was at Rally, and Dan’s post prompted me to re-visit them from the perspective of Strategy Deployment.
To begin with…
Lets look at the two key elements of OKRs:
- Objectives – these are what you would like to achieve. They are where you want to go. In Strategy Deployment terms, I would say they are the Tactics you will focus on.
- Key Results – these are the numbers that will change when you have achieved an Objective? They are how you will know you are getting there. In Strategy Deployment terms I would say they are the Evidence you will look for.
OKRs are generally defined quarterly at different levels, from the highest organisational OKRs, through department and team OKRs down to individual OKRs. Each level’s OKRs should reflect how they will achieve the next level up’s OKRs. They are not handed down by managers, however, but they are created collaboratively by challenging and negotiating, and they are transparent and visible to everyone. At the end of the quarter they are then scored at every level as a way of assessing, learning and steering.
As such, OKRs provide a mechanism for both alignment & autonomy, and I would say that the quarterly cascading of Objectives, measured by Key Results, could be considered to be the simplest form of Strategy Deployment and a very good way of boot-strapping a Strategy Deployment approach.
Having said that…
There are a few things about OKRs that I’m unsure about, and that I miss from the X-Matrix model.
It seems to me that while OKRs focus on a quarterly, shorter term time horizon, the longer term aspirations and strategies are only implied in the creation of top level OKRs and the subsequent cascading process. If those aspirations and strategies are not explicit, is there a risk that the detailed, individual OKRs don’t end up drifting away from the original intent?
This is amplified by the fact that OKRs naturally form a one-to-many hierarchical structure through decomposition, as opposed to the messy coherence of the X-Matrix. As the organisational OKRs cascade their way down to individual OKRs, there is also a chance that as they potentially drift away from the original intent, they also begin to conflict with each other. What is to stop one person’s key results being diametrically opposed to someone else’s?
Admittedly, the open and collaborative nature of the process may guard against this, and the cascading doesn’t have to be quite so linear, but it still feels like an exercise in local optimisation. If each individual meets their objectives, then each department and team will meet their objectives, and thus the organisation will meet its objectives. Systems Thinking suggests that rather than optimising the parts like this, we should look to optimise the whole.
OKRs do seem like a simple form of organisational improvement in which solutions emerge from the people closest to the problem. I’m interested in learning more about how the risks I have highlighted might be mitigated. I can imagine how OKRs could be blended with an X-Matrix as a way of doing this, where Objectives map to shared Tactics and Key Results map to shared Evidence.
If you have any experience of OKRs, let me know your feedback in the comments.