#16 OKRS put PS on the implementation road

Strategic knowledge with Christian Underwood

In the new "Hope is not a strategy" episode, Christian Underwood explains how OKRs (Objectives & Key Results) can be used in the strategy process to build the bridge from strategy development to implementation and thus achieve set goals in no time at all.

OKRs are not a new concept. Nevertheless, many people do not realize what exactly is meant by the management tool of the three magic letters and what power Objectives & Key Results can also unleash in their own company: Employees understand how their daily work contributes to the company's goals and what value they personally add. Transparency in implementation, the right meeting routine, consistent progress tracking and regular reviews of OKRs are real drivers of success and promote self-determined work.

Find out exactly what makes the OKR methodology so magical, how best to integrate OKRs into management and the strategy process and why strategy in conjunction with OKRs is the "perfect match" in episode #16 "OKRs put strategy horsepower on the implementation road".

Detailed episode description:

OKR is not a new concept. Many people have heard of it, but have no concrete idea what it means or what goals can be achieved thanks to OKRs.

OKR stands for Objectives and Key Results - in other words, it is about goals and key results in order to achieve these goals. John Doerr took OKRs from IBM and introduced them there with the founders of Google. The system was established there and then taken out into the wider world as a vision. The concept is not only suitable for start-ups, but also for large, complex organizations, as it promotes transparency and thus supports teams and employees in achieving their goals. It is important to look at how OKRs can make an absolute value contribution to the company.

Focus: How to use OKRs in the strategy process

OKRs are a strategic management tool that can be used to manage a company, teams or yourself better and in a more targeted manner.

O stands for Objectives, i.e. qualitative goals, and KR for Key Results, i.e. quantifiable, measurable key results. This definition does not sound revolutionary at first. The magic lies in the consistent implementation in three-month cycles of the OKR sets, as well as a meeting routine adapted to the objective and goal tracking, which is then accompanied by weekly tracking of progress. Tracking is often done in Excel or in suitable digital tools, as this makes it very easy to check the results of the work. There is a wide range of tools available, which Christian has included in the show notes for you to read up on.

Proper tracking is extremely important so that there is transparency in the team about where the respective goals stand, what the goals of everyone and the company are and what everyone wants to work towards together.

The benefits of OKRs

It is great when each individual can see how they can make a concrete contribution to a common, larger goal within the company. On the one hand, this helps to create a sense of purpose (e.g. for the managers, teams or employees involved), but on the other hand it also leads to a very consistent pursuit of goals. In reality, this is more difficult than it sounds. You can define the best strategies for what you don't want to do in future, but when it comes to sticking to them and following them up consistently, that's when the real art begins. The introduction of the vision is therefore the easy part, but the implementation of this strategy is, as always, where the difficulty lies.

OKRs in the strategy process

Christian already uses the OKRs in the development of the strategy. These are already anchored as fixed objectives in the first strategy workshop, in the target image of the strategy frame.

Of course, you don't start the process directly with OKRs. First, you look at the situation analysis and then formulate an impact and value proposition (sustainable value proposition and the customer value proposition). These are two very important elements of the strategy that define the framework. Once a clear competitive focus - i.e. market, customer segment and portfolio - has been defined, the next step is concrete implementation. This means which defined goals you want to achieve and which goals should be pursued in order to turn the value and impact proposition as well as the competitive focus into reality. And this is exactly where OKRs come into play. They can be understood as the priorities that really make a decisive difference for the company when it comes to achieving the new strategy or implementing it. You should never lose sight of the company's own vision.

Implementing the strategy: how to proceed in concrete terms

Integrated into the first major strategy workshop, the first OKR sets are developed for the company or for the scope that the strategy should have. This can be a country, a region or a business unit, for example. It is important to communicate the methodology and the basic system behind OKR to everyone. So far, so good. However, experience has shown that when these three letters appear, it tends to create confusion at first. Christian therefore does not recommend spending two days on an OKR seminar in the strategy process, as this does not really lead to a better formulation of OKR sets. People are fundamentally designed to set goals and want to achieve them. We have simply often forgotten how to do this in our corporate and private lives. There is so much that we always do anyway and this is usually rarely questioned. OKRs are a great way of leaving out unimportant things in future and looking at where you can use your own resources in a targeted manner for the very important objectives in order to translate the vision into clear results.

Validity of OKRs in the strategy process

In the strategy context, the OKRs set should not just be three-month OKRs, as is the case by definition in the normal OKR cycle. This is because the objectives and key results are looked at again and again and the question is asked as to how far progress has been made in achieving the objectives. It can make sense for the strategy process to select a larger range. This is referred to as stretch goals, which can be implemented over 2-3 years (like the validity of the strategy). There are also so-called mid-term goals, which are valid for one year. If only 3-month targets are anchored in the company's main strategy, it can be relatively difficult to achieve the targets set. It would then be more decisive to translate the goals or stretch goals into ambitious 3-month OKR sets in the next step. These can then be helpful in sorting the measures to be developed into the fields of action and placing them on a 3-month track. Such implementation is usually more profitable. If all this is taken into account, the OKRs can be used to build a bridge that leads from the target image to the fields of action. This results in concrete and targeted measures that can be planned with adequate use of resources.

Cascading of the OKRs

The success of the strategy often lies in introducing cascading from the corporate level to business areas. Depending on the size and complexity of a company, this is a very difficult undertaking that can often only be implemented with software support. In terms of content management, however, it can work via OKRs. Here, particular attention is paid to transparency: you not only look at which measures are to be implemented in which time horizon, but also what contribution you want to make, what effect is to be generated and what goals are being pursued.

Agile strategy process through OKRs

It is often described that more agility is needed in the strategy process. This is where the greatest benefit of OKRs lies, alongside the creation of meaning and consistent follow-up. On the one hand, they create transparency and commitment; on the other hand, it is an advantage to have a certain degree of flexibility. You have a different steering body and the opportunity to adapt and change things without having to change the entire strategy. It is important to review the strategy every three months and take a look: How far have we come in achieving our goals? Are the targets set still the right ones or do they need to be adjusted? This consistent, institutionalized adjustment and review of the OKRs through the meeting routines creates a nice strength in the pursuit of objectives and the implementation of the strategy. This is how you get the strategy horsepower on the implementation road.

OKRs also give those involved space. In the target areas, which were developed top-down 60% and 40% bottom-up and agreed jointly in the team and at individual level, a very binding joint system is created. It is therefore important that this target system also creates transparency for everyone. This means that everyone knows the goals of their colleagues, which also contribute to achieving a common team goal. If everyone is only pursuing individual goals that are not related to each other, then you have to ask yourself whether this is the right way to implement them and can move the company forward. The strength lies in the team. For example, you need resources from the IT team to drive digitalization forward. You can do as much as you like in your own department if one business area is not included in the support objectives. Problems then arise with the allocation of resources. OKRs also help with the use of resources, as you no longer get lost in the "small details" of the measures, but instead record the value contribution of the individual measures and check their usefulness and contribution to the strategy.

Feel free to send us your specific questions about OKRs

You don't need a strategy process to lead in a goal-oriented manner and work together on OKRs. Of course, OKRs can also be established separately from the strategy process. The only important thing is that there is still a mission statement, a vision or a strategy so that your team can better implement the follow-up of this given objective or expectation from your higher-level management body.

We are happy to support you and help you to adapt the concept for you in the OKR language jungle in such a way that you and your team can best create a vision for the concrete implementation of your goals.

Contact:

Christian UnderwoodManaging Partner E-Mail: christian@strategy-frame.com