In real life, the strategy is actually very straightforward. You pick a general direction and implement like hell. ―Jack Welch
Strategic planning involves tedious preparation – poring over spreadsheets, designing surveys, revising the agenda for maximum engagement, and usually, planning logistics for an “offsite” as well.
Then we have the planning sessions themselves – prior period reviews, brainstorming for great ideas, setting targets, identifying focus areas, and the like. There are mind-numbing debates relieved by moments of clarity and unanimity (between our partners we have conducted such sessions for over two-dozen industries). Finally, it is time for fun and games, followed by the team dinner.
All this investment makes strategic planning meetings the most involved and expensive team meetings in most organizations, in the entire year. And there is a LOT riding on it.
So, our question to business managers is simple – Planning is over. It is Monday morning now. What are you going to do?
Most managers, who are otherwise quite satisfied with their organization’s planning process, are left puzzled by this question. This question, though, is perhaps the easiest way to expose the Strategy–Execution Gap in organizations, big and small. It arises because managers treat the planning process as an intellectual exercise dealing with a broader vision, out-of-the-box ideas, and perfect solutions to hypothetical situations, to deliver thoughtful strategic plans. Then, the next week, they are back “inside the box”, focused on operating results.
A good strategy isn’t easy, of course. But the bigger problem plaguing most organizations is not a lack of strategy. It is a weak strategic execution.
OKRs (Objectives and Key Results) can change that. With their roots in MBO (Management By Objectives) – a theory forwarded by Peter Drucker – OKR playbooks have become a standard operating practice for noteworthy organizations like Google, Uber, Gates Foundation, Netflix, General Electric, Deloitte, U.S. Navy, and many others.
At the end of the planning exercise, well-written Objectives, like all good strategy, capture what gives an organization an advantage over its peers. Basically, answer the two immortal questions:
- Where to play?
- How to win?
Key Results identify what must be done to accomplish the Objective. KRs – are specific. The more pointed they are, the easier it is for the organization to understand them and track results. If a KR doesn’t have a number, it has little value.
Here is an example of an OKR at the culmination of a planning cycle (we have adapted an example from whatmatters.com).
First, let’s set an objective: “to build Hawaii’s tallest building.” The tallest building in Hawaii is the First Hawaiian Center in downtown Honolulu, so to achieve our objective, the building we are constructing needs to be taller.
Our first key result would be: “building is taller than 429 feet.” To ensure our project moves on time, we add more key results: “building plans to be complete by November 2019”, etc.
When written out, our OKRs would look something like this:
O: To build Hawaii’s tallest building
KR 1: Building is taller than 429 feet
KR 2: Building plans to be complete by November 2019
KR 3: Construction begins by December 2019
KR 4: Building opens by January 2022
OKRs can be nested. While top-level Objectives remain broad, child-level OKRs become the responsibility of departments. This nesting allows for the entire organization to shift its resources and be in lock-step to achieve big strategic goals. KRs that prove to be unsuccessful are eliminated and replaced, providing agility to achieve the identified Objectives in the face of shifting realities.
OKRs can energize the entire organization, unleashing its potential and creating real competitive advantage. And yes, they do tell you where to focus on Monday mornings.
Partners at GUILD Consulting can help you translate your strategy into OKRs. Email us at [email protected] or call (808) 729-5850.