First a quick introduction: I am really blown away by the helpful notes I'm receiving from readers: I sincerely appreciate the time that some of you are taking to help me make this book better (and you definitely are). I've confided in a few folks that feedback and editing can be really challenging for me: something about this rewrite feels like the planets have aligned to yield material that's finally organized enough to yield exactly the right type of feedback for this stage of the book. Since a few readers have asked: mechanically, what you're reading are the first drafts of the final rewrite: the book will receive another professional edit before the eBook version is released, and then another edit before the print versions are final!

Today's section introduces the first of two models that I use every day: The Connected Strategic Implementation Stack; and, next week I'll add the No-BS OKRs Maturity Model.

I hope today's section helps put Objectives and Key Results into clearer context for you; and then next week's chapter lays a firm (bold) foundation for what makes No-BS OKRs different from a "typical" OKR implementation.

Chapter Three: What's possible with No-BS OKRs?

One of the first jobs to be done when implementing (or rebooting) Objectives and Key Results is to identify how OKRs fit into the organization’s existing planning “stack” and get clear about what job they’re being hired to do.

In some highly executional organizations, OKRs may be brought in to fill a gap in strategic clarity. (OKRs are not a strategy or a substitute for strategy; but, in the absence of a larger strategy, they may provide clearer expectations than the organization is working toward today – and I do think some expectation clarity is better than none.)

In most organizations I work with, OKRs have been “hired” to better connect what the organization does to their big picture strategy; and ensure that our activity is designed to support our strategy. Simply: Objectives and Key Results may sit “between” the organization’s (sometimes durable) strategic artifacts and the organization’s initiatives, projects, and work plans. Instead of a free-for-all of activity, where each person or team decides what’s most important to do (often in a silo) to maximize their contribution to the organization’s strategy; OKRs allow leaders and teams to align on the most important directions they’re pursuing in this goal cycle (Objectives) and how they’ll quantify whether they’re making the necessary progress and/or achieving their most important outcomes (Key Results).

I use two different models to help make this make sense when working with clients: The Connected Strategic™ Implementation Stack; and, the No-BS OKRs maturity model. The Stack is an abstraction of an organization’s full strategy and implementation framework; the maturity model helps diagnose where in the maturity journey a specific organization is (and helps inspire them to move toward a more mature implementation).

The Connected Strategic™ Implementation Stack puts OKRs in context

The idea of the Connected Strategic™ Implementation Stack came from needing a simple way to help clients understand the missing pieces of their existing strategic implementation stack, to better assess whether OKRs may be helpful in their situation. I’ve done video and written walk-throughs of a typical organizational “stack” that serves as a helpful explainer for why an organization might consider OKRs; since most have a number of predictable gaps.

Put simply: while not all organizations have every item in this full model specifically present in their organization; most organizations do benefit from externalizing their own strategic stack and assessing where they may have gaps.

A prototypical complete Connected Strategic Implementation Stack might look something like this:

Figure 1: A complete Connected Strategic™ Implementation Stack

We’ll look at each layer of the stack in a moment, but in general:

• Our shared strategic artifacts sit at the top;

• Our alignment layer (including OKRs) derive from our strategic artifacts;

• Our Key Initiatives and activity plans are developed to maximize our achievement on our OKRs (and other critical business-as-usual or run-the-business functions); and

• Individual goals (and growth and development plans) are created with alignment to all of the above.

Now, let’s look briefly at each layer of the stack, so you can assess which elements may be most helpful to prioritize for your organization.

Strategic inputs give us our big picture direction and clarify our shared purpose

At the top of an ideal stack, we have our strategic inputs, in the form of a long-term vision and mission, a strategic plan (often on the 3-5 year time horizon), and/or annual operating plan (for the year). These documents make up our “strategy,” to help achieve our shared understanding of why the organization exists and what the organization exists to achieve.

The next two elements are not present in all organizations, but when they are, they may provide profoundly helpful information to inform our subsequent OKRs. The term “North Star Metric” has been used in a variety of ways by different authors: for my purposes and the type of human impact organizations I primarily work with we define the North Star Metric as the most important non-financial measure of the organization’s success or impact: when that metric is healthy and growing, the organization is healthy and growing. And our topline measures are the small number of most important measures that show our progress and/or success toward our upline strategic goals: when our toplines are healthy and growing, our North Star is healthy and growing, and our organization is healthy and growing.

One of our topline measures may be a financial or revenue health metric: but we resist the common temptation to make our North Star and our topline measures all financial (which is extraordinarily common). All the time, I walk into organizations where the only quantifiable goals set at the company level have to do with revenue and financial metrics: which are important measures of progress and success for an entity, no doubt; but they do little to help us make aligned, cooperative decisions to inform how we go about working to achieve our commercial success.

Figure 2: Strategic inputs

I have yet to walk into an organization that has all of these elements accounted for at my arrival, but almost every organization I work with ultimately identifies all of these strategic inputs by the end of our engagement. Our North Star Metric and topline measures give the organization incredibly valuable direction about what measures matter most for the organization’s success; and can help teams and people set goals that are designed to achieve maximum progress toward those most important measures (instead of ideating based on guessing or mind-reading how the organization ultimately quantifies success and progress in the long term.

Our alignment layer defines how – in the near term – we’ll quantify organizational health, progress, and success

A coherent alignment layer is what’s missing in most organizations. Some organizations have extensive dashboards chock full of metrics (with little actual insight resulting from all that math); and others adopt “KPIs” (but often the KPIs are based on what’s possible to measure, not what’s actually most important; and sometimes they’re targets and sometimes not).

I’ve never walked into an organization where people had clarity about which goals were “commits:” mandatory, must-achieve goals that must be achieved 100%, and on which we are not safe to fail; and which were “stretch,” where we’re stretching ourselves into speculative or uncertain territory and therefore must be safe to try and even fail in the pursuit of progress. Almost all organizations confuse or conflate the two: calling their alignment layer items “stretch goals” but then meting out consequences if the goals are not achieved by an arbitrary amount of “enough-ness,” which is typically not communicated in advance. (This dynamic of experiencing consequences for lack of “enough” achievement on a stretch goal, is one of the largest sources of aversion to OKRs I see among people who’ve worked with them and have had a negative experience. The damage to psychological safety and trust is swift and long-lasting, and may even persist into that person’s future career, long after that specific role and organization.)

Figure 3: Alignment layer

In our alignment layer, we’re really crisp about words and meanings:

• Commits are our mandatory, 100% must-achieve goals or targets, on which we are not safe to fail. There may be consequences for non-achievement: therefore, the organization must prioritize and support our commits with the needed budget and resources.

• KPIs are the metrics that we watch to make sure our business is healthy and headed in the right direction. If an organization had a human body, its blood pressure, pulse, and cholesterol levels might be KPIs if they’re “healthy” and we’re keeping an eye on them to make sure they stay healthy.

• Objectives are our aspirational, inspired, directional statements of intent that describe what’s most important and why it matters for the goal term.

• Key Results are our objectively measurable stretch goals, that describe how we’re currently quantifying our progress and/or success for the sake of achieving our most important outcomes (and learning and improving for the future).

We’ll talk more about “commits” in the Key Result chapter. We show them separately in this stack for clarity; but many organizations include commits in their Key Result lists and label them accordingly. For now it’s enough to say: Our Key Results are presumed to be stretch measures – on which we are safe to try and even fail in the pursuit of progress and learning – unless they are clearly labeled as a “commit.”

Most organizations have an implementation layer already (but often lack strategic alignment)

Many organizations are driven by their implementation layer: they decide first what they plan to do or what their most important initiatives are; and then discuss what results those activities or plans may yield, and that’s the extent of their strategic implementation alignment.

Figure 4: Implementation Layer

Organizations drawn to OKRs typically recognize: planning a “strategy” bottom-up yields a whole lot of activity and may generate some outcomes; but we rarely have much meaningful progress data to actually make business decisions based on since our assessments of progress are almost always estimated as a percentage of activity that’s been completed. “Percentage complete” is thought of by many as an objective measure: but, estimating “percentage complete” is rife with cognitive bias. I was working in strategic implementation with WorkBoard, a leading OKR software platform, when I first heard the term “watermelon metric” to describe the common business phenomenon of having our estimates of completion be “green” all quarter only to wind up “red” on our outcome at the end of the quarter: that metric was green on the outside but red on the inside. People don’t mean to estimate progress inaccurately: by nature, that estimate is subjective, and therefore, can’t be relied upon as we would an objective measure.

So in a full Connected Strategic Stack, we identify:

• Key Initiatives: our most important major workloads that require broad or cross-functional awareness of status and risk that contribute to the achievement of our strategic priorities;

• And teams and people may identify projects that support our strategic priorities (and/or our important business-as-usual workloads);

• Projects and/or Initiatives may have their own Objective (typically one, but sometimes more) and Key Results identified so that the working team has clarity on what progress and success means for that workload (and to ensure alignment with the upline strategic goals;

• And then our activity is planned in the form of project plans and/or sprint plans (in an Agile environment).

• Individual work plans and goals can then be drafted by each person in the organization to give themselves aligned clarity about what’s expected of them; and, to create plans and goals that help them maximally contribute to the organization’s priorities.

A complete Connected Strategic™ Implementation Stack

Not every organization is going to fully complete their Connected Strategic Stack: and that’s okay! An organization does not need to have every one of these individual boxes present in their approach to strategic implantation to be successful. In smaller organizations and those in a very high-change industry or environment, there may naturally be fewer and lighter durable strategic inputs (and some organizations do use annual company-level OKRs as “their strategy,” much to the dismay of business strategists, planners, and OKR experts: but I still say, the clarity they give their organization by adopting annual company-level OKRs is much better than nothing).

And your organization’s Stack may look different than this one. But if you’re considering “hiring” OKRs to do the job of increasing alignment and focus; they’ll do that job better if there are some strategic inputs to help narrow their focus so they’re not just an arbitrarily ideated list of directions and measures. And if the bulk of your focus today is on identifying and quantifying what you’re doing instead of what measurable or quantifiable outcomes are most important to aim for to create the growth, transformation, or innovation your organization depends on real, then hopefully this Stack idea helps you see some of the clarity gaps that may be harming your progress.

Figure 5: A complete Connected Strategic™ Stack

Let’s reflect on your organization’s Strategic Stack:

1. What elements exist today (or are easy to decipher from existing artifacts)?

2. What elements might be most important to prioritize defining consistently, to increase shared meaning and understanding?

3. What elements might be most important to add, to increase your organization’s strategic alignment and impact?

That model is usually a light-bulb moment for people who've worked with OKRs in the past, to see the benefit of actually mapping the strategic implementation change of adding OKRs to an operating model. It's also often helpful for people who have not worked with OKRs to begin to understand the role they may play (or not!) in a given organization.

How about you: Does that make sense? What gaps or logic leaps do you see? Did anything in there stand out to you in a good (or not so good) way?

Drop me a reply with your feedback and thoughts: then I'll look forward to seeing you back next week to look at the No-BS OKRs Maturity Model!