OKRs in Context: Do OKRs co-exist with other methodologies?
One of the first jobs to be done when implementing (or rebooting) OKRs is to identify how they fit into an organization’s existing planning “stack” and get clear about what job they’re being hired to do.
This episode is based on an early version of a chapter from Sara’s upcoming book, You Are A Strategist: Use No-BS Objectives and Key Results to Get Big Things Done, which focuses on what is possible with No-BS OKRs.
You’ll be introduced to the first of three models that Sara uses every day in her work with organizations implementing OKRs: the Connected Strategic® Implementation Stack. You’ll learn about each layer of this stack, how it applies to individual projects and initiatives, why some organizations may struggle with OKRs, and why you don’t necessarily need to have every element in the stack present to be successful.
Today’s episode offers you a chance to reflect on your organization's Strategic Stack, what elements might be most important to prioritize to increase shared meaning and understanding, and what elements you might want to consider adding to increase your organization’s strategic alignment and impact.
Be sure to stay tuned for future episodes on the other two models: Connected Strategy on a Page and OKR Maturity!
Key Points From This Episode:
Why it’s important to identify how OKRs fit into an organization’s existing planning stack.
Three models to consider, starting with the Connected Strategic Implementation Stack.
Unpacking each layer of the stack: strategic input, North Star Metrics, and more.
Some of the typical sources of aversion to OKRs that Sara sees in organizations.
Defining mandatory commits, health watch measures, and stretch goals.
How delivery fits into the Connected Strategic Implementation Stack.
Why you don’t need to tick every box in this stack in order to be successful.
Stay tuned for more on the Connected Strategy on a Page and OKR Maturity models!
Also: don't miss out -- No BS OKRs Annual Reset Edition registration closes on November 5th, so if you'd like help with your 2023 retrospective and 2024 OKR creation, join us for this practical, applied, OKR creation workshop: http://findrc.co/nobsokrs
Links:
EPISODE 13
[INTRODUCTION]
[0:00:05.7] SL: Welcome to the Thinkydoers Podcast. Thinkydoers are those of us drawn to deep work where thinking is working but we don’t stop there. We’re compelled to move the work from incite to idea, through the messy middle to find the courage and confidence to put our thoughts into action. I’m Sara Lobkovich and I’m a Thinkydoer. I’m here to help others find more satisfaction, less frustration, less friction, and more flow in our work. My mission is to help change makers like you, transform our workplaces and world. So, let’s get started.
[DISCUSSION]
[0:00:47.7] SL: All right friends, I am very excited to be here today. We took a little time off from podcast recording so that I could focus on actually finishing the first draft of the book and now, the first full draft is off to the editor. I am going to try and record a few more of the chapters as podcast episodes before we move the book into preview. It will be available as an ebook first in a preview and then I am aiming for a Q1 release in print and with the audiobook version because we are getting a lot of requests for the audiobook version, which is super exciting.
So, today, I am excited to share with you part of chapter three of my upcoming Evolutionary OKR Playbook, and this chapter, I wrestled with whether to record it as a podcast episode or not because it’s really visual. You’ve got to see the framework drawings but I’m going to record this one in video as well. So, I’ll have a video version of this podcast and I’ll show the framework drawings in that video version.
So, if you’d rather listen to this with the framework drawings, you can click on over to thinkydoers.com and we’ll have links to the video itself, we’ll have it on YouTube, we’ll have other places for you to be able to see the video if you prefer but if you want to just listen in, I’ll do my best to make this audio version as comprehensible as possible.
Chapter three is what’s possible with evolutionary 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 OKRs are being hired to do.
In some highly executional organizations, OKRs might be brought in to fill a gap in strategic clarity. OKRs are not a strategy or substitute for a strategy but in the absence of a larger strategy, they may provide clearer expectations than the organizations working toward today and 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 to ensure that our activity is designed to actually achieve that strategy. So, simply put, objectives and key results might 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 the school cycle, in our objectives, and how they’ll quantify whether they’re making the necessary progress or achieving their most important outcomes in our key results.
[0:04:08.1] I work with three different models to help make this make sense. One is the connected strategic implementation stack, two, we work with clients to develop a connected strategy on a page, and then three, I developed an evolutionary OKRs maturity model. The implementation stack is an abstraction of an organization’s full strategy and implementation framework.
It's like a map of the organization's plans and clarity artifacts, ranging from strategy at the top to implementation or delivery at the bottom. The connected strategy on a page is a distillation of an organization's strategy to a single page to serve as a clear and quotient strategic input to OKR creation, and then the maturity model helps diagnose where in the maturity journey a specific organization is and helps them get inspired to move toward a more mature implementation or decide that they’re in the right place for themselves on that maturity spectrum.
We’ll talk first about the connected strategic implementation stack because that puts OKRs in context and the idea for that came from needing a simple way to help clients understand the missing pieces of their existing strategic implementation stack to better asses whether OKRs might be helpful in their situation.
I’ve done video and written walkthroughs of a typical organizational stack that serves as a helpful explainer for why an organization might consider OKRs. You can find that on my YouTube since most organizations have several 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 might have gaps.
[0:06:15.3] So, this is where looking at a picture might be helpful. I’ll include the visuals for this one in the full transcript that you’ll find on the redcurrantco.com blog but you’ll find an easy way to get there from the thinkydoers.com website. We’ll talk through each layer in the stack but in general, our shared strategic artifacts sit at the top.
Our alignment layer including OKRs derive from our strategic artifacts and sit in the middle, and then 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 that need improvement, and then individual goals, our growth and development plans are created with alignment to all of the above.
So, let’s look briefly at each layer of the stack so you can assess which elements might 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 three-to-five-year time horizon, and/or maybe an 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 we exist 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.
Our topline measures are the small number of most important measures that show our progress or success toward our up-line strategic goals. When our toplines are healthy and growing, our north star is healthy and growing and our organization is healthy and growing. I think of those toplines like uber KPIs. They’re like the most important health KPIs.
[0:08:48.4] 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 goal set at the company level has 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.
I have yet to walk into an organization that has all these elements accounted for my arrival but almost every organization I work with ultimately identifies all 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 will quantify organizational health progress and success, and 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 what they call KPIs or key performance indicators, but often, those KPIs are based on what’s possible to measure, not what’s most important, and sometimes their targets and sometimes, not.
I have yet to walk into an organization where people had clarity about which goals were commits: mandatory, must-achieve goals that have to be achieved 100%, and on which we’re not safe to fail 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.
[0:11:19.4] Almost all organizations confuse or conflate the two, calling their alignment layer items stretch goals but then meeting out consequences if the goals aren’t achieved by an arbitrary amount of “enoughness” 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 work with them and have a negative experience.
The damage to psychological safety and trust is swift and long-lasting and may even persist into the person’s future career long after that specific role and organization. In our alignment layer, we get really crisp with words and meanings. Commits are our mandatory, 100%, must-achieve goals and targets on which we’re not safe to fail.
There may be consequences for non-achievement, therefore, the organization must prioritize and support our commits with needed budget capacity and resources. KPIs or key performance indicators are the metrics that we watch to make sure our business is healthy and headed in the right direction.
[BREAK]
[0:12:43.6] SL: 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.
And then 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 learning and improving for the future. We’ll talk more about commits in the key result chapter.
We show them separately in the stack for clarity but many organizations include commits in their key result list and label them accordingly. For now, let’s just say our key results are presumed to be stretch measures on which we’re safe to try and even fail in the pursuit of progress and learning unless they’re labeled clearly 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.
Organizations drawn to OKRs typically recognize planning a “strategy” bottoms 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.
[0:14:39.8] Percent complete is thought of by many as an objective measurement, we see it all the time in key results, but estimating percent complete is rife with cognitive bias. People don’t mean to estimate progress inaccurately. By nature, our estimates are 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, of our up-line OKRs, and people and teams may identify projects that support our strategic priorities and/or our important business as usual workloads.
Projects and initiatives may have their own objective, typically only one but sometimes more if they’re large, and key results identified so that the working team has clarity on what progress and success mean for that workload and to ensure alignment with applying strategic goals and then our activity is planned in the form of project plans 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.
Now, not every organization is going to fully complete their connected strategic stack and that is totally okay. An organization doesn’t need to have every one of these individual boxes present in their approach to strategic implementation 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 would still say the clarity they give their organization by adopting annual company-level OKRs is better than nothing. Your organization's stack may look different than the one that I just described 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, then hopefully the stack idea helps you see some of the clarity gaps that may be harming your progress.
So, this gives you a chance to reflect on your organization's strategic stack, what elements exist today or are easy to decipher from existing artifacts? What elements might be most important to prioritize to finding consistently to increase the shared meaning and understanding, and what elements might be most important to add to increase your organization’s strategic alignment and impact?
[0:18:23.5] All right friends, I’m going to pause right there. We might add follow-up episodes on the connected strategy on a page and the OKR maturity models. So, let me know if those are particular interests. We’re also going to begin mixing in some interview formats with awesome, smart, brilliant Thinkydoers doing amazing things in their fields and in their work, so we’ll be alternating episodes in the near future.
If you’re hearing this on the podcast and you want the earlier, quicker, first-notice view of everything that’s happening and becomes available here at Red Currant Collective and Thinkydoers. You can add yourself to our email newsletter at findrc.co/newsletter, then you’ll get materials like this earlier than the general public, which is awesome because I’d love to hear your feedback sooner so that we can take it into account when we record the podcast episodes that follow.
We are gearing up to deliver our Q4 live workshops, supporting people in creating their OKRs, and what I have in mind for this quarter is a little bit different because it is Q4 and we’re all looking forward to 2024. So, for this upcoming cohort of No BS OKRs, which is probably going to be renamed in the near future to “Creating Evolutionary OKRs” where I have a few more creative ideas that we might call it, the upcoming cohort is going to be designed a little bit differently.
It’s still only one week, so we’ll start and finish in a week. It’s still a limited amount of classroom time. You can complete the course in three 60 or 90-minute segments. There’s an option for more support and office hours than that if you do want more but at a minimum, you can complete it in about three hours over the course of the week, but for this delivery, we’re going to add a little bit of extra support around reflecting on the year that we’re finishing to inform the year that you’re planning going forward.
So, I’ve been calling this internally an “annual reset in a box” but it will be helpful for individuals doing that reflection and look forward as well as organizations and organizational leaders who are doing that look back and look forward to help set 2024 up for success. To join the waitlist for that course or to register once registration is open, which is happening soon, you can go to findrc.co/nobsokrs.
[0:21:12.4] Now, this cohort, we do expect to be a little larger than cohorts in the past. So, for our first 10 registrants, there are a few bonuses to sweeten the deal. If you’re really interested in participating in this cohort and either price is a factor for you or you’d like a little extra one-on-one time, or you’d like a guarantee of a little bit of one-on-one and direct feedback from me, drop me an email at hello@redcurrantco.com.
We’re not going to announce these early bird specials to the full waitlist but we are sharing that invitation with our newsletter subscribers and then with you for listening today. So, if you’re interested in a little bit sweetened deal on the No BS OKRs delivery or an annual reset in a box that we’re going to be hosting in Q4, drop me a message at hello@redcurrantco.com and don’t forget that offer from earlier today.
And don’t forget to reach out to hello@redcurrantco.com if you’re interested in hearing more about that first 10 opportunity for our upcoming No BS OKRs or our annual reset in a box opportunity. You can also remember to find more about that course if you miss the first 10 or if you want to join the waitlist for future courses or sign up if registrations open at findrc.co/nobosokrs.
Thanks so much all, I’ll see you again soon.
[END OF DISCUSSION]
[0:23:00.8] SL: All right, friends, that's it for today. Thank you for joining and listening. I really can't wait to hear from you about what in this episode resonated, where you got stuck or confused, and remember, that's always on me, not you, so I would love to hear your feedback.
Also, don't forget to subscribe to our newsletter at findrc.co/newsletter, or we have a master waitlist at findrc.co/waitlist if you want to receive the one email that includes everything that's about to launch around here, so you can hear about everything happening all at once before the general public.
You'll find a shortcut to the show notes for today's episode via thinkydoers.com. You're always invited to contact me by email. The easiest one to spell is Sara, S-A-R-A@thinkydoers.com. If you have other Thinkydoers in your work world, please pass this episode. We really appreciate your referrals, your mentions, your shares, and your reviews. Thank you for tuning in today, and I look forward to hearing the questions this prompts for you.
[END]