Let’s imagine your business needs a new strategy…
Time for some fresh and innovative thinking. So you and your team head off to a nice hotel and work tirelessly to imagine and strategise a better future for the business.
It was hard work but eventually, you agree a strategy that all the Exec team can stand behind. You had arguments and some very frank discussions in the process, but you got there. This strategy will transform the business. It is a work of genius. The future looks bright and profitable.
Now all you have to do is communicate your magnum opus to everyone in the company and success is inevitable. They will get it straight away and be energised and excited about making it happen. Right?
Wrong. Strategy formulation is not the most important thing business leaders need to do. Strategy implementation trumps formulation every time.
Why we love OKRs
This is why we are so passionate about OKRs. They don’t make strategy execution easy, but they do make it happen. When progress is regularly being measured against agreed key results, this discipline impacts the business in three important ways.
Cross functional co-operation
Let’s look at the first impact, strategy validation:
If there is a problem with the strategy we want to discover it quickly. No point spending valuable time and resources on doing the wrong thing.
An effective business strategy needs to be dynamic so they can exploit new opportunities and react to changing market conditions. I’m trying to avoid the word ‘agile’ as it is so overused to the point of becoming meaningless, however, it is worth thinking about where the term came from.
Agile is a project management approach that challenged the previously dominant methodology of ‘waterfall’. Project managers realised that small sprints undertaken by multi-disciplinary teams kept products and services aligned to customers needs.
Effective strategy execution does not mean slavishly following the plan, it also needs to be ‘agile’. Adjustments need to be done in real-time. Implemented correctly, OKRs embed this way of working into how businesses function. In our experience ‘waterfall’ strategies are rarely validated and struggle to survive the first quarter of execution.
Impacts 2 and 3 are closely linked:
For strategies to be effective people need to work together across all departments, teams, geographies and business areas. Everyone needs to take ownership of their tasks and welcome being accountable for making them happen.
If you are fighting siloed thinking within your organisation then it will be almost impossible to deliver on the objectives detailed in your hard-fought strategic planning document.
The plan may contain all the who, what’s, why’s and when’s and your resource planning and forecasting are no doubt meticulous. All this good thinking, however, will swiftly unravel unless people embrace the concept of working cross-functionally and being accountable for the outcomes necessary to deliver the plan.
To emphasise this point a recent paper released by the Harvard Business Review looked at the negative impact on strategy resulting from managers not being held accountable to one another.
“When managers cannot rely on colleagues in other functions and units, they compensate with a host of dysfunctional behaviours that undermine execution: They duplicate effort, let promises to customers slip, delay their deliverables, or pass up attractive opportunities.”
If this sounds familiar or just a bit frightening then it is time to look closely at OKRs and how they could positively impact on how you implement your strategic plans.