Would you want to miss out on measuring how you are progressing towards your strategic goals?
by Mark McKee, 12 May 2023
The more businesses I see, the broader my understanding of OKRs (objectives and key results) has become. Some businesses rally around them to focus efforts on what is meaningful for the business, and others see them as a fad. A recent client who simply could not get their heads around OKRs, and was unwilling to take the time to discuss objectives and key results, collapsed and was taken over by a rival – a case of gradually, then suddenly. Another client who is taking OKRs very seriously and is communicating them at every level to staff is thriving.
OKRs have been around for some time (see my previous intro about OKRs here): they were developed by Andy Grove at Intel in the 1970s to track goals. Intel has a hugely successful track record. If you bought their stock after they floated in May 1980 at 32 cents, you would have made a 91-fold increase in that holding if you had sold in May 2023 at $30 per share.
Some businesses may be doing well today – I can think of several companies whose stock price has been fairly flat over the past couple of years, but internal morale amongst staff is terrible. It won’t take long for the market to sniff this out and discover that these companies are failing to position themselves for a digital future.
A term that I’ve been using recently with teams I work with is purpose-driven development. We already have test-driven and behaviour-driven development as well-known methods for product teams to improve their quality and time-to-market. The idea behind purpose-driven development is that when teams are aligned to the impact of their work on the key results for each quarter, they can really focus on what moves the needle on a key result (e.g., gain five new customers with our new product by the end of the quarter). When teams know where their efforts fit into the company or divisional strategy, they are much more engaged and motivated. This is in sharp contrast to studies that show actual alignment can be lower than 25% between work and strategy.[1]
I’ve worked closely with teams and leaders that are meeting their strategic goals, as captured in OKRs with the work being done and its impact on those goals. If they aren’t, then they are reflecting on what their impediments are. Those are the firms that are positioned to succeed in the digital age.
Talk to us to find out more about how OKRs can steer your business.
[1] Vikas Mittal, Alessandro Piazza and Ashwin Malshe, Is Your Company as Strategically Aligned as You Think It Is? Harvard Business Review, May 01, 2023 (https://hbr.org/2023/05/is-your-company-as-strategically-aligned-as-you-think-it-is, accessed 11 May 2023).
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