OKR Check-ins: Making Consistent, Meaningful Progress

Uncertainty

Photo by Aarón Blanco Tejedor

People hate uncertainty. Research has proven that people can experience stress and illness when dealing with ambiguity and obscurity. Our brain appreciates certainty the same as food, sex, and social connections. We humans are rather predictable creatures, ruled by genetics and time-honoured survival mechanisms. There are few things that give us more satisfaction than having a firm sense of control over our environment, safety, and working towards a goal (acting with purpose). In a word, progress. Only above that, making progress in meaningful work where even a small win can defeat multiple losses. However, over the course of a day, week or month, if we consistently have a sense of overwhelming defeat, then a win of any magnitude will lose its power. The best antidote to this: a clear plan of action and a methodology to track progress. Without these things, we feel unhinged, we lose track of our progress (and purpose!) and worse yet, our motivations quickly dwindle as we spin-out into doubt, insecurity and deeply rooted discomfort.

Why Goals Alone Aren’t Enough

While goal-setting reduces uncertainty, a vague goal can still have just as much of a negative, undesired impact as no goal (or objective) at all. The common questions raised when an unclear goal is introduced are predictable: But how? What needs to get done and in what order? How will we know if we are on track? What’s the timeline? Who will do what? This is the reason why effective goals contain measurable and appropriate metrics.

In a modern, digital age, with access to technology, apps, and boatloads of information at our fingertips at any given moment, it is likely that you have heard of “the addiction to busyness”. Spinning our wheels, distracted by a constant flow of digital notifications, and the perception that the busier we are, while being pulled in every direction, the more effective we must be! Jocelyn K. Glei is a writer and also the creator of RESET and of the podcast Hurry Slowly. In her writing, she notes that “we work tirelessly but rarely feel like we’re accomplishing anything of import. What’s wrong?’ She introduces some key factors that maintain the status quo:

• Addiction to meaningless progress;

• Failure to define meaningful goals;

• The lack of a method for tracking our progress.

That is why I like to work with OKRs in most of my client engagements. With OKRs, you can overcome the tragic story of “status quo” working habits and replace that with measurables; tracked progress that moves clearly and with purpose towards a goal that represents conquering a real problem or issue.

In the experience of making progress, our bodies release the feel-good hormone, dopamine, which makes us feel happiness, contentment and even joy. We are motivated by our wins, regardless of how minor the milestone, to continue on in our pursuit of satisfying performance and enjoying the results. The effects of that hormone are also addictive, so as you are crossing off items on your To Do List by charting out your goals (Objectives) with dedicated indicators (Key Results) on how you will know if you’re on your way to achievement while also measuring your headway on a regular basis (Check-Ins), you can enjoy visually tracking your baby steps and also gather the momentum to continue on.

Now, ask yourself this: What if your whole company was doing this? What would or could that look like? Put simply: You would get one big, happy workforce.

Let’s explore the power of progress.

Making Headway

“The power of progress is fundamental to human nature, but few managers understand it or know how to leverage progress to boost motivation” wrote Teresa Amabile and Steven J. Kramer in their Harvard Business Review article titled The Power of Small Wins. They continue, “In fact, work motivation has been a subject of long-standing debate. In a survey asking about the keys to motivating workers, we found that some managers ranked recognition for good work as most important, while others put more stock in tangible incentives. Some focused on the value of interpersonal support, while still others thought clear goals were the answer. Interestingly, very few of our surveyed managers ranked progress first.”

For OKR check-ins, this reflects a very real misconception between what factors managers perceive as being effective, and which actually satisfy the very real human desire in all of us for advancement, development and growth. In the personal sphere, we feel rewarded when we have met a goal; in the business world, we feel rewarded when, likewise through discipline and commitment, we have seen a project come full circle. In our personal lives, we track progress with apps that keep track our fitness progress, sleep rhythms, and even time spent meditating. In the business world, we do this through daily, weekly and quarterly check-ins that set the tone and pace based on confidence scores.

Progress Takes Priority

In a 1968 issue of Harvard Business Review, Frederick Herzberg published a now-classic article titled “One More Time: How Do You Motivate Employees?” The findings of today, more than 50 years later, are consistent with his message: People are most satisfied with their jobs (and therefore most motivated) when those jobs give them the opportunity to experience achievement.

Looking back at the research of Amabile and Kramer, who reviewed diary entries of more than 230 employees from seven different companies, pouring over more than 12,000 diary entries of workday highs and lows, what they uncovered as the underlying mechanism of a sense of achievement, taking priority over recognition for good work, incentives, and interpersonal support (and by this point, their conclusion should come as no surprise to you): making consistent, meaningful progress.

The Progress Loop

Like most things, we find that our lives have a cyclical pattern. Day in and day out, we are working or thinking about work related matters; this behaviour is influenced by and influences our performance, in a cycle, or loop. A “good day” (or bad day or mediocre day) where we feel satisfied (or dissatisfied or ambivalent), drives our performance which gives a new set of results which in turn has the power to enhance (or diminish, or otherwise impact) our work life; this reveals the potential for self-reinforcing benefits. Basically, the “self-fulfilling prophecy” where our thoughts and beliefs impact our actions which in turn enforce our beliefs and then actions, and so on.

So, in relation to OKR check-ins, the concept of progress is illustrated nicely by the words of Amabile and Kramer: “By supporting people and their daily progress in meaningful work, managers improve not only the inner work lives of their employees but also the organization’s long-term performance, which enhances inner work life even more.”

Weekly OKR Check-ins

If facilitating consistent progress is the key to good performance, then why is it that most managers don’t set a constructive progress loop in motion? Well, mainly because it requires a significant shift in behavior but also because most companies lack a method for tracking progress towards meaningful goals. Most organizations have by now adopted a KPI system, but that isn’t enough. This is where OKR check-ins come into play, the most underestimated tool within the OKR tool-suite.

OKR check-ins are your “sanity check”. Without them, OKRs are almost certainly doomed to failure. As mentioned above, consistency and discipline are vital: Check-ins are usually held at the beginning of the week, every week (Monday morning is a great time) and last ideally 15 to 30 minutes max. In the OKR world, we called this a weekly cadence and it is very important for a successful OKR implementation. If the check-in falls on a public holiday, postpone it by a day, but it needs to occur. This is your team’s most important meeting from now on and you (and other leaders) need to be there to help the team to take action.

The participants of the weekly check-in are typically all members of a cross-functional team or department. Everybody in the team or department needs to attend – no exceptions, no skipping. If your department has 120 people, find a place where everybody can see, hear and chime in. For virtual teams, Google Hangout or Zoom can work.

Weekly Check-in Agenda

Photo by Belinda Fewings

The agenda of the OKR check-in will let teams show and track progress towards their key results. An example agenda can look like this:

• Good news, celebration, appreciation

• OKRs, Look at previous commitments to “move the needle” and provide confidence scores.

• Customer/client and employee feedback.

• Go over the health metrics of your team and company (for example, KPIs)

• Tap into the Collective Intelligence to generate ideas on how to create headway – the key results – this week. Track progress on running initiatives and make new commitments. Limit the number of topics you discuss. A skilled facilitator can help here.

• Who, What, When summary. Describe who will take up which action items and record the results.

• One-phrase close. Wish everybody a nice week. Use some motivational language here.

Daily OKR Check-ins

Are you crazy? Daily check-ins? Most successful teams I know like to do a daily 10-minute check-in in addition to the weekly check-ins. Maybe you are familiar with the daily huddle or daily stand-up from Scrum. The concept of a daily meeting is used in all sorts of industries. A recent case study in the Rotterdam Eye Hospital in the Netherlands revealed improved patient safety by having a regular 10 minute team meeting every day. The goal of the daily check-in is to craft a plan for the day.

A crucial element of daily OKR check-ins are the daily metrics and they are what will set this kind of activity apart from a status meeting. In status meetings, when you huddle with your team, people tend to look at the past (yesterday I did this or that). OKR check-ins look at the present (the next 24 hours). Defining daily team metrics is an art but so critical for any high-performing team and organization. If you can track progress on a daily basis towards your key results, the objectives seemingly fall into place, and you can enjoy the added benefit of increased performance and enhanced inner work life.

Daily Check-in Agenda

The daily check-in needs to happen at a fixed time every day. This will ensure the meeting becomes habitual. The agenda of a daily OKR check-in can look like this:

• Goals of today. What is it you want to achieve at the end of today? What is the #1 priority?

• The key results of today. Can we give a confidence score for each? Can we move the needle on the key results today? If you use quota or activity metrics in your KRs, what do you need to today to make those numbers?

• Hurdles. Are you blocked by anything, anybody? Can someone help you to remove this challenge?

Like with the daily huddle, the daily OKR check-in needs to be a standing meeting because it increases the productivity of the group.

Dull OKR Check-ins

Both weekly and daily OKR check-ins can become dull at times, mainly because “business as usual” kicks-in. It requires some discipline to keep the meetings running with motivation and passion. Dull check-ins will demotivate people and eventually people will abandon their weekly or daily habits and the status quo will win out again.

One of the keys to a successful OKR check-in are good metrics. Good metrics inside your key results will track progress on a daily or weekly basis towards your objective. Try to avoid vanity metrics like Net Promoter Score or Monthly (Recurring) Revenue as the numbers will not be updated on a weekly or daily basis. Also metrics that are not or cannot be influenced by the team will demotivate people. A mixture of outcome, quota and activity metrics is recommended. Finding the perfect metrics truly is an art and developing them requires patience and often the assistance of a certified OKR trainer to help get the ball rolling in the right direction.

Power of OKR Check-Ins

I have seen teams do OKRs check-ins in the past years and the results are remarkable:

• Reduction in uncertainty

• Increase in accountability

• Highly engaged workforce

• Clarity on goals and strategic direction

• Fast feedback and learning (as compared to grading OKRs)

• Seeing meaningful progress for managers and employees alike

Recap

• Uncertainty is the source of deep discomfort

• Progression makes us happy

• Consistent progress enhances inner work life

• Inner work life drives performance

• OKR Check-ins track weekly or daily progress

Could You Use Some Help?

Schedule a free 30-minute chat with me to explore how OKR check-ins can help you achieve remarkable results.

Organisational Culture Shock - Introducing OKRs

Getting Started with OKRs

Photo by Troy Bridges

So, you have recently heard about this new management goal-setting method called OKRs and you are really eager to implement them within your organization. If Google and all of the other big tech giants are using them, then they need to be good right? So, what do you do next? Like with any other management technique, you pour over all of the books, TED talks, podcasts and blog articles you can get your hands on. How hard can it be to implement such a simple tool?

Like with any other big-change initiative, it can be extremely challenging to implement any new changes within an organization and OKRs are no different. If you’ve heard of OKRs, then it’s likely that you have also heard of Change Management. OKRs are a significant cultural shift. Remember the last time your organization tried to adopt Scrum, DevOps, or method ABC? OKRs could be even more of a challenge. Sure, if you are a five-person start-up, things can go fast and smooth with everyone on the same page from the very beginning. If, on the other hand, you are scale-up company or you want to introduce OKRs within a large enterprise, prepare yourself for facing some severe push-back.

Clarity about “The Why”

When you start with OKRs, people within your organization will ask “Why OKRs? Why now? Don’t we have enough on our plate?”. You can’t blame them. It’s a very legitimate question. Do you have an answer? You should!

In fact, you need to be crystal clear why you want to use OKRs. OKRs is first and foremost a tool and, when utilized properly, can solve specific problems. To use an everyday metaphor: if your organisational problems could be materialized as a DIY self-assembly IKEA kitchen for example, OKRs would NOT be a hammer designed for smashing the problems to bits, but rather the multipurpose allen key paired with a clear instruction manual.

Before ushering in change within your organisation, first, be clear with yourself: Do you know what you want to solve with OKRs? Steer clear from ambiguous “goals” such as: increasing alignment, transparency, and focus. Indeed, they are nice added benefits of a successful OKR implementation, but it is your role to paint the picture how OKRs will help solve real, tangible problems that affect everyone. Sit down with a pen and paper and define the objectives, the scope and the advantages (and if you want to be extra prepared, then have solid, honest answers for the naysayers, too, when it comes to what prospective challenges or risks there could be).

Envision the Ideal

Photo by Bjørn Are With Andreassen

How would the world within your organisation look with OKRs, from beginning to end, and how would you get there? What kind of customer or employee behavior is aligned with that vision? What would you expect from your workforce? How would we define the success of OKRs? Devise a plan whereby you can test out OKRs within an isolated environment with a trusted team before you begin describing that vision and behavior or communicating that message to your workforce. This way you can provide some solid results from practical issues, adjust your vision and scope, and have a sketched-out plan for introducing OKRs, what the workforce could expect (how their world would change), and what kind of team(s) would be required., This could, for example, mean choosing to follow the Agile Fluency Model with distinct zones of learning phases that encourage the use of the natural proficiencies of your workforce combined with the desired outcomes. Scroll down for some practical ways a few organisations have tested out OKRs before establishing them as the new normal.

Laying the Groundwork

Repeating the reason why you want to start using OKRs is important, just as important as good preparation (even if during phase one, you are repeating it mainly for yourself). For example, without a well-defined mission, vision and strategy, OKRs will not work. OKRs need to connect to them. If there is nothing to connect with, the whole exercise will become obsolete.

Today, there is a trend to focus only on one key metric for your vision and strategy, for example: northern star metric, BHAG or OMTM. I prefer to use a Single OKR for your vision and strategy because of reasons described by Casey Winters, formerly Growth at Pinterest. (TL;DR: you need multiple perspectives which is possible by having 3 to 4 KRs). Make sure you have your mission, vision and strategy defined before starting with your tactical OKR cycles.

Other things that need to be arranged before you can start are: an evaluation of current work processes and systems, accurate lists of function profiles and the organizational structure, proficiency overviews and competency development. A suitable OKR training session or workshop from a skilled OKR trainer will definitely help to up your OKR skill sets within your organization. Are there other things that can also be arranged within your organization to support OKRs?

Emotional Management

Introducing OKRs requires significant change in employee behavior and an even bigger change in your workplace culture. OKRs require people to change both their way of thinking and their way of working (which is their own invented, time-tested, most-efficient method for them, not necessarily for the business). What you are asking from people isn’t something small. Implementing OKRs isn’t a project that you do. It’s how you and everybody in the organization are going to do work from now on.

To get people out of their comfort zone – that is to say, to change their behavior – you need to have a strong incentive. Without this, your OKR implementation will undoubtedly fail. The ‘why’, as described above, will give you some guidance. For example: “Our financial market gets disrupted by Fintech companies. If we don’t work differently, we will soon go out of business”. People need to feel the urgency. This requires from Senior Management that they increase the emotional temperature in order to kickstart this behavioral change, otherwise nothing will change at all.

Problematic Patterns

Photo by Andrew Ridley

For OKRs to flourish, existing cultural and operational patterns of the organization need to be upgraded. If all existing patterns remain, then the organization will simply do more of the same (with the same subpar results). Even with OKRs in place, I have still come across organizations with siloed departments, misaligned teams, low employee engagement, even lower commitment and little-to-no innovation.

If you have seen the attempted implementation of Scrum or DevOps to become more “Agile” and it failed miserably, then why do you believe OKRs will work? If change initiatives fail within your organization, then there might be a structural problem; a pattern. Evaluate the roadblocks and fix those first before starting to implement OKRs.

The most successful OKR implementations I’ve seen are within organizations that are already fluent in Agile practices. That doesn’t mean your organization won’t be successful in implementing OKRs, it just requires a momentus upfront investment from Senior Management.
Intensive investment in:

• Team development and work process design;

• Accepted lowered productivity during technical skill development;

• Social capital expended on moving business decisions and expertise into the team;

• Time and risk in developing new approaches to managing the organization.

Scope of change

To increase the likelihood that OKRs will truly launch within your organization, you should try to reduce the scope of the implementation at first. There are a few options but here are some of my favorites that I often recommend to clients:

Company level only
If you’re the leader of a company, on the Board or somehow in charge of the business, you might want to start with OKRs just in your executive team.

Perhaps start by just setting a strategic OKR and/or only using them on a quarterly basis. Don’t announce or distribute the OKRs just yet. Try using them within your C-team for a few OKR cycles first. If they work for your team, you can present your learnings and insights to the rest of the organization. Leading by example is a management technique I favour and always recommend to my clients (test driving first also means your talking from experience, not theory).

OKR Pilot
Start an OKR pilot project. Use a cross-functional team or department as your test group.

When OKRs start to bear fruit, you can use this group as an example to other teams and departments. Alternatively, you can wait until other managers spot the team’s superior performance and use this as the trigger to experiment with OKRs at higher levels within your organization (hopefully now with those managers’ buy-in).

Tips to get you started

Start with WHY and think about what problem(s) OKRs can solve for you
Prepare yourself before you start with OKRs, considering the HOW
Describe the urgency for this change to kickstart behavioral change
Accept that OKRs are a significant cultural shift that will be met with resistance
Find out which patterns in your organization need to change. For example, becoming fluent in Agile helps with implementing OKRs.
Test out and adjust your scope

You could use some help

Schedule a free 30-minute chat with me to explore how I can help you to start with OKRs.

Slingshot your OKR success

Last week I was a guest in the Fit Bots webinar where I talked about “Slingshot your OKR Success”. In the end, there was also time for me to answer some questions regarding OKRs. No worries if you missed it, the talk is recorded.

If you cannot watch the whole video, the key implementation tips to slingshot your OKRs success are:

• Mission, vision & strategy are clearly defined

• “Introduce OKRs as a vegetable” ~Henrik-Jan van der Pol (Perdoo)

• Don’t overstretch in the first cycles

• Patience

• OKR Life-cycle

• Iterate and learn

You could use some help

Schedule a free 30-minute chat with me to explore how I can help you to start with OKRs.

Getting the Grade: Tracking OKR & Confidence Levels

Time Travel

Photo by Chris Gilbert

Travel back in time with me for a moment. It’s New Year's Eve and you are watching the fireworks in the sky with your friends. You are holding a glass of champagne in your hand and making some promises to your friends.  “This year I’ll quit smoking”, one friend says. Another promises aloud: “I’ll go to the gym more regularly”. You chime in with “I will get out there more, go to networking events”. These are all very nice New Year's resolutions (or goals you might call them any other time of the year), but there is a problem with them.

Let’s use the fitness goal as an example. What will happen in the upcoming months is likely the following: In the first month, your friend will be really committed to going to the gym. She will probably go three times per week. In the second month, she might skip a session here or there. By the time it is March or April, spring is just around the corner and she will give into temptation more and more, joining her friends on the terrace for a glass of wine or two in the sun. She will lose track of her goal and, halfway through the year, she probably won’t show up at the gym anymore at all.

Daily Grind

I frequently see the same problems with businesses. At the beginning of every fiscal year, the management team sets goals. Then at the end of the year, they notice that only a few goals have been met, or worse, none. This also counts for business that do 5 year or 10 year plans as well; without an accountability plan, it will be just more of the same slogging through the workday.

The reason that we can’t seem to ever achieve New Year’s resolutions is because we are too busy getting distracted the whole time. From our mobile phone message alerts, Facebook, Instagram, and even Linkedin to our ever-growing email inboxes. At work, these distractions manifest themselves as typical, standard daily work: meetings, delegating tasks, multitasking, training the new team member, prioritizing which fires to put out first, filing reports and other acceptable “business as usual” tasks.

Don’t get me wrong, the daily tedious work we do is important to do in order to do business, but in order to stay in business, it takes a whole other skill set: Taking the lead rather than constant reacting. This is where OKRs come in. They can guide questions such as: Where do we want to be in X years? How do we get there? What is the plan? What are the Objectives? What are some ways we can identify that we are on track (Key Results)? How often will we check in? What system will we use to measure or keep accountable?

The Enemy

The enemy of taking the lead is called “the whirlwind” or “business as usual”. It pulls at us like a gravitational force. We get distracted by it every time and it prevents us from achieving our goals. It’s totally normal, everybody has a Shiny Object Syndrome (S.O.S) to some extent.

The same is true when companies start with Objective and Key Results (OKRs). With good intentions and motivations, they start to implement them. At the beginning of the year, strategic and tactical goals for the quarter are formulated. For each Objective, perhaps there will be three to four Key Results. Then at the end of the first quarter, management or teams begin to notice that very little or nothing has yet been accomplished. They might continue along this path for another quarter, but most probably will abandon OKRs and switch back to the status quo. I can’t blame them, it is a logical response to the well-meant implementation of a system designed to keep us on track and accountable, but (similar to the gym) without discipline and seeing some motivating results, the desire to continue diminishes amongst the firefighting of “business as usual” and instead is seen as just a waste of time. So, how can we curb these distractions and get back on track?

Getting the Grade

Photo by Ben Mullins

While there are many reasons why OKR implementations fail, a common one is that companies and teams don’t evaluate their OKRs, let alone their OKR process. For this reason, the process of “grading” OKRs is now a quintessential part of growth. Think of it like going back to High School where grades are assigned to our quizzes, tests, essays and group projects (Key Results) and the end of each semester (or in business, per quarter). Some companies grade their KRs mid-quarter. In the end, grading can be seen as a learning tool. There are a number of methods for grading (or scoring) Key Results and the selected methodology of scoring criteria needs to be clearly communicated to the team early on, along with the format of the regular check-ins. The grades you assign indicate how well you have achieved your Key Results. It’s a great way to keep you and your team on track and focused. It also helps to mediate distractions and with prioritizing tasks, too, but it’s not enough. We need a tool to help us learn faster and avoid distractions even more.

Quick Learner

Although there is nothing wrong with the grading technique in general, there is a problem if organizations only use this technique in their OKR toolbox. The problem is that by the time you are at the end of the quarter, you have already been distracted too much by the “whirlwind” and have missed a lot of learning and pivoting opportunities, making it in turn, extra tricky to plan and prepare for the upcoming quarter(s); it’s naive to only learn at the end of each quarter. You want to incorporate a culture of continuous learning to achieve ambitious goals. Going back to the gym scenario, this would look like small, incremental revisions and improvements and making necessary adjustments along the way. Just like slimming down or becoming more toned, it might be hard to notice the small changes, but over time, those small accomplishments add up to big results.

In today’s fast-paced world, it’s all about how to outperform your competitors in the field of speed of learning. This is, of course, in perfect harmony with the mindset behind Agile. To learn faster, you want to apply rapid feedback loops. Within the OKR framework, these can be achieved with weekly OKR check-ins (in combination with quarterly grading). OKR check-ins are the operating system to achieve your goals. Without them, you decrease the likelihood of achieving your OKRs. One of the elements of OKR check-ins is Confidence Scoring.

Confidence is Key

In comparison to grading Key Results, scoring Confidence in achieving them is even easier. You can use a colour coding system such as Andon System (red, amber, green) or any scale to set the level of confidence that you have in a Key Result. At the beginning of each OKR cycle (typically quarterly) all KRs start at amber (50%). Then on a weekly basis, a (executive) team rates the Confidence they have in each Key Result.

Green indicates: we are sure we are going to make it because the current metrics look good. The needle is moving steadily.

Amber signifies: there is a 50/50 chance we are going to make it. The current metrics are behind. The needle is moving slowly.

Red means: we are way off the mark. The needle hasn’t moved an inch. We need to take serious actions or re-visit our tactics.

With that said, sometimes all the Confidence in the world won’t be an automatic success indicator of a Key Result being achieved. Sometimes things happen that couldn’t have been predicted or avoided. Checking in on a weekly basis (as well as quarterly) can be one of the best uses of your time, not only in terms of accountability, but as a way to forecast for the future, especially when something didn’t go as planned or wasn’t accomplished or fell by the wayside. For a team, with each team member weighing in and giving input, lessons can also be gleaned from these measurable experiences and the team can refocus. Why did we think we were on track and where did it go wrong? How can we prepare for something like this again in the future? What were the important considerations that we missed?

Fast Feedback

If you score your level of Confidence in your Key Results on a weekly basis, you can be certain that you will get a lot more feedback from the system (executive colleagues, business partners and team members) regarding small adjustments, pivoting and learning than you would have with only grading OKRs at the end of the quarter. Weekly scoring of your Confidence on your KRs helps you and your team make better and quicker decisions. It will reflect a plan with milestones and regular check-ins that will not only instill confidence in the progress of KRs, but also put meaning to the “business as usual” work of your team.

Summary

Weekly and Quarterly check-ins will keep Key Results on track
Select the best method of grading Key Results that suit your team
Regular Confidence Scoring can help you pivot in the short-term and forecast for the long-term

Haven’t You Heard?

Check out my talk at the IT Spring Conference to learn more about OKR check-ins and subscribe to my free OKR email course to keep yourself regularly updated, inspired and on track.

IT Spring 2019 - OKR Commitment square

Check out my talk at IT Spring 2019. In this presentation, I talk about how to use OKRs for strategy and how to use a tool called the OKR commitment square to execute your OKR check-ins.

Clarity with a single OKR

“Focus is the thing that makes the difference between excelling and flailing about in mediocrity” ~ Christina Wodtke.

The problem (and it’s a big one…)

Photo by Paul Skorupskas

Research has found that “on average, 95% of a company’s employees are unaware of, or do not understand, its strategy”1, and two-thirds of managers can’t name their company’s priorities2. And if your people don’t understand your strategy, how can they execute it?

As a result, the following are true of too many organisations (you may recognise a few):

• Your OHI3 or similar employee survey results indicate a lack of clear direction;

• Employees say they miss clarity and focus, and don’t know where the company is going;

• Lack of purpose makes employees less motivated;

• There are little or no innovation or learning initiatives going on;

• Repeated change initiatives fail;

• Too many, constantly changing, priority projects distract people from the strategy;

• Too many ad hoc issues and too much firefighting.

But we’ve told them the strategy time and again…

If you’ve had your strategy for some time now, you’ve almost certainly communicated it to employees many times via various different channels. So how the heck can they not know about it, let alone understand it? Why, despite your efforts, do you see so little progress on this front?

Various studies4 suggest that unclear direction and lack of purpose are often major culprits. Worker performance tends to improve when the employer commits to a single strategic goal. Moreover, when each employee is set specific, relatively demanding goals they become more committed to achieving them5.

According to Google research6, who the members of a team are is not the key issue. Instead, they found that their most successful teams shared four key attributes:

• Psychological safety: people felt safe and empowered to take (appropriate) risks;

• Dependability: they could rely on one another to deliver timely, quality work;

• Clarity: goals, roles and execution plans were clear;

• Meaningfulness: people felt they were working on something that was important to them and mattered in some wider or more fundamental sense.

But how do you get to this point? I believe a tool called OKRs (Objectives and Key Results) can help you clarify, focus and communicate your strategy – and if used properly, with amazing results. Giving your people the clear goals, purpose and meaning that will improve company performance. But first we need to go back to the beginning.

What is your strategy, actually?

In my experience, when you ask a leader for their current strategy, responses typically fall into three categories:

• “We don’t have a real strategy” – honest, but hardly reassuring.

• “We’re doing/aiming to do X”. Where ‘X’ can be anything from “move to the public cloud” to “transition to agile” to “launch a new product”. These may be useful things to do, but they’re not a strategy.

• Ten fluffy rambling sentences that no one (including the leader themselves) can quite remember. So no surprise the ‘strategy’ isn’t having the desired impact.

As Porter says, a “competitive strategy is about being different, it means deliberately choosing a different set of activities to deliver a unique mix of value.”7 This also means saying no to a lot of things. In other words:

Business Strategy = Choice

Short and sweet

The best strategy statements fit on a single page. In his book Scaling Up, Verne Harnish suggests several strategy one-pagers. You can also look at Business Model Canvas or Lean Canvas. All cover the basic elements of a strategy:

• Objective

• Scope

• Advantage

So let’s explore each of these a little further.

Define your objective

According to Collis and Rukstad, “it is the single precise objective that will drive the business over the next five years or so”8. In other words, you need to make your strategy tangible: define a clear finish line, which can be defined as an objective. An objective shouldn’t be too easy to reach, nor should it be so hard people feel it’s impossible9. Ideally, you want a 50% chance of achieving it.10

In addition, the objective must be emotionally motivated and trackable. Emotionally motivated because not everybody likes numbers and this helps keep objectives memorable.11 Trackable because you should be able to report progress against the objectives on a weekly basis. This, as we’ll see, is why OKRs are so powerful in defining strategic objectives.

Define the Scope

There are three dimensions to strategy scope: customer or offering, geographical location and vertical integration. In other words, what you want to ‘sell’ to whom; where you want to sell it; and which components of the value chain you will run. You must create boundaries to make it clear to leaders which activities they should, and shouldn’t, be focusing on. A great tool here is a list of No’s. Or you can just explain why you’re not going to do certain other things.12

Apple, for example, clearly targets high-income customers with high-end priced products. The company chose not to offer low-priced products to customers, although it could have increased market share by doing so.

So in the scope part of your strategy statement, define the decisions you have made.

Defining the Advantage

“The essence of strategy is choosing to perform activities differently than rivals do.”  M. Porter.

Defining the advantage is one of the most important aspects of strategy, but many forget to make it explicit. “Clarity about what makes the firm distinctive is what most helps employees understand how they can contribute to successful execution of its strategy.”13

You need to be very specific about which activities you are going to do differently, and find the right ‘fit’. Let’s take Southwest Airlines as an example. Southwest’s competitive edge derives from a whole range of activities, and ensuring these fit and reinforce one another.

The right strategic fit creates a chain that’s as strong as the strongest link.

Ensuring the right strategic fit prevents imitation by creating a chain that’s as strong as the strongest link. A strong strategy ensures Southwest’s activities complement each other to genuinely add economic value. The cost to the company/value to the customer of one activity is lowered/enhanced by how other activities are carried out. In other words, the strategic fit generates competitive edge and increases profitability.

This combination of closely-linked, mutually-enhancing activities make it difficult for competitors to copy you. Such a set of tightly-linked differentiating activities is also called a ‘strategic theme’. For example, in his paper on strategy Porter lists the strategic themes of IKEA as:

• Limited customer service

• Modular furniture design

• Self-selecting by customers

• Low manufacturing costs

One way to identify the strategic activities you should be doing differently or better than your competitors – your strategic fit – is by using an activity mapping tool15 or strategy map16. But even better is to put it on a one-pager as part of your Business Model Canvas (e.g. resources, channels) or Lean Canvas (Unfair advantage).

Meet your new best friend: OKRs

So we now have great tools for defining our strategy’s scope and advantage, but what about defining our objective? Many organisations, including Google, Intel and LinkedIn, use OKRs (objectives and key results).

OKRs were developed by Andy Gove in the late 1970s to fill the gap between strategic objectives and execution. They are a powerful way to help you define clear finish lines for your strategy and boil your strategy statement down to a succinct one-pager. Let’s have a look at the key elements:

As discussed, an objective is a short, memorable, qualitative description of what you want to achieve.

Key results are a set of metrics and KPIs that measure your progress towards the objective. Research shows the more specific your goals, the better your organization and teams can perform against them.17

A handy rule of thumb: if you can report on the progress towards your objective in a weekly email, then it’s a well-defined key result. If not, try to learn more about your data and metrics: it takes practice and patience. The following formula can help: From [X] to [Y] by [WHEN], where X = your baseline metric and Y = your goal.

Flowing out of the strategic objective there are likely to be various subordinate goals that can serve as useful metrics to monitor progress, and against which individual employees can be held accountable. But there should always be one strategic OKR: a single clear, overarching objective to drive business operations over a number of years.18

And if OKRs seem the basis of a very simple goal-setting system, don’t worry: they are – and that’s their strength!

Strategic OKRs

An objective and its key results can be used to formulate your strategic objective as a strategic OKR, which shouldn’t have a horizon longer than 5 years, or it becomes too abstract. Here’s a couple of examples of Strategic OKRs:

• Youtube: Reach 1 billion hours watch time per day.

• Google Chrome: 20 million weekly active users by year’s end.19

In both cases, the objectives are ambitious, focused and clear. Every employee at Google Chrome or YouTube will instantly understand the strategic direction. To reach that goal, they needed to say ‘no’ to a lot of things, runs tons of experiments, think outside the box and change certain key activities within their business. With a single OKR, everyone can keep their eye on moving the company towards its single overarching goal. Because a well-formulated Single OKR is compact and easy to communicate to employees, it will create strategic clarity20 and a shared vision within teams. Which, according to McKinsey, has a huge positive impact on organizational health, setting the foundations for a high-performing organization21.

WARNING: OKRs are not KPIs!
A classic pitfall is to use OKRs to monitor your KPIs. The balanced scorecard is a perfect tool to monitor your company’s health or the status of competitive activities, but that is not the same as measuring progress towards a single ultimate objective.

Keep it simple: Define a single objective.

Everything should be made as simple as possible, but not simpler. ~ Albert Einstein

If the beauty of OKRs lies in their simplicity, why do we need OKR experts to integrate them into our daily operations, and why do most OKR implementations fail?

Probably because, despite all the warnings, the single objective the company sets itself still isn’t short, clear and/or simple enough. Clarity is more important than a nuanced and detailed description.

With the best intentions, many leaders and employees also tend to set too many goals22. A radical focus requires one single objective23. Leaders are often shocked the first time I ask them to define a single company objective. Common responses include, “We have too many top priorities” or “It’s a balancing act, we need to focus on both topics”. And there’s always the temptation to try to please multiple stakeholders: shareholders, customers, regulators…

And beware: your single goal shouldn’t be multiple goals in disguise. “We want to grow profitably.” sits on the fence: what’s the priority, growth or profitability? Sales, for example, will need to know when deciding how hard ball to play on price24.

Let’s face it, if your company achieved more than two goals last year, it did well. So let’s do the maths: it is said there is an 80% chance of successfully achieving a single goal. So if you have two goals, that means an 80% x 80% = 64% chance of success. And with three goals it’s an 80% x 80% x 80% = 50% chance of successfully achieving the three goals.

Ask the right questions

With goal-setting initiatives, people often ask the wrong questions. If you ask “What’s the most important goal to focus on?” you’ll get different answers from different departments. Quality, digitalization, customer satisfaction, financial stability…

A good OKR is one that can make a real difference within and across your organization. Ask yourself this: If every other area of our operation remained at its current level of performance, which is the one area where change would have the greatest impact? The right answer to that question can drive the behaviour change crucial to achieving your x10 growth, implementing your new organization model, or exploring new markets or business models.

Avoid the dangers

There are dangers involved in goal-setting25, so OKRs must be used with care. You need product-based metrics to ensure you create an environment where people feel psychologically safe26 so teams can fail without fear. People need to learn a lot on the journey to achieving your ambitious strategy. They need to experiment, and mindsets and behaviour sometimes need to change. And all that means you must provide people with an environment in which they can excel.

Initially, don’t make your OKRs too stretched27. Instead define a few small tactical goals. This will create a sense of victory28 for your teams. Setting a single OKR doesn’t mean neglecting daily operations (or business as usual). When running a marathon, you want to keep an eye on your heartbeat, hydration, pace, etc. Similarly, when working towards your OKR, keep an eye on your organization and teams’ health. If your vital systems start to fail, stop, fix them and only then continue.

Frequent communication a must

Defining your single OKR alone isn’t enough. You must also communicate it as often as you can. Repetition is your best friend here. Use town halls, all-hands, weekly emails and any other channels right for your organisation to ensure the message gets through and sticks. In my experience, a weekly communication cadence works best29.

And don’t just communicate your OKR but also the rationale behind it – its scope and the advantage it will bring. Explain the metrics in your key results and update on progress weekly to all employees: where are we now, where do we want to be. Over and over again. I prefer using a company or team’s whiteboard for this, but I’ll save why that is for another post!

Summary

To grow30 and increase employee engagement; to improve organizational agility; to lift company performance or customer satisfaction… In short, whatever your biggest challenge is today, you need to communicate your purpose, vision and strategy with clarity. With clarity and focus your employees can embrace the strategy, thrive in their work, and deliver what you need of them.

OKRs are a great tool as part of your strategy; but only a tool. And as they say, ‘A fool with a tool is still a fool’. However, use OKRs wisely and you’ll achieve great results. Because once you and your employees ‘get’ it, amazing things start to happen. Like that 10x growth, amazing innovation, happier customers and more engaged employees.

So if you want clarity and focus for your people, don’t wait till your next strategy off-site. Start today with a single OKR as part of your strategy statement and communicate progress weekly.

Follow me or get in touch

If you liked this post, subscribe to my free updates on strategy, OKRs, execution and more. And why not schedule a free call with me to see if OKRs could help your company make a step change.

Resources

1. The Office of Strategy Management

2. Two thirds of senior managers can’t name their firms’ top priorities

3. OHI

4. Locke and Latham and Pink D, Drive

5. Setting goals with OKRs

6. Google research

7. What is strategy?

8. Can You Say What Your Strategy Is?

9. Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting

10. Wodtke, Introduction into OKRs

11. Tell Employees What You Want Them to Strive for

12. Can You Say What Your Strategy Is?

13. Can You Say What Your Strategy Is?

14. What Is Strategy

15. What Is Strategy

16. Wikipedia: Strategy Map

17. Goal Setting Theory

18. Can you say what your strategy is

19. You’ll have noticed neither example complies with the advice to exclude numbers from your objective, but in a data-driven culture like Google’s people probably like their numbers.

20. Lean Strategy

21. McKinsey on Organisational Health

22. Shah, Friedman, and Kruglanski (2002), DontSetTooMany

23. Wodtke, Radical Focus and one single objective

24. Harvard Business Review https://hbr.org/2008/04/can-you-say-what-your-strategy-is]

25. Goals Gone Wild

26. Westrum, Google

27. HBR

28. sense of victory

29. Leaders Should Strive for Clarity, Not Transparency and Eight Ways to Communicate Your Strategy More Effectively.

30. Want to drive business growth? Instill a sense of shared purpose
    
    
    

How to run a successful OKR Check-In

Last week Perdoo founder Henrik-Jan van der Pol asked me to describe how teams can run a successful OKR check-in.OKR Check-ins are the key ingredient of any successful OKR implementation. But they are hard to do. You need to run them at least weekly, come well prepared and make sure your team members are committed to executing experiments or the tasks in order to move the needle. A typical OKR check-in agenda looks like this:

• (actuals are updated before the check-in starts)

• 1. Review OKRs and set confidence scores

• 2. Account: report on previous commitments

• 3. Plan: make new commitments

• 4. Clear the path: discuss impediments

• 5. Health: discuss the team health

You can read the whole interview here.

Update: the article is now also translated into Russian. Credits to Natalia Gulchevskaya http://okr-academy.ru/kak-provoidit-uspeshnie-sobrania 

Implementing OKRs: vision of 8 OKR-experts

I was asked to contribute to the after-movie of the Amsterdam OKR forum. Check it out.

Closing the gap between strategy and agile teams – an interview with Bart den Haak

Read my interview with Workpath Magazine on this important topic.

DevOps new?

In this blog, I look at the rich history behind DevOps, which goes back over 200 years.

Actually, it’s two centuries (and arguably two millennia) old. 

Welcome to a new series of blog posts on lean software development. This is a topic very close to my heart. Over the years working as a software developer, architect, consultant and more recently coach, I’ve seen just how much waste there is in our profession. Wasteful software, wasteful development, wasteful processes. And I passionately believe that by drastically reducing that waste we can drive a minor revolution in our industry.

And if you think revolution sounds a bit over-the-top, consider these figures: when properly implemented, a DevOps culture can reduce time-to-market by 400-500% and deliver software within minutes instead of weeks. Turbo-boosting your digital transformation journey. In this first post I trace the origins of lean software development (LSD) from late 1800s right through to ‘DevOps’ today.

You don’t just ‘do’ DevOps

Many of you will be familiar with the 3 DevOps principles (a.k.a. The Three Ways), and some of you probably also know that they’re based on the principles of LSD? In which case, unfortunately, you know a good deal more about the topic than many organisations that claim to be ‘doing’ DevOps. All-too-often, software development teams assume that having a few experts working in the infrastructure domain, or doing their own deployments to production, means they’re doing DevOps. This is, to put it mildly, a misunderstanding.

DevOps is much more than having some ‘operation’ expertise in-house. It’s about having the culture of team cooperation and technical excellence needed to be able to focus on speed and waste elimination. So what exactly are the fundamental principles on which DevOps is built, and where do they originally come from?

The 20th Century: from thinking big to thinking lean

In 1910, legendary car maker, Henry Ford, took manufacturing to another level by championing and refining the assembly line technique of mass production. In fact, his operations were such a step-change in manufacturing efficiency that many historians argue that his methods were a key determining factor in the Allies’ victory in World War II.

Then between 1949 and 1975, the Toyota Production System was developed by Taichii Ohno and Shigeo Shingo, including Lean Manufacturing or ‘Just-in-time’. The principles and behaviors behind TPS are captured in ‘The Toyota Way’. But because a production system can’t be directly applied to product development, Toyota later created Lean Product Development (LPD), based on the same principles.

LPD has been shown to deliver a 10-fold increase in innovation1 and 400-500% increase in the introduction of new products1. There’s no empirical evidence yet confirming that Lean Software Development delivers the same high-efficiency percentage gains, but they likely fall in the same range.

But it was only in 1990 that the terms ‘Lean Thinking’ and ‘Lean’ were introduced when, following an in-depth study of TPS, Womack et al. wrote The Machine that Changed the World. The book became a bestseller and industries across the globe came to recognize the significance of lean production systems.

The start: lean manufacturing

In 1799, the American Eli Whitney (also, incidentally, inventor of the cotton gin, a key breakthrough in the USA’s Industrial Revolution with the tragic side-effect of galvanizing the slave-based cotton industry) adopted and popularized the principle of ‘interchangeable parts’ (though he didn’t invent them: archaeologists have found interchangeable weapon parts from the Punic War waged between Rome and Carthage from 264 to146 BC). As a result, Whitney could provide the US War Dept. with 10,000 muskets for the incredibly low price of $13.40.

Over the years, modifications in the production system by people such as Frederick W. Taylor, Frank and Lillian Gilbreth, and others developed the principle of eliminating waste in manufacturing. And eliminating waste is, of course, one of the core principles of Lean.

7 principles, 3 Ways, 1 foundation

In their 2007 book, Implementing Lean Software Development: From Concept to Cash Mary & Tom Poppendieck2 did a wonderful job of translating TDS to the software development domain, heralding the birth of lean software development. Which brings us back full circle to the ‘Three Ways’3. Because these three principles are based closely on the 7 LSD principles:

• Eliminate waste

• Amplify learning

• Decide as late as possible

• Speed: deliver as fast as possible.

• People: respect for people. One of the key pillars of Lean.

• Build integrity in

• See the whole: refers to systems thinking.

A quick look reveals that ‘the three ways’, from which all DevOps patterns can be derived, map easily onto these 7 LSD principles:

• The First Way: systems thinking can be mapped onto ‘see the whole’ and ‘eliminate waste’ to optimize business value streams.

• The Second Way: amplify feedback loops also maps onto ‘eliminate waste’, as well as ‘decide as late as possible’, ‘deliver as fast as possible’ and ‘build integrity in’.

• The Third Way: culture of continual experimentation and learning clearly maps onto ‘amplify learning’.

The foundation: respect for people

But the foundation underpinning all the principles is ‘respect for people’. Without great teams and great people, you simply can’t implement the others principles. Respect for people also includes fostering a work culture and morale consistent with research into workplace satisfaction and increased motivation, as this will support continuous improvement4.

So next time at the coffee machine someone from another department asks what this new thing ‘DevOps’ is, and your colleague answers it’s all about time-to-market, there’s your chance. To point out that (a) the principles actually go back 200, and arguably even 2000, years and (b) it’s not just about time-to-market. First and foremost, it’s a culture thing. About growing a culture of people- and teams-first. Only then can an organisation hope successfully to implement the principles of lean software development.

References

1. Allen Ward – Lean Product and Process Development Oosterwal, Dantar (January 13, 2010). The Lean Machine. Productivity Press. pp. 237–240. ISBN 978-0814432884.

2. https://www.amazon.com/Implementing-Lean-Software-Development-Addison-Wesley-ebook/dp/B00HNB3VQE/ref=sr_1_2?s=digital-text&ie=UTF8&qid=1492788317&sr=1-2&keywords=lean+software+development

3. http://itrevolution.com/the-three-ways-principles-underpinning-devops/

4. http://less.works/less/principles/continuous-improvement-towards-perfection.html#RespectforPeople