Objective & Key Results (OKR) for Strategy Execution

Strategy Execution is an Alignment, Accountability and Execution problem. And execution is most of the time a definition problem too. If the company is unable to defining WHAT and HOW of WHAT; how you can expect the execution will happen.

Once CEO and board has decided on the next projects and strategic initiatives to be executed, defining exactly WHAT needs to be done and how it can be done properly and the metrics that will help us measure progress isn’t an easy task.  There are many goal-setting/policy deployment frameworks, but Objective & Key Results (OKR) is one of those frameworks which is simple and easy to implement.

OKR(Objective and Key Results) is a management tool that helps you to translate Strategy Into Goals and Metrics. Andy Grove @ Intel first made the twist to MBO methodology and created the OKR framework when Intel was trying to capture the market. In a way, it is a bit less formal than the balanced scorecard and Hoshin Kanri approach, but it is successfully employed at many companies. Google uses it for example.

There are two components to an OKR, an Objective that specifies what needs to be achieved in the medium or longer term, and Key Results: these are specific shorter term actions that we need to take to fulfill that objective. Key results should be measurable. Since they are used to track progress, they should also be time bound.

Let’s look at an example: Suppose we were managers of a retail chain. Our objective is to open five new retail branches in South East Asia by November. To achieve that objective we’ll need to achieve the following key results.

1) Identify the locations for our new retail outlets. This should be completed by August 1st.

2) After we know in which buildings we’d like to open their new retail outlets, we need to draft leasing agreements, and that should be done by September 1st. We want all our retail outlets to have a similar look, so we’ll need to renovate the buildings a little. For example, painting interior, put the company logo on the entrance, and this needs to be completed by October 15th.

3) We’ll also need to hire new people to work in the new retail outlet. Hiring should be done by October 1st, because we’ll also need to give the new staff some training and so on. This should be completed by October 25th.

4) And finally, we’ll need equipment, computers, POS(point-of-sale) machines. This should be purchased and installed also by October 25th. At any point in time, we’re able to tell how we’re moving towards achieving our objective of opening the five retail stores by November. If it’s October 1st and we still don’t have the locations for the new retail outlet, much fewer lease agreements, we’re in trouble.

By contrast, let’s say it’s October 15th and the managers from our Retail company headquarters are calling to check in about progress.
We’ll tell them that the staff has been hired and trained, and the equipment installed. So we’re done, and actually, we’re ahead of schedule.

This way everyone can see how their efforts fit within what the organization as a whole is doing. OKR framework is a simple, yet powerful framework to align and define what and how of execution.

Watch this video by John Doerr, who introduced Objective and Key Results to Google when they were 40 member team.

CEO The New Age Voyager

Launching qilo Navigator!

 

The human race is genetically engineered to explore the new. From, the inception of a wheel to put the man on the moon. Humans have always pushed the boundaries of imagination and possibilities.

Our Hero has always been The Voyagers – who have been driven by passion, grit, and determination to explore the unexplored. Taking a journey involved with risk and possibility on no return. Still, with all the odds stacked against them, they went and explored the world, identified new geographies and made the world connected with various cultures and people.

Today’s CEO’s are no less than a Voyager taking the business to unexplored territories. Navigating odds and challenges every day.

While the destination is crystal clear the path to reach the destination is always challenging. It requires taking quick decision making, directing, aligning and pushing each and every team member to stay on track.

And that’s what inspired us at qilo to empower the CEO (Voyager) with right Navigation instruments to view, if on the right track or not or require a course correction.

Introducing qilo NAVIGATOR For CEO’s to view what’s working and what’s not in their Strategy Execution roadmap!

In your Growth journey of taking your organization from point A to point B, you need qilo NAVIGATOR, ensuring you reach your destination faster!!

AYE AYE CAPTAIN!!

How close is your brand to Consumers?

As a leader you should ask this question, is your brand working hard for you while you are busy making business presentations?

A brand is the sum of experiences you are providing to your consumer in the entire lifecycle. At each stage, there is an expectation from the consumer, if you are meeting 10/10 then you have the consumer as your advocate, if not you may have to struggle to retain your consumer.

India has been a customer acquisition market because of its size and population. We do not take customer engagement seriously, more so when it comes to giving experience. The focus is always been on acquiring, acquiring and acquiring more even if you are unable to give value or service to the consumer.

The mindset has to change. Today the customer is more empowered and has choices if you do not have a secret ingredient – then why should someone buy you? There are more like you in the market. You are just like a commodity and the only differentiator is your pricing and placement, not your brand!!

So what to do? Call your advertising agency- NO! Try this dipstick

Align – Brand journey starts inward outward. Each and every stakeholder in your company from Management, Sales, HR, Finance, IT, Admin, is your touching your customer directly or indirectly – ask them 3 questions

  1.  Why do we exist?
  2. What value we bring to our consumer
  3. What role do you play in achieving that agenda

If you get a clear and unified answer from each of your function,

  • Give a pat on your back
  • If NO, then you are barking at the wrong tree

Customer experience is not owned by one department, it is owned by the organizations. If you use OKR or Hoshin try incorporating this and see how aligned your teams are.

If you get this right see how growth unlocks, it sounds simple but it that elephant which is moving in your office yet no one sees apart from you !!!

https://www.qilotech.com/strategic-planning-and-execution-software

Agile Practices in Strategy Execution

Strategy Execution is not just Execution problem, it’s also an Alignment and Accountability problem.For companies who have gone beyond the fight for survival, the next level of growth depends on how well the company is able to execute its strategic projects & goals.

Photo by Michał Parzuchowski on Unsplash

Most often these strategic initiatives and projects take a back seat because the people who are involved in executing these projects are also involved in the day to day business operations. Another problem is; people who are involved in the execution of these strategic projects are also not communicated and aligned with why execution of these strategic projects are important for company growth and what’s in for them if execution goes well.

To cut short, CEO and Strategy Head doesn’t invest much of their time in getting the buy-in from the people who are actually executing the growth agenda.  And once the buy-in is their, company face problem in articulating what needs to be achieved and how the measurement on the progress of execution can be measured properly. Current strategy and project management practices and processes are primarily focused on

(a) breaking the projects into too many tasks and sub-task to make sure that people who execute the project should not apply their common sense in execution.

(b) collecting the status of the progress to put a RAG(Red, Amber, Green) status.  CEO/PMO office spend most of their time in collecting the status from various stakeholders involved in projects and task in those projects than spending time on why the executing getting delayed and whether the required outcome will be achieved or not. And whether the required outcome is still per what is required by customer and market.

To summarize, the 3 major problems to achieve the timely execution on strategic projects are

  1. The problem of Alignment and buy-in from people beyond the Senior leadership team
  2. The problem of Articulating what needs to be achieved, how it will be achieved and who will achieve it by when; which leads to the problem of accountability.
  3. Spending more time on Collecting status than analyzing what should be done to bring more agility in achieving the required growth.

While implementing the Strategy execution tool which qilo offers, I get a chance to work closely with many Strategy executions heads, CEO’s and teams. And the biggest challenge I see is lack of Agile Process in entire Strategy execution. I come from the world of Software and started my journey in developing Softwares in 2003,  when the primary model of developing the software was using the Waterfall model; which means that entire software is developed in one short. And by the time the software is presented to the customers and the consumers of the software, the business requirement were changed and/or software doesn’t meet what customer required from software.

And then came the Agile process of software development, where the team delivers the part of working software to the customer on the weekly or bi-weekly basis. The entire team of software developers and managers are divided into smaller teams who are working simultaneously on various parts of the software, and they interact every morning(called Scrum meeting) to share the status of the progress. The focus is more on working software over processes and documentation. And responding to change is more important than following a plan.

The same principles of Agile Software development can be applied to the Strategy Execution Software. Both Software and Strategy Execution are intangible in nature and the delay in delivery of both leads to high opportunity cost. By Applying the Agile practice to Strategy Execution, companies can radically improve the execution and outcome which can lead to accelerating growth. The current processes, Strategy Execution tools, and Strategy Execution software that support execution focus on following the plan than on getting the required outcome by working on collaboration cross-functionally.  Many companies across the globe have already realized the potential of applying the Agile practices in the other parts of execution in business and specifically in Strategy execution.

Are you ready for the Agile Execution of your Strategy?

 

Difference between OKR and KPI

CEO’s and companies who want to implement Objective & Key Results(OKR) as goal-setting framework are often in the dilemma on how OKR is different from traditional yearly KPI/goal setting methodology. And Why they should invest in a change that comes with OKR implementation. There must be good reason for implementing OKR over KPI(Key Performance Indicators).

The similarity between them is that both are the goal-setting approach but with different purpose, starting points, and execution ownership.Here are 3 major differences in both the approaches:

PURPOSE

The purpose of OKR is to achieve and improve Alignment and Execution across the company. The purpose is to enhance the accountability. The purpose is to improve the discipline across the company for how we can grow better & probably faster.

The purpose of annual KPI’s/Goal setting is to measure the performance of the individual at the end of the year. At the start of year, KPIs are set and than are put in under the carpet. At the end of the year, dust is removed from the KPI’s and people are asked to prove themselves as how good they have performed against those KPI’s.

STARTING POINT 

The starting point for OKR is the CEO’s/business Annual Operating Priorities(AOP) and/or Strategic growth & innovation priorities.

The starting point of KPI are the Job Description of the person or should I say the role to which that person belongs to or should I say Google.

OWNERSHIP AND WAY OF EXECUTION

For OKR the execution ownership lies with the CEO or COO or Strategy Head of the company and HR.  You have to create a team who understand the business horizontally and a team which can put stretched objectives and the team that can teach people across the company how to set OKR’s which are directly aligned with company’s operational agenda and strategic priorities.

In Objective & Key Results(OKR) framework, you define WHAT needs to be achieved(Objective) and HOW you are going to measure the progress on your Objective(Key Result). The Key Results can be owned by either the Objective owners or team members of Objective owners or team members from other departments. This results in breaking silos and accelerate the execution. Further Objective and Key Results are agile in nature and are not fixed for year. They gets adjusted based on business conditions.

The ownership to set the KPI’s across the company lies with the HR. KPI’s sit in the silo without any context to an individual as how its impacting the company growth or help in achieving the operating plan. KPI approach worked when the organizations were simple, cross-functional collaboration was not that critical and bureaucracy & hierarchy was the acceptable norm. KPI’s are usually fixed for a year and remains static even if business conditions change.

Summary

  1. Purpose of OKR is alignment and execution, whereas the purpose of KPI is to measure the performance at the end of the year.
  2. CEO or people who understand the business horizontally drives OKR implementation, whereas KPI’s execution are owned by HR.
  3. The starting point of OKR is your Annual Operating Plan or your Strategic Priorities/Themes, where are input to KPI’s are your Job Descriptions.

6 to-dos a day, keeps unproductivity away

I never believed in creating my daily plan, or simply put a to-do list of the day. Its hard to remain disciplined on planning your day. Doesn’t matter how many people/managers or articles or blog post suggested to be a better planner of your day, following it on daily basis is difficult.

Unless you are not working in a system like an army where the organization itself make sure you become disciplined, who cares. But recently after a suggestion from one of the top COO of a company who is our client, I started planning my day by putting down 6 or fewer to-dos that I have to achieve on a day. These are the most important work items I have to finish on that day. And these todos are arranged in the order of priority. That’s it, only 6 or less.

And once these 6 most important things/to-dos of the day at work are finished, post that I allow myself to get distracted by all other things in the world. And the trick is not to jump to 2nd or 3rd to-dos until 1st is not completed. And believe me, at the end of the day I feel much more productive & satisfied at work on that day. Once reach the office, I first thing do is put down these 6 or less most important todos to achieve that day.

Just try to follow this habit for 1 week, every day and see the difference. The most successful leaders/CEO’s I have interacted with till date plan their day. They are way more disciplined on that on daily basis.