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Drawing from over 22 years of expertise in OKR, Strategy, and Organizational Development, I'm thrilled to unveil the PSTO (Purpose, Strategy, Tactical, and Operational) model. This all-encompassing approach seamlessly aligns an organization's goals across diverse hierarchical levels. Evolving from the classic STO model, PSTO spotlights the importance of uniting Purpose with Strategic objectives and their corresponding Tactical and Operational objectives. The key to this model's success lies in constant alignment across all levels, ensuring goals remain both relevant and dynamic.

The PSTO model is composed of five interrelated elements:

P????????????: The grand vision and mission that underpin an organization's strategic decision-making process. At this juncture, the focus should be on crafting North Star metrics that embody the organization's long-term aspirations. For example, a renewable energy company might have a Purpose to " Enable a cleaner, greener world by providing innovative and sustainable energy solutions."

Its best to have a North Star Metric that combines profitability, business impact and customer benefit all in one:

e.g.: The NSM for the renewables company could be: ‘’Increase the total number of households and businesses powered by our renewable energy solutions by 30%."

S??????????????: Lofty objectives that transform the Purpose into actionable strategies. To monitor progress and encourage alignment, the Strategy level should integrate OKRs (Objectives and Key Results)—quantifiable goals that delineate what must be accomplished and how success will be measured.

e.g.:

Strategic Objective: "Become a dominant force for change in the renewable energy market."

• Key Result. Increase the company's market share in renewable energy by 15% within three years.
• Key Result. Establish partnerships with three leading environmental organizations.

????????????????: Mid-tier objectives that break Strategy into discrete initiatives and projects. Similarly, to the Strategy level, OKRs should be deployed at this stage to guarantee that team members comprehend their roles in realizing the organization's strategic goals.

e.g.:

Tactical Objective: "Deliver ground-breaking renewable energy solutions to the market."

• Key Result. Launch two innovative renewable energy products by the end of next year.
• Key Result. Secure five industry awards for product innovation and sustainability.

??????????????????????: The daily tasks and duties that offer direct support to Tactical objectives. Operational OKRs play an instrumental role in maintaining a visible and trackable connection between activities and the overarching objectives of the organization.

e.g.:

Operational Objective 1: "Elevate production efficiency and sustainability in Plant X”.

• Key Result. Improve production efficiency by 10% in the next six months.
• Key Result. Reduce the carbon footprint of the production process by 20% within one year.

Operational Objective 2: "Improve customer satisfaction and engagement to support the growth and adoption of renewable energy solutions, directly impacting strategic and tactical OKRs."

• Key Result. Increase customer satisfaction rates by 20% within the next year by enhancing support services and providing timely, effective communication.
• Key Result. Implement a customer feedback loop system within the next six months, resulting in at least 10% of customers actively participating and providing valuable insights for product and service improvements.

It is essential to differentiate between Business as Usual (BAU) and Operational OKRs. BAU activities represent ongoing tasks and responsibilities that must be consistently carried out for the smooth functioning of the organization, while Operational OKRs focus on specific objectives aligned with the organization's strategic and tactical goals. Both are crucial to the organization's success, with BAUs maintaining stability and Operational OKRs driving progress.

???????????????????? ??????????????????: The ongoing process of ensuring that the OKRs at each level stay interconnected and relevant, enabling the organization to adapt to market shifts or internal changes. Regular evaluations and adjustments to OKRs across all levels maintain a cohesive focus on the organization's Purpose. For example, if a new competitor emerges with a revolutionary renewable energy product, the organization may need to realign its Tactical and Operational OKRs to address this development and maintain its competitive edge.

In summary, the PSTO model delivers a sturdy framework for coordinating organizational goals and objectives across all levels, highlighting the integration of Purpose and North Star metrics. By employing OKRs at the Strategy, Tactical, and Operational levels, organizations can uphold continuous alignment, ensuring that all team members are striving towards a common vision. Embracing the PSTO model and OKRs will not only bolster organizational efficacy but also propel long-lasting success and expansion.

Kenneth Paul Lewis?is an expert leadership and management trainer and facilitator. He is an expert?#OKR?consultant and executive coach. He is also an entrepreneur, seed-investor and on the board of directors of a few organizations.

Write to [email protected] to help your organization's leaders and teams on leadership, team working, strategy and OKRs.