Strategy, OKRs and habits
In my last ten years or so in the insurance and tech business industry I have seen a fair bit of different methodologies to build a company’s vision, find strategic goals, get a strategic program up and sometimes, if the company was any good, even operationalized their strategy.
With the vision part I have a bi-variant opinion. There are visions out there, especially if the company is altruistic, which really sticks with the customers and the employees, driving the values and ethics. Everything comes natural to them and the formulated vision is a solidification to their mission (About ChildFund | ChildFund ). This is easy and for sure the stated vision is valuable to have. Then there are the capitalistic companies out there. If you cut the crab short their vision is always to earn more money with less cost in a shorter amount of time and the management team more times than not struggles to find some bullshit for the employees and the public to make the agenda less dull, even they spend billions on their marketing budgets (https://about.nike.com/en ). However, to my experience especially for startups and new starting employees it is important to have a vision as the lack of it always leads to the question what the company is/should be about and discussions about strategy and priority starts more times than not at ground zero. At vantago we have the simple vision to “Be the best in innovating and digitizing the german energy sector”. This always gives us a funnel for our ideas what strategic goals we should aim for.
This next step behind the vision is trivial so. You maybe can steer a company without a vision, especially if it is a well-established business model with a huge amount of established customer relations. You for sure cannot steer a company effectively if you skip on strategic goals. Especially, if you still need to build up your business model or you act in a dynamic environment in regards of competition or customer behavior this step is non-trivial. If you lack goals in such a situation you cannot come up with a plan what everybody at the company should do with their time and therefore the work goes on as usual or becomes erratic, not adding up to long term success. So it is important to specify mid to long term strategic goals and communicate them to your complete team. All of them. Not just the managing team. Don’t rely on, that your employees have read the investor call notes or that they read the confluence page, etc.. Make personally sure they heard the strategic goals.
Now, how to get these goals and a plan how to reach team? This is where the fun begins. If you have your strategic goal set to become the world leader in selling bamboo mattress; how to reach it? You need a plan. Normally small steps/objectives and initiatives you believe do add up to reach your goals.
In bigger companies I see sometimes the strategic plan to consist out of purely economic goals broken down for each department and quarter or year, especially if the strategic goal is purely consisting out of economic key performance indicators itself. To my understanding this maybe can help in coming up with an actual plan however this breakdown is and cannot be called a plan in itself. So maybe it helps but you still lacking an actual plan. To my understanding a plan need to answer the question on how! you reach your strategic goal(s) on a top management level. So for example for the mattress: by developing a new product with certain attributes in time X and C cost and selling it in the markets Y and Z via online marketing. Or as a big insurance company how the cost saving in department XY is achieved. The plan doesn’t need to be a complete business case, a topic in itself for another blog post but at least specific enough everybody and especially you are able to decide on investment (may it be money or time) priorities till the next planning is done.
Well established companies with not so dynamic environment can come up with a plan spanning over years as typically no new information or bigger deviation in plan execution occurs as the company basically executes on their well understood business model and the goals and the plan are rather uninteresting to everybody as it doesn’t affect decision making and their day to day work.
If the plan is important for you company the question is how to come to it. There are several exercises you should do which are also common for business case development. Elements I find important are:
You should do workshops on all these topics and form the overall plan with more than one mind involved. If you are an one-man entrepreneur get a friend, your family or even hired advisory or business angle involved.
Most companies do this on their yearly executive retreat. To my knowledge it makes no sense to have this workshop event if the strategic goals are already set by the CEO beforehand. You think this sentence sounds trivial? You would wonder how some leaders act even or maybe explicitly in large cooperates.
With all these information the team working on the strategic objectives should come up with long term quality objectives not specific to-dos defining their way forward at least for one to two years even if they rethink on learnings in much shorter frequency (see below). In the next step now these rather top level objectives gets broken down to operationalize them.
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Drucker’s Management By Objects (MBO) (Management by objectives ) or Grove’s Objectives and Key Results (OKR) (OKR ) are the most commonly used methodologies to operationalize the plan while employees still have some freedom to find ways to achieve theses goals. I worked with both and my personal preference lies with OKRs in combination that the teams come up with the KRs as the methodology defines the process. This way the commitment is higher and the leadership team gets at least feedback in regards of achievability of their objectives. For sure objectives need at some point a SMART clarification (SMART criteria ). There are a bunch of tools out there supporting these methods (Das New Work OS für OKRs | Mooncamp ,?OKR Software | Ally.io ,?Leapsome: People Enablement Platform , etc.). To my experience these toolchains are helpful if your company already exceeds around 100-150 employees and acts in a volatile environment/still changing business model. If you are smaller or the environment and business model is constant you can stick to other documentation and controlling workarounds like for example a confluence or sharepoint section. You can also find a rather best-practice description of the complete process with Torben Mottes here on LinkedIn (Strategic Planning with OKRs )..
However, both methods don’t solve a major challenge. The challenge of discrepancy between daily working reality and state your company is in right now and the strategic objective you planned for. So many companies find themselves in an ongoing broadening delta between strategic objectives and reality. Especially, if the objective management cycle is too long or no adaptation to the strategic plan is possible. Then unchecked, especially with OKRs, your key results will derail from your strategic objectives. As a leading manager you need to react and should so no matter what kind of methodology you use (OKR, MBO or something else). First you should shorten the strategic management cycle for breaking down the planned for objectives to smaller ones. Today the commonly used frequency I perceive in the startup scene is quarterly for OKRs while most companies do yearly for MBOs as it is worked upon the SMART objectives in the strategic planning retreat. Shorter can make absolute sense if the second reaction demands for it. Which is to adapt the strategic plan and objective breakdown per objective cycle. I see many management teams not doing this, which leads to non-authentic and unrealistic objectives. You cannot state unrealistic objectives to your teams while demanding commitment and realistic rechability but instead need to learn on the new information and knowledge you gathered from the last objective cycle. It is therefore like with SCRUM. You need a honest retro and review step on the achieved KRs and based on this information adapt also the long term strategic plan and the objectives for the next cycle.
Be careful so, depending on the investor and your investor relation your perceived learning can get you in trouble or even fired or you will become the skeptic one who’s arguments are constantly neglected.
Remains the last and most demanding step. The incorporation of the KRs and or actions to reach the objectives into the day to day work and the adaptation of the habits of each and everybody in your company, also yourself.
While methodologies like SCRUM(
Scrum Guide | Scrum Guides ), KANBAN (Kanban (development) ) or scaling derivatives like SAFe (SAFe 5.0 Framework ) and tools for work distribution and controlling do help (for example:?Verwalten Sie die Arbeit, Projekte und Aufgaben Ihres Teams online ? Asana ), everybody in your teams need still to structure their work efforts. Being effective in the daily working chaos is a huge topic by itself and is covered by many guide books. What works and sticks is rather individual and not really important as long as you and everybody in your teams adapt something which works for them. I personally can recommend some of the classics like:
If you never read one of those I absolutely recommend to work through at least one of them. While the goals to form habits which stick and support you on reaching your goal each one of the first three have slightly other approaches while the latter two are broader on all life aspects (Tools of Titans) while the last one focus on todays communication overkill, especially due to emails.
Coach and mentor your teams on these topics so they start develop their productive habits to work towards the strategically aligned key results of your objectives in the day to day working day. Gift for example one book per year to your leadership team.
To my experience a missing out on any one of the above steps besides the vision part always led to a reduced performance in comparison to the potential achievable even if success still came.