strategy executionDo companies with strong metrics culture need OKRs

Metrics and OKRs serve different purposes and complement each other in various ways.

Metrics are specific, measurable values that help organizations track their performance and progress towards specific goals. Metrics are typically used to evaluate performance and make data-driven decisions. They provide a clear understanding of what is being measured and how progress is being made.

OKRs (Objectives and Key Results), on the other hand, are a goal-setting framework that provides a clear and specific structure for setting and tracking goals. OKRs help organizations align their efforts towards achieving specific and measurable objectives, and provide a clear understanding of what success looks like and how it will be achieved.

When used together, metrics and OKRs can provide a powerful toolkit for driving performance and growth. Metrics provide a clear understanding of what is being measured and how progress is being made, while OKRs provide a clear structure for setting and tracking goals. This can help organizations make data-driven decisions and align their efforts towards achieving specific and measurable objectives.

In summary, even if a company has a strong metrics culture, OKRs can still provide significant value by providing a clear structure for setting and tracking goals and aligning efforts towards achieving specific and measurable objectives.

Grading in OKRs refers to the process of evaluating the progress made towards achieving the objectives and key results set in the OKRs. The grading process helps to determine the level of success achieved and provides feedback on areas that need improvement.

Here’s how to grade OKRs:

• Frequency: OKRs should be graded regularly, typically at the end of each quarter or half-year. This helps ensure that progress is being monitored regularly and that any necessary adjustments can be made in a timely manner.
• Who should grade: OKRs can be graded by the individuals who set the objectives, their managers, or a designated team within the organization. It is important to ensure that the grading is done objectively and consistently across the organization.
• Criteria: The criteria for grading OKRs should be based on the specific objectives and key results set in the OKRs. For example, if the objective is to increase sales by a certain percentage, the criteria for grading might be the actual sales figures achieved.

In general, OKRs are graded on a scale of 0-1, with 0.0 indicating no progress and 1.0 indicating full attainment of the objective. Grading provides a clear picture of progress and allows individuals and teams to focus on the areas where they need to improve.

It is important to note that the grading process should be a supportive and constructive feedback mechanism, rather than a source of stress or negativity. The focus should be on learning and continuous improvement, rather than on assigning blame or punishment for not achieving objectives.

OKRs can be graded at different frequencies, depending on the nature of the objectives and the goals of the organization. Here are two common approaches to grading OKRs:

End of cycle grading: OKRs are graded at the end of each quarter or half-year, after the set timeframe for achieving the objectives has passed. This approach is suitable for objectives that are long-term or have a significant impact on the organization and its operations.

Weekly or monthly grading: OKRs are graded on a regular basis, such as every week or every month. This approach is suitable for objectives that are more short-term or have a smaller impact on the organization. This approach provides more frequent feedback and allows individuals and teams to adjust their focus and priorities on an ongoing basis.

Ultimately, the frequency of grading should be determined by the nature of the objectives and the goals of the organization. Both end of cycle and frequent grading have their benefits, and the approach that is chosen should align with the overall strategy and goals of the organization.

Grading OKRs too often can lead to several problems, including:

• Over-emphasis on short-term results: Frequent grading can create a focus on short-term results, rather than on long-term goals and objectives. This can lead to a reduction in the strategic focus of individuals and teams and a lack of commitment to achieving meaningful and impactful results.
• Increased stress and pressure: Grading OKRs too frequently can increase stress and pressure on employees, especially if the grading process is overly punitive or negative. This can lead to decreased motivation and engagement, and may even lead to burnout or high turnover rates.
• Decreased creativity and innovation: If grading OKRs is done in a rigid and prescriptive manner, it can stifle creativity and innovation. Individuals and teams may be reluctant to take risks and try new approaches if they are constantly being judged and evaluated.
• Reduced focus on learning and continuous improvement: If grading OKRs is done in a way that emphasizes fault-finding and punishment, rather than learning and continuous improvement, it can reduce the focus on growth and development. This can lead to a lack of progress and an inability to adapt to changing conditions and requirements.

In general, it is important to ensure that the grading process is supportive, constructive, and focused on continuous improvement, rather than on punishment or blame. This can be achieved by setting clear criteria for grading, involving employees in the grading process, and providing regular feedback and coaching to help individuals and teams achieve their goals

There is a strong linkage between a company’s vision and strategy and their OKRs. OKRs (Objectives and Key Results) are a tool used to align and drive progress towards a company’s overall vision and strategy.

Here’s how to create the linkage between a company’s vision and strategy and their OKRs:

• Start with the vision and strategy: Clearly define the company’s vision and overall strategy, including the goals and objectives that support the vision and strategy.
• Align OKRs with vision and strategy: Ensure that the objectives and key results of each team and individual are aligned with the company’s overall vision and strategy. This helps ensure that everyone is working towards a common goal and that progress is being made towards the overall vision and strategy.
• Communicate the linkage: Clearly communicate the linkage between the company’s vision and strategy and the OKRs to all stakeholders, including employees, managers, and executives. This helps ensure everyone is aware of the overall goals and objectives and understands how their work contributes to the vision and strategy.
• Regularly review and adjust: Regularly review and adjust the OKRs to ensure they are aligned with the company’s vision and strategy. This helps keep the focus on the most important goals and objectives and ensures progress is being made towards the overall vision and strategy.

By creating a clear linkage between a company’s vision and strategy and their OKRs, organizations can ensure that everyone is working towards the same goals and that progress is being made towards achieving the overall vision and strategy.

Google has a company purpose of “to organize the world’s information and make it universally accessible and useful.” This purpose serves as the guiding principle for the company and informs their overall strategy.

Google’s OKRs are aligned with this purpose and focus on improving their products and services to better serve their customers. For example, one of their OKRs might be “Improve search results relevance by X% within the next quarter.” This objective is aligned with their company purpose of making information accessible and useful, and the key result (improvement in search results relevance) helps measure progress towards that goal.

Another example might be “Expand Google Maps coverage to X new countries within the next year.” This objective aligns with the company purpose of organizing information, and the key result (expansion of coverage to new countries) helps measure progress towards that goal.

By aligning their OKRs with their company purpose, Google is able to focus on the most important goals and objectives and ensure that everyone is working towards the same vision. This helps drive progress towards achieving their company purpose and ensures that their products and services continue to improve and meet the needs of their customers.

Here’s a general roadmap for implementing OKRs (Objectives and Key Results) across an organization:

• Awareness and education: Start by raising awareness and educating all stakeholders, including employees, managers, and executives, about OKRs, their benefits, and how they will be used in the organization.
• Define the OKR process: Define the process for setting, tracking, and achieving OKRs, including who will be responsible for setting and tracking OKRs, how often they will be reviewed, and how progress will be communicated.
• Define OKRs for teams: Work with teams to define their objectives and key results. Encourage teams to set ambitious, but realistic, goals that align with the organization’s overall strategy.
• Pilot phase: Launch a pilot phase with a select group of teams to test the process and make any necessary adjustments. This phase should provide feedback to refine the OKR process for the organization.
• Roll out OKRs to the rest of the organization: Based on the results of the pilot phase, roll out the OKR process to the rest of the organization. Provide ongoing support and training to help teams get started and ensure they are effectively using OKRs.
• Monitor progress and adjust: Regularly monitor progress and adjust the OKR process as needed to ensure it is effective and efficient. Celebrate successes and learn from failures to continuously improve the OKR process.
• Make OKRs a habit: Make OKRs a habit in the organization by regularly setting and tracking progress, celebrating achievements, and encouraging teams to continuously improve.

This roadmap should provide a general framework for implementing OKRs, but the specific timeline, approach, and details will vary depending on the size and complexity of the organization and the specific goals and objectives of the OKR implementation.

Hoshin Planning process, derived from Japanese policy deployment approach of Hoshin Kanri (Policy Deployment) has several salient features over conventional strategic planning process.

If you are accountable for organizing annual goal setting for your organization, it would be a good idea to learn about Hoshin Planning process.

Following are the top 7 salient features of Hoshin planning process:

Prioritization : Every organization, however big it is, works with limited resources – time, people and $$. One of the key reasons for derailment of business strategy execution is lack of prioritization at the time of creation of annual strategic plan. This is one such area where all organizations fail, immaterial of their size. Between the eagerness to achieve stretch goals and fear of not achieving them, most leaders compromise on the prioritization and end up doing everything. One of the fundamental principles of Hoshin Kanri (Policy Deployment) is prioritization. Some goals are more important than others, some strategies are more fruitful than others and some strategic projects create more impact as compared to others than created only trivial impact. So it is not possible to give equal priority to all goals, strategies and strategic initiatives. Thus Hoshin planning process forces the leadership team to prioritize organizational goals, strategies and strategic projects based on the parameters like organizational vision, internal and external environments and voice of customers.

‘De-selection’ : At the first sight, ‘Deselection’ might sound like the corollary of Prioritization. “Deselection” actually precedes prioritization. Hoshin Planning process encourages the leaders to deselect goals, strategies and strategic projects that aren’t important rather than selecting important ones. Thus ‘De-selection’ is the process of systematically eliminating or parking, goals, strategies and strategic projects that aren’t most important. In my experience most large organizations fail when it comes to deselection. They run too many strategic projects concurrently with gross overlap in scope by resources who are spread thin on various projects. These are clear indications that ‘deselection’ isn’t effective. The criteria for de-selection can vary. Usually following criteria work –

• Will it provide breakthrough results?
• Are required critical resource available?
• Is there a strong association with organizational vision?
• Is internal and external environment factors conducive?

‘Must-do, can’t fail’ Attitude : Hoshin Kanri (Policy Deployment) approach emphasizes the organizational leaders to imbibe a ‘Must do, Can’t fail’ attitude when it comes to prioritized strategic projects. In spirit, it means that the organization believes that a ‘must do, can’t fail’ initiatve is critical for the success of the organization and hence the leaders need to do all it takes to make it successful because it failure directly impacts the organizational goals.

Joint Accountability : Hoshin process encourages sole ownership and joint accountability of the leadership team in deciding and achieving the goals. While individual leaders hold sole ownership of an organizational goal, the leadership team of the organization too holds joint accountability. ‘Catch-ball’ mechanism is a method adapted in Hoshin Kanri (Policy Deployment) approach to drive this joint accountability for goals. Again, this is one of the biggest areas where large enterprises fail.

Constructive Negotiation : Hoshin doesn’t encourage strong top-down approach. Instead it encourages leaders to negotiate goals, resources and ownership, both vertically and horizontally using ‘Catch-Ball’ mechanism. By doing so, leaders participate in their own goal setting rather than accepting goals given to them. Cross functional ownership of goals are also agreed in the similar manner. While this process does consume some extra time in finalizing the strategic plan, it brings in lot of clarity and acceptance among leaders.

Resource Optimization : Resources are very critical for the success of strategic plans. They can either be people, equipments, funds or other resources. But, in most organizations, its people who drive strategic plans. But when they are over utilized, it directly impacts the success rate of strategic initiatives and achievement of organizational goals. Embedded in Hoshin planning process is the resource allocation and optimal utilization to avoid failure due to skill mismatch or non-availability. There are inbuilt mechanisms that prevents a resource from being over utilized.

Integration of budgetary planning and performance management process : Hoshin planning process isn’t a stand-alone annual planning process. Organizations that have been successful with Hoshin Kanri (Policy Deployment) have integrated the budgetary planning and associate performance management process. The ensures that financial planning and associate incentives are aligned to organizational goals, strategies and strategic projects.

While there are few more features of Hoshin Planning process, the above 7 are compelling enough to pursue this approach if the organization wants to succeed in achieving its critical goals.

About the Author:

Nilakantasrinivasan aka Neil helps a range of large enterprises in services and manufacturing, with particular emphasis on execution of business & functional strategies using Hoshin Kanri(Policy Deployment). He can be contacted at neil@collaborat.com.

Kanri is the strategy execution process in the Japanese approach of Hoshin Kanri. To my knowledge, it is the only approach that seamlessly integrates strategy creation to its execution. Considering that this Japanese method has been in existence for 60~70 years now, it is interesting to know that originators of Hoshin Kanri have given equal (or even more) emphasis on strategy execution way back then. When you learn about the salient features of Kanri Strategy Execution Process, you will be able to appreciate this.

• Diligent Review Mechanisms: First and foremost feature is existence of diligent review mechanisms in Kanri process. None of us are new to reviews, but kanri process focuses in appropriate forums, agenda and duration for these reviews. More importantly it emphasizes on the consistency of reviews. A cathedral has to be built one stone at a time. In the same way, organization goals have been accomplished by systematically achieving one milestone after another. Kanri review mechanism is built to enhance the chances of success in execution of strategies.
• Course-correction : Today business environment is very dynamic. Strategic plans created in the beginning of the year become redundant in a quarter or two. In order to assess the changes in the environment and keep strategies and strategic initiatives relevant, Kanri strategy execution process has built-in mechanisms such as quarterly strategic reviews and forced re-prioritization that ensure the organization remains concurrent and takes timely >course corrections. Kanri is a compass that guides the captain of ship to alter course to compensate for strong currents and winds, there by reaching the destination.
• Fact-based Decisions : I have personally reviewed the strategic projects of many organizations. Frankly, I find them hollow. The importance with which they are conceived by the leadership team is missing in their action plans. Most strategic projects are wish lists in an action plan format. The team uses a trial and error method to accomplish the objective of the project. As a result the success rate of strategic projects are very low. But the real problem is lack of systematic and fact/data based analysis prior to formulation of action plan. As a result, the team works on trivial things and miss the vital factors that would deliver breakthrough results. Among organizations practicing Hoshin Kanri, the of use A3 approach for this conducting a fact based analysis of the problem is distinct.
• Power of Gemba : ‘Gemba’ in Japanese refers to actual work place(field). Usually strategic plans are created and reviewed in boardrooms. But Hoshin Kanri emphasizes the role of creating and managing strategic plans through insights from Gemba. So, both during Hoshin planning and Kanri strategic execution process, the leaders have to visit Gemba for insights. In fact the kanri monthly reviews happen in the Gemba. This gets leaders close to ground reality.
• Visual Control : Like many other Japanese management approaches, Hoshin Kanri relies on visual control mechanisms (Mieruka in Japanese). Starting from the X-matrix to the Project Plans and Traffic Light dashboards depicting the status of strategic projects, visual control is a key means for driving strategic plans.
• Sustenance of results : One of the reasons for people to believe that execution is an issue is because strategic projects don’t sustain on long run. Kanri Strategy Execution process not only enables to deliver breakthrough results but it also focuses on sustenance of those results. Mechanisms to sustain and monitor the outcomes of strategic projects are given equal importance. Visual traffic light dashboards are updated for the leaders to understand the progress of strategic meetings.
• Resource Optimization : Execution issues such as lack of participation from team members, resources being too busy to attend strategic project meetings and many such trivial issues are addressed in Kanri weekly and monthly reviews. The means of drawing consensus on these issues is by using ‘Catch-ball’ method.

About the Author:

Nilakantasrinivasan aka Neil helps a range of large enterprises in services and manufacturing, with particular emphasis on execution of business & functional strategies using Hoshin Kanri. He can be contacted at neil@collaborat.com.

Team ‘Karma’ – First & most important step for your organization’s success in strategy execution

In cricket, a batsman in good form compensates for the runs missed by his partner. Let’s say in a situation where they need 26 runs to win in 2 overs. They don’t set individual targets such as 13 runs per person in 6 balls. Instead, one takes the lead and other does his best.

We observe similar phenomenon in many other sports and arts too. In a live theatre performance, when an artist forgets his scripts, co-artists make it up by altering their scripts instantly to make sure the message is conveyed and the show is successful.

I recently asked a team of senior management staff of an enterprise to write down the names of key team members. Their lists mostly contained names of their subordinates. No one from the senior management appeared in each other’s list.

So the CEO feels his direct reports are his team, but the direct reports don’t feel CEO as part of their team. Irony isn’t it!

Each member of the leadership team seems to have a feeling that they are representing their respective teams in Management Committee. So they are there to defend, protect, project, celebrate, complain and express the interests of their business unit (or department).

When I challenged them on their definition of team, some were confused and remaining reluctant. Perhaps such a transforming, yet simple thought cannot be accepted in a single go.

Some points to ponder as a leader of the senior leadership

• Are you willing to take up initiatives where there is lack of clarity or clear demarcation of ownership with your peers?
• Do you care for the success of other business units or departments?
• Are you confident that you can willfully persuade your peers without undue influence?
• Would you voice for something of concern for the organization, that is beyond your purview or assume that to poke your nose into other’s business is poor etiquette and stay away?
• Are you genuinely open to view points from peers that contradict yours, especially if it’s about your business?
• Do you use senior leadership meetings to push your department’s agenda or instead push organizational priorities into your department’s agenda?
• Do you allocate your best resource for projects led by other departments or just a head for them to count?

These are all inconvenient questions to answer. But to gain some common understanding and move forward is very important for the senior leadership team because like individuals, teams have their Karmas too. They bear fruits of their actions and decisions. Individuals of the team ripe the fruits of their team’s actions or decisions – good or evil!

So if you are part of a team, you can’t say I don’t care about some decisions because they don’t impact me or my business. Sooner or later they will impact you. In simple words, the sense of ‘joint accountability & commitment’ of individuals to common organization goals is nothing but ‘Team Karma’.

Why does Team Karma matter more for senior leader than anyone else. A study concluded that

80 % of all organizations which have well defined strategies fail to execute them well!

Failure to execute strategies is Senior Leadership Team Karma, not the CEO’s!

A senior leader’s Team Karma in driving organizational strategies

• ‘Agreeing to Agree’ rather than ‘Agreeing to Disagree’ on organizational prioritizes
• Actively contributing for initiatives that you or your department isn’t responsible
• Releasing your best staff for the most important organization strategic initiative
• Accepting to take budget cuts, if you can, to divert budget for other important strategic initiative
• Being accountable for organizational goals and strategic initiatives
• Provide resources to a strategic initiative run by another department than to a trivial project of your department

Thus to create a sense of team belonging among the senior leaders, their Team Karma is the first and most important step for any organization’s success in strategy execution, immaterial of scale, line of business and geography.