The most effective analogy is to think of this as a car journey - organisational strategy is your destination, KPIs are the dashboard keeping you updated about the general health of the car, whether you have enough fuel for the journey etc, and OKRs are your satnav, outlining the best path to reach your end destination and demonstrating your progress along the way.
OKRs Vs KPIs
It is important to differentiate between OKRs and KPIs at an early stage as they fulfil different needs for an organisation. Put simply, KPIs are created to measure the output, quantity, or quality of an ongoing process or activity (how the entity is performing today), whilst OKRs are for establishing what outcome a team, department, organisation or individual is focusing on achieving in the future (performance against a desired future state). There is a close link however, as it is often said that a poor performing KPI may often be a starting point for creating an OKR.
Our consultants have a history of using best practice models for Continuous Improvement and Excellence with clients, which often incorporate specific lenses that focus on more holistic elements of corporate strategy, such as innovation, disruption or ESG. This dovetails perfectly with the strengths that OKRs offer to deliver such improvements.
OKRs consists of Objectives (qualitative statements outlining what you want to achieve and reflecting current business priorities, goals and intents) and Key Results (quantitative statements that clearly track and measure the achievement of those objectives). When all Key Results for an Objective are completed, by definition the Objective will have been completed.
OKRs (Objectives and Key Results) is a simple yet powerful, collaborative goal-setting protocol for businesses, teams and even individuals, relied upon by organisations around the world to drive (among other things) strategic focus, alignment, and engagement.
It is a management methodology that helps to ensure efforts are focused on the same important issues throughout the organisation, and a fundamental change in the way organisations think about setting and achieving their strategic goals that requires cultural self awareness and top to bottom commitment. Put simply, OKRs should transform the organisation.
OKRs are most frequently associated with delivering an organisation’s entire corporate strategy, but we at OKRAdvisory subscribe to the growing recognition that they are also highly effective at focusing businesses and teams on the delivery of alternative corporate goals.
Prioritising a small number of key objectives that will demonstrably move the business forward: what matters most
Ensuring that everyone is pulling in the same direction to minimise waste and foster teamwork
Clear ownership of the OKR and underlying activities, both top down and bottom up
A requirement to create challenging OKRs that drive improved performance
The most mature organisations will have full transparency over the organisation's OKRs, and its performance against them
Benefits of OKRs
The key benefits of implementing OKRs are most often referred to as their superpowers.
In addition it is widely regarded that OKRs have further upstream and downstream benefits as a result of their agile properties, such as allowing organisations to rapidly iterate their strategies, improving the speed of execution, creating less siloed work streams, supporting an inclusive culture of engagement where staff at all levels more clearly contribute to the performance of the organisation, and engendering creativity and innovation. Adoption of suitable technology enablers plays a significant part in further enhancing these intrinsic benefits.
Inviting everyone throughout the organisation to contribute to, and share in, its future successes ensures a sense of ownership and belonging
OKRs are not a new concept, but their growing popularity is the result of a number of factors, most noticeably their successful implementation within certain high profile organisations, their popularisation through a number of highly regarded publications, and the pursuit of a more agile strategy framework within businesses of all types and sizes.
OKRs in their current form are an evolution of methodologies that can be traced back to the mid 1950s, with the development of a strategic management model that aimed to improve the performance of an organisation by clearly defining objectives that are agreed to by both management and employees. This was taken forward by Andy Grove of Intel fame during the 1970s, and then came to further prominence when John Doerr, previously of Intel, introduced the idea to Google in the 1990s. This is widely regarded as critical to Google’s success, and acted as the modern day launch pad for OKRs as we know them.
What makes OKRs different?
A unique property of OKRs is that they are 'open source', in this context meaning that there is room for interpretation when applying them within any business context, which in turn means that OKR practitioners tend to differentiate by specialising in a particular application of the model. Here at OKRAdvisory we combine the methodology with our extensive background in Strategy Maps and Balanced Scorecards to offer Variable Cadence Implementation (VCI).
Another differentiator of OKRs is that unlike many early strategy implementation models which were developed independently of technology - not surprising when we consider they originated in a time before the widespread use of personal computers and smart devices - the ongoing evolution of OKRs over the years has progressed hand in hand with the advance of technology. As a result they are unusual in their reliance on the effective adoption of suitable technology to increase the chance of successful implementation, usually in the form of a bespoke OKR solution. Fortunately, unlike many OKR specialists, OKRAdvisory are entirely technology agnostic and appreciate that where bespoke solutions come in to play there is no such thing as 'one size fits all'. Our consultants all have technology backgrounds and as such are best placed to advise our clients on which solution is most appropriate for their specific implementation in an entirely independent manner.