“Objectives are not commands, they are commitments.” – by Peter F. Drucker
We all have heard a lot of stories on wisdom when we were growing up and I will start this blog by sharing one of my favorite stories – The farmer & his 4 sons.
Once an old farmer lived in a village. He had four sons. They were always quarreling with each other. The farmer tried hard to bring unity among them but they would never listen to his advice. He was very worried about their future.
One day, the old farmer fell sick and decided he should bring unity among his sons. He called his sons and asked them to bring a few sticks. They brought the sticks. The farmer asked the eldest son to tie them in a bundle. He then asked them to try their strength to break it.
Each of the sons tried to break the bundle but failed. Then the farmer untied the bundle and gave one stick to each and asked them to break it. Each of them was able to do it easily.
The farmer said, “Now you understand. If you are united nobody can get better of you. But if you keep quarreling, you will be broken by anyone.”
The moral of the story is that strength is in unity.
In the above story, the farmer had an objective of uniting his sons who if kept quarreling would end up being alone, lose the family wealth and will get manipulated by the society. He could have simply chosen to divide his farming land and let the kids walk away on a separate path but instead he chose to focus on the core values.
Likewise, for an organization to succeed, it is important that it has a clearly defined business strategy which is communicated to everyone so as to attain a common heartbeat. The growth pain triggers for any organization are often lack of alignment, insufficient transparency, safeguarded interests by group-level executives and dissatisfied customers.
Moment when the farmer’s sons realized that together they could succeed and that should be the way forward, the change towards moving in the right direction began. Similarly, the top level strategy should be to bring people together towards the common shared goals and this could be achieved by OKRs or Objectives & Key Results technique.
Today’s world is ever changing, it’s the age of digitalization and what we call as a VUCA (Volatile Uncertain, Complex , Ambiguous) state of present is increasingly being replaced by BANI (Brittle, Anxious, Non Linear, Incomprehensible) future state which will be even more chaotic.
As an agile consulting company, many of our engagements focus solely on shorter business cycles and faster decisions. How does a conventional management system with an annual objective review cycle align with these faster cadences and cycles? This kind of objective setting and review are bound to be counter productive in future.
Conventional approach is top down with siloed, hierarchical and a downward flow of goals. For example, the MBO approach (Management by Objectives) or model improves performance of an organization by defining objectives which are agreed upon. But soon the management loses sight of the objectives as they are caught in a multitude of activities.
In the current phase of Agile ways of working, we are looking at self organizing, closely knit agile teams who are meant to think, work on their own and create value. With this way of working top down approach may not be effective as these approaches are based on linear planning and control. For such agile operating models the OKR system would turn many conventional elements on its head.
What is an OKR?
“OKRs have helped lead us to 10X growth, many times over”. – Larry Page, co-founder, Google
Objectives and Key results is a collaborative goal setting mechanism where we establish high level, measurable goals for business by establishing targets and outcomes that are tracked periodically. OKR was first created by Andy Grove and later popularized by John Doerr. OKRs are simple and flexible depending on how the implementation is done as long as we don’t set them and forget them by getting caught in the activity trap. So how are they different from other conventional approaches of objective setting? The OKRs are frequently set, tracked, reevaluated by engaging with the teams, taking their perspective and creativity into consideration. Let’s look at what each letter of OKR stands for.
An “Objective” in simple terms is “What is to be achieved”. These objectives are actionable, significant and concrete. These are based on strategic priorities.
“Key Results” which explains “How we achieve the objectives” or the “The success indicators”. These key results have to be measurable, achievable, relevant, realistic and time bound.
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