Experts in Strategyactivation
„In vielen Unternehmen ist das Zielsystem – gerade bei strategischen Veränderungen – häufig diffus und unklar. Oft fehlt eine gemeinsame Vision oder ein übergeordnetes Ziel.“
Goethe knew that success requires two things: “Clear goals and a burning desire to achieve them.” But in complex day-to-day business, goals quickly become unclear and diffuse – one can lose sight of them over time. That’s why it’s recommended to work with Objectives & Key Results (OKR). Here you will find out what OKRs are, how they should be defined and why they form the basis of effective strategy implementation.
Are you facing the exciting challenge of implementing important strategic plans and looking for an effective method to get your team on track?
In this blog post you will learn how OKRs operationalise strategy implementation across all areas and how you can unleash the full potential of this agile method with a leadership sprint.
Let's start with the unpleasant news: nine out of ten strategic projects are disappointing. What are the most common reasons?
Effective strategy implementation is a complex process that is often associated with challenges and hurdles.
A strategy without clear and inspiring goals can lead to confusion and disorientation.
Strategy implementation often requires changes in the organisation, which can be met with resistance.
When responsibilities are not clearly defined, confusion and duplication of effort occur.
Effective strategy implementation requires open and transparent communication.
Often a strategy is developed without providing sufficient resources and support.
‘Leadership sprints based on the agile target framework of the Objectives Key Results combine common sense with findings from neuroscience and a focus on results. Leadership sprints are designed to last three to four months.’
Why do we need clearly defined goals?
The more defined and specific goals are, the more clarity they bring to our working lives.
In many companies, the end goal – particularly when it comes to strategic changes - is unclear. A common vision or overarching goal is often missing.
The art of good leadership lies in creating a consistent vision in the minds of those involved and aligning their thoughts and actions towards common goals.
Clearly formulated goals have an immense effect on the commitment and responsible actions of employees. The brain works like a filter that directs attention to relevant information.
Think of clear goals as a shared mental navigation system for your organisation. They reduce complexity and create clarity in the thoughts and actions of your employees. As a result, many small beams of consciousness converge into a powerful laser that advances your strategic goals.
Global management consultancy Deloitte conducted a field study on employee retention and found that no single factor has a greater positive impact on employee loyalty than “clearly defined goals that are written down and shared with everyone.”
But how do you implement your goals effectively?
This is where the Objectives and Key Results come into play.
The Objectives and Key Results (OKR) approach was coined by Andy Grove as a more flexible and brain-friendly development of MBO. The co-founder of the semiconductor manufacturer Intel consistently used OKR as a central control tool to keep the company's innovation and growth on track for success.
John Doerr, who himself worked at Intel for a time, used the system as a Silicon Valley investor to provide the management teams in which he invested with a powerful control tool. These included Larry Page and Sergey Brin who co-founded Google in 1999 to “organise the world's information and make it universally accessible and usable.”
John Doerr said: “There is no return for poorly coordinated collaboration and a lack of focus.” The OKR target framework is still used consistently today at Google, but also at other innovative companies such as Adobe or the subsidiaries of Rocket Internet in Germany.
The target framework of the OKRs is extremely effective for implementing strategic projects quickly and successfully.
Strategic initiatives are usually implemented in quarterly ‘leadership sprints.’ Based on a long-term vision and medium-term strategic goals. Clear priorities and results are defined from quarter to quarter on which everyone involved focuses in order to achieve the greatest possible progress.
The benefits of OKRs and Leadership Sprints are impressive:
A good goal system consists of a long-term vision - a clear target image that describes the ideal state of how a company would like to act and have an impact on the market and goals with different deadlines.
The most important management task is to set the strategic guidelines and design a process that ensures a vision and a coherent system of goals. Only top management can be responsible for the goals and their quality. These are the people on the captain's bridge that can see the connections and developments that are necessary to assess the effectiveness of goals. When developing the goals, however, it is important to include those who will later be responsible for implementation.
The goals serve as a guide for your team and your employees and provide direction. The desired target state should be clearly described and formulated in an ambitious and clear manner. The goal should be formulated in an inspiring way as to stimulate new thinking. The goal helps to make and focus decisions when resources and capacities are limited.
Describes a visionary future and is strictly timed. For example, becoming the market leader in a certain segment, opening up a new market, becoming the most attractive employer for top talent…
Are strategically relevant goals that are to be implemented in the next one to two years. For example, acquiring new customers, bringing a new product onto the market, filling strategically relevant positions…
Are interim goals and key results that are currently in focus and should be implemented in the next 1-3 quarters. For example, validating a product idea, concluding a sales partnership or developing a new offer for graduates…
These measurable results show progress towards goals and serve as ‘leading Indicators.’
All affected managers and relevant experts should be involved in the quarterly planning of the current priorities. OKRs are not directly tied to financial incentives, which allows your employees to adopt an open, learning attitude. It's not about achieving 100%, but about reflecting and learning honestly and openly.
With OKRs you can revolutionise strategy implementation and put your organisation on the road to success. Clear goals and an effective target framework are the key to motivating your employees and achieving great things together.
Your success is within reach - use the power of clear goals and OKRs!
“In the last two years our company has more than tripled in size. An essential part of this was the collaboration with MLI. The structured approach with OKR was a real game changer for us as a management team. Sebastian Morgner gets to the root of every challenge with his questions. He has made an important contribution to our development.”
“MLI assisting with Leadership Sprints has set a whole new level at which our leadership team is able to discuss target setting. The conversations are very honest and sometimes exhausting - and yet I always go back to the office full of energy and enthusiasm!”
The limitation of three priorities per person and a quarterly rhythm make OKRs a flexible and effective tool for turning complex strategic visions into tangible goals.
The key to success is to have each goal implemented by a cross functional, mission driven, OKR team. This team should be focused on achieving goals and key results as quickly as possible and can bring different skills and abilities on board from quarter to quarter as needed. During the sprint, the team should work on the key results without being disturbed by new requirements.
The benefits of OKRs are impressive and include, among other things, transparency, focus on important results, flexibility, collaboration and clarity in everyday work.
To realise the full potential of OKRs, the OKR sponsors and the OKR masters play a crucial role. The OKR sponsor, usually the manager of all affected areas, supports and promotes the procedure.
The OKR masters take care of the process design and moderation of the OKR events.
There are some important principles that allow OKRs to complement a mental navigation system that effectively synchronises an entire organisation, or individual areas involved in a future expedition:
“OKRs operationalise effective strategy implementation across all affected areas. The leadership team should also use the mission statement to check that all important aspects have been distributed across goals.”
Let's imagine a company that pursues a sustainability strategy to become more crisis-proof and more profitable in the long term. The principles of circular economy and the cradle-to-cradle approach in production are reflected in the jointly developed sustainability mission statement.
If the mission statement concerns an organisation's innovative strength, one goal could be to build an ecosystem with start-ups and academic institutions that work together on future topics. A complementary goal would be to free up a significant percentage of existing capacities for innovative thinking and experimentation. A third, complementary goal would be to bring a new type of service to market. All of these goals would contribute to making the defined mission statement come true.
The limitation to three priorities per capita and the rolling, quarterly rhythm are an important development compared to Drucker’s MBO approach.
MLI can support you in introducing OKR logic and allowing your organisation to carry out leadership sprints independently and successfully in just 6-9 months. From analysing your strategic objectives to training internal OKR masters, MLI is at your side.
Your success story begins now – use OKRs to put your strategies into action and bring your team to success.
Dare to use OKRs to effectively achieve your strategic goals. Arrange a non-binding consultation and discover the path to success with OKRs!
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