In the 2015 Engagement Game, I discussed how OKRs can connect (or not) with long-term goals.
One of the best arguments for deploying Objectives and Key Results (OKRs) is the emphasis on a shorter cycle. More frequent review cycles lead to more rapid learning and more opportunities to make progress. Frequent reviews can foster a feeling of winning at work. You also get more places along the road to adjust course to focus on what’s most important.
However, the emphasis on a short cycle is often cited as a potential pitfall of OKRs. Are OKRs too short-sighted? How can OKRs be strategic if they look out only for a quarter? At Intel, OKRs were set monthly; pundits often argue that monthly OKRs are more tactical, and less about strategy.
Given that Objectives often change from cycle to cycle and Key Results almost always change, what does stay constant? We’ve all seen imagery for OKRs that feature an arrow hitting a target. But moving targets are hard to hit! So, with OKRs, where is the longer-term description of an organization’s strategy? The target that stays in place?
Some organizations set annual OKRs in addition to quarterly OKRs. But often they set annual OKRs at the company-level only. The power of Key Results depends on the shorter timeframe to get us focused on near term results. So, some organizations that set annual OKRs actually only set an annual Objective and leave the Key Results out.
I’ve not seen a standard solution for balancing the short-term nature of OKRs with the longer-term strategic goals of the organization. But, I can provide one equation designed to address this issue.
M + OKR = MOKR
In fact, I first learned about OKRs as “MOKRs” in a presentation entitled Never before Disclosed Oracle Planning Techniques.
“M” stands for “Mission” and it come first because it answers the fundamental question: “what is the purpose of our organization”
Having a clear mission, and aligning OKRs – whether monthly, quarterly, or yearly – to that mission, helps ensure that work performed in the short term, is meeting the long term strategic mission of the organization. Let’s look at an example MOKR and see how it enables OKRs to be defined within a longer-term context.
Ongoing Long-Term Marketing Mission: Provide the tools to enable the sales team to sell
Quarter 1 Objective: Deliver quality leads cost effectively
Quarter 1 Key Results:
- Obtain baseline ROI of marketing (Revenue/Cost for 5 conferences where we spent $50,000 or more in 2014)
- Achieve an overall cost per lead below $65 in Q1
- 30% of leads convert to opportunity within 6 weeks of creation
Marketing is focusing on just one Objective in Q1, and it may change the Objective in future Quarters. Examples of future Objectives might be: “Refresh marketing collateral to include new product ABC” or “Present the first comprehensive competitive analysis featuring new players in the mobile market”. Note that each of these Objectives supports the longer-term Mission.
When I first deployed MOKRs in a mid-sized software company with 5 business units and roughly 50 team leaders, the 10 minutes I spent with each manager to define their team’s mission was probably the best time spent in the entire project. The new CFO could now quickly read through a list detailing how each team believes they fit into the big picture. And the list was developed bottoms-up. That is, each team leader proposed their own. By making all the missions public, it was quite easy to see how each missions connected and were aligned throughout the organization.
I’d like to share the following MOKR exercise that I highly recommend completing BEFORE developing OKRs. For more on how OKRs (and MOKRs) can be used to drive better results and create engagement, look for my upcoming interview with the Engagement Game.
Set your Mission!
Exercise: At your next team meeting, ask every team member to write down their version of your team’s mission in one sentence. Then read each statement out loud. You might learn a lot. Plus, this 5-10 minute exercise will get everyone thinking about why they work and how they contribute to the larger picture. A great start to any OKRs (or MOKRs)!
Please post questions about how to combine OKRs with long-term strategy, and if you complete the exercise, please share your experience.