OKR = Strategy Execution 'Kiss of Death'
Mihai Ionescu - Senior Strategy Consultant, Owner Balanced Scorecard Romania, Author.
I have to admit that I'm more than fed up with all sorts of publicly-expressed opinions that associate OKR (Objectives and Key Results) with Strategy Management or Strategy Execution. I'm talking about statements like this:
'OKR is a great way to connect strategy with execution on a company and team level'
'OKRs are meant to set strategy and goals over a specified amount of time for an organization and teams'
'OKRs are strategic: an action plan to realize a vision. The OKRs provide the high-level strategic vision (and measurement criteria!)',
'OKRs are a practice for maximizing flow and productivity for a team, in a direction that’s aligned with enterprise strategy'
'Your OKRs should be translated from your strategy, drive the achievement of your vision, and be in alignment with your overall mission'
... and the stream of such nonsense seems to be never-ending.
Why would OKR be a 'smart' thing?
While at least one well-known OKR author (Christina Wodtke) considers OKR nothing more than a 'goal setting tool', some others even venture into calling it a 'framework'. But, after all, however you may call it, why would you think that OKR is a 'smart'thing, at least from a strategic perspective?
Because it brings in some glittering concepts, like 'moonshots' and 'roofshots'?
Because it states that goals can only be set (and expected to be achieved) on quarterly intervals, misunderstanding how 'frequent cycles foster agility'?
Because it recommends some weekly 'strategic' evaluation surrogates, like "Friday celebration of what's been accomplished"?
Because it brings in 'innovations' like the "70% is the new 100%", to avoid dealing with the over-achievement, completely misunderstanding what this might mean for the Strategy Execution?
Because an OKR template may shed over some subjectively-set priorities a glittering fog that mocks the systematic causality-based thinking?
Because putting everyone's OKR on the company Intranet gives the illusion of a transparent cross-teams synchronization of goals?
Because it 'stimulates focused conversations'... "This is my OKR, show me yours!"
Because it suggests that 'bottom-up' is better than 'top-down', in a deep misunderstanding of how the strategy-related dialogue works in an organization?
Why OKR can't be used for Strategy Management/Execution?
Because OKR has no process in place for consistently translating the Strategic Choices and the Strategic Value Gaps, resulted from the Strategy Formulation process, into Strategic Objectives
Because OKR ignores the essential cause-effect relationships between driving and driven Strategic Objectives
Because OKR has no valid philosophy for linking Strategic Objectives and Strategic Initiatives in many-to-many relationships
Because OKR has no mechanism for combining the anticipation of Lead KPIs (outputs) with the outcomes measured by Lag KPIs
Because OKR completely ignores the essential inter-play of Performance and Risk management, at strategic level, converging on Strategic Objectives' accomplishment
Because OKR provides no mechanism for defining targets for KPIs, in a way that allows their bottom-up aggregation to match the targets set for the top organizational goals that resulted from the quantification of organization's Success Aspirations
Because OKR completely ignores the monitoring of Strategic Hypothesis' validity and has no mechanism for updating objectives or initiatives, in the case that some hypothesis used for defining them prove to be invalid
Because OKR disregards any kind of Scenario Planning or Scenario Management thinking or methodology
Because OKR has no logic for breaking-down KPIs' long-term targets (e.g. annual) on measurement and review intervals (e.g. monthly)
Because OKR's fixed quarterly planning/execution intervals disregards the fact that some of the Strategic Initiatives require more than three months for been finalized and that their realization period may exceed a quarterly time-frame
Because it ignores the combined Vertical & Horizontal Alignment of objectives and initiatives, disregarding the internal-supplier to internal-customer relationships that create strong teams inter-dependencies in achieving their objectives
Because it has no mechanism for separating the signal from noise in measuring the strategy-related outcomes, without been obscured by the perturbation of periodic, seasonal or occasional non-strategic influence factors
Because the integration between the Strategic Planning and the Budgeting or Operational Planning processes was something that never crossed the mind of any of the OKR 'smart guys'
I think that these main arguments may be more than enough to support the statement that FOR STRATEGY MANAGEMENT OR STRATEGY EXECUTION, OKR IS 'THE KISS OF DEATH'!!
Unfortunately, the fate of this hype construct called OKR is to have a few more gasps and then meet the MBO (Management by Objectives) in the afterlife!
If you have any different opinions about the thirteen reasons why OKR should not be used anywhere near the Strategy Management/Execution process, or any other opinion on this article's arguments, please make you point in a more-than-welcomed comment.