Getting Company-Level OKRs Right
Creating overall organizational-level or company-level OKRs is often the very first step for an organization getting going with OKRs. Even before drafting OKRs, there’s a often a deep need to understand the basic “structure.” It can be really difficult to figure out which structure will work best. To address this challenge, I advise organizations just start drafting OKRs; and just let the ideal OKRs structure emerge rather than debate over theoretical frameworks. If the company-level OKRs structure is not simply a “1-size fits all model,” we need to ask: what are these structures and which one’s best for my company?
Let’s start with two of the more common approaches based on my experience topped with dozens of organizations that are launching or re-launching OKRs.
I’m seeing trends in the kinds of questions that need to be answered in order to define and select the best OKR structure. Some OKR users are referring to this “structure” as their “OKR Architecture.” While it may be obvious, I’m finding that the characteristics of an effective OKR at the company-level tend to be quite different than the characteristics of an effective department or team-level OKR. In Objectives and Key Results: Tips from an OKRs Coach, I focused on the effective characteristics of team-level OKRs. In the OKRs book I recently co-authored, you can find distinctions between characteristics of effective organizational-level OKRs as well as team and individual-level OKRs.
Before diving into company-level OKRs, I’d like to note that we may not even have top-level OKRs at all. I recently trained a business unit of a leading Fortune 500 company that chose to not define top-level OKRs. We recommended the business unit define an overarching set of OKRs, but to no avail. Rather than defining top-level OKRs, our client chose to define OKRs for various “Squads” which were more like “shared objectives” so as to foster collaboration across teams.
Let’s look at some concrete examples of how organizations of all sizes are setting up OKRs at the top-level.
Case 1: Sears Holdings Corporation (SHC)
Overall, SHC does not use OKRs at the top-level. Rather, they have “priorities.” These company-level priorities are:
- Deliver a Wow member experience
- Become the world’s greatest integrated retailer
- Build a team of engaged associates who embrace change and technology
- Operational excellence to drive profitable sales
These four Priorities are really “Objectives” in the OKRs sense. SHC does not define Key Results for these four “Priorities.” Rather, they are very high-level strategic statements that serve as guideposts. Teams do set OKRs; however, the focus is really on defining OKRs at the individual level where 60-70% of individuals have opted in and created their own OKRs. For more on Sears Holding Corporation, check out the recent webinar.
Analysis: This approach is super-focused on bottoms-up origination of OKRs with an opt-in model for individuals. While there is strategic guidance from the top, “the top” is not actually defining OKRs. OKRs come into play at the SVP or VP level, but not at the company-level.
Case 2: Mid-sized Software Company (Client Name Confidential)
Prior to OKRs Coaching.
This high-tech organization with several hundred employees had already deployed OKRs. However, they didn’t feel their use of OKRs was optimal, so they called me in. The OKRs template looked like this
- Four Company Objectives with each team adding 1-3 Objectives as sub-Objectives for a given company Objective.
- CEO identifies most important “sub-objectives” (the total of “important” represented roughly 10 sub-objectives)
Worksheet Two: High Priority Initiatives
Worksheet Three: Priority Initiatives
Each sub-objective has dozens of action items, or “initiatives,” with each initiative rated as a one, two, or three depending on priority.
This approach was designed to hold people accountable to complete the tasks that they signed up for and ensuring everyone was working on initiatives that connected to company-level Objectives. There was no actual use of “OKRs.” So, I’d argue that this organization was not actually “already doing OKRs.”
After OKRs Coaching
The Company had four annual OKRs and the team-level OKRs on a single worksheet. This client developed an interesting way to visually align organizational and team-level OKRs. Rather than setting up a separate worksheet for each of the 20 teams, the company broke out each of the four annual Objectives into quarterly “sub-objectives.” Teams choosing to create OKRs defined Key Results to align with “sub-objectives.” Color-coding was used to show how the sub-objective aligned with the overall company-objective.
This approach is a super-cool way to reduce “silo-effects.” It does feel like it’s a “cascading model” as each team aligns directly to company-objectives. However, teams still can use Annual company objectives to co-create “sub-objectives.” Therefore, this approach does have bit of bottoms-up input. Teams often had great reasons to opt-out of the OKRs creation process. For example, one team didn’t have a VP position filled. Several other teams like legal and finance felt that their team was all “business-as-usual.” These teams did not find value in setting OKRs.
Look for more approaches for setting top-level OKRs in future posts. Please contact me, [email protected], to share your approach to setting company-level OKRs.