Unlock the power of OKRs with StratNavApp.com

What are OKRs?

OKRs, or Objectives and Key Results, is a goal-setting framework that helps organisations define and track their objectives and outcomes. An OKR consists of:

• Objective: A clearly defined goal that is ambitious and inspiring.
• Key Results: Specific, measurable actions that indicate progress towards the objective.

For example, if your objective is to "Enhance Customer Satisfaction," your key results might include "Achieve a Net Promoter Score (NPS) of 70," "Reduce customer complaint resolution time to under 24 hours," and "Increase customer retention rate by 15%."

OKRs in StratNavApp.com

• Goals like: Enhance Customer Satisfaction.
  Goals are usually longer-term and directional
• Objectives like: Achieve a Net Promoter Score (NPS) of 70 by 31 December 2024.
  Objectives are usually shorter-term and SMART expressions of goals.
• Key Performance Indicators (KPIs) like Net Promoter Score (NPS).
  KPIs are the specific data points you would collect to evidence progress towards your objectives.
• Targets like: 70 by 31 December 2024.
  Targets are specific KPI outcomes with a date by/time period within which you aim to achieve them.

This granularity gives a little bit more flexibility. The effect, however, is the same.

There are many-to-many relationships between Goals and Objectives, Between Objectives and KPIs, and between KPIS and Targets.

Once a target is achieved, you can simply set a new one for the same KPIs. Or, you could measure customer satisfaction using more than one Objective and KPI.

OKRs and Strategy

You can set OKRs for anything objectively measurable. The risk is that you end up with OKRs throughout an organisation which are not aligned, or worse still compete with or undermine each other.

One of the big problems experienced with OKRs is that organisations try to set them before they're clear about what their strategy is.

The way OKRs are embedded into StratNavApp.com ensures they are always linked to your strategy. In fact, you can't set OKRs that are not linked to your strategy. This helps to ensure that your OKRs always add up to more than the sum of the parts. That they always align towards the achievement of your strategy.

KPIs and Strategy

The same is true of KPIs. As the name implies, they can be used to track anything considered "Key". Often they are used to track business-as-usual performance metrics.

But they can be used to track strategic objectives too. And that's how we use them in StratNavApp.com.

Because of this KPIs and OKRs end up at the same place as far as strategy is concerned, and you can use the terms interchangeably.

We'll use both terms in this article. But you see that in most other places we talk about goals, objectives, KPIs and Targets as distinct elements.

Reasons for using OKRs and KPIs in your strategy

1. They force clarity: It's quite easy to sit around a table and agree that customer satisfaction is important. But when you decide that you will measure customer satisfaction using something like Net Promoter Score (NPS), and set a target outcome, it becomes much more real. Suddenly, people will start to debate the exact meaning of customer satisfaction, whether they think NPS is really the right measure of it, and how difficult it could be to hit the proposed target. Only once you've achieved all of that do you have real clarity about your strategy.
2. They provide feedback: Again, it's quite easy to sit around a table and talk about how hard you've been working to improve customer satisfaction and how the customers seem to be responding. But once you put a clear and objective number on the table it becomes apparent just how much the needle is or isn't moving. And, if is not moving in the manner desired, it becomes clear that you're going to need to do something different.

The origins of OKRs and KPIs

The OKR methodology was popularised by Andy Grove at Intel in the 1970s. Grove, a co-founder of Intel, adapted it from Peter Drucker's Management by Objectives (MBO) system. John Doerr, who worked under Grove at Intel, later introduced OKRs to Google in 1999. Since then, numerous successful companies like LinkedIn, Spotify, and Twitter have adopted OKRs to drive performance and growth.

The origins of KPIs can be traced back to the early 20th century with the advent of scientific management. Frederick Winslow Taylor, known as the father of scientific management, introduced time and motion studies in the 1910s. These studies aimed to improve industrial efficiency by measuring worker productivity and identifying the most efficient ways to perform tasks.

The modern concept of KPIs gained significant traction with the introduction of the Balanced Scorecard in the early 1990s. Developed by Robert Kaplan and David Norton, the Balanced Scorecard is a strategic management tool that uses KPIs to measure performance across four perspectives:

1. Financial
2. Customer
3. Internal Processes
4. Learning and Growth

This holistic approach enabled organisations to align their business activities with their vision and strategy, using KPIs to track progress and performance across different areas.

The advent of digital platforms

The advent of digital platforms, like StratNavApp.com, further revolutionised the use of OKRs and KPIs making it easier than ever to collect, consolidate and analyse the information behind them.

While many platforms focus on part of the process, one of StratNavApp.com's key strengths is that it provides end-to-end and integrated support from strategic analysis and diagnosis, through direction setting, planning and then tracking results - the ADPR cycle.

Crucially, it ensures that the results from your KPIs - whether you achieve your targets or not - to feed back into the analysis process ensuring your strategy and execution are continually adapting to the real world.

The power of a Strategy Scorecard

StratNavApp.com brings your strategic goals, objectives and KPIs (and OKRs) together into a single strategy scorecard.

With this, combined with the initiative status report, you will keep your finger on the pulse of your business and how well it is realising your strategy.

So, if you've not yet built one, sign in to StratNavApp.com and build yours now.

See also:

• Maximising Strategic Impact with Key Performance Indicators: A Guide
• Goals, objectives, KPIs, targets, initiatives and actions