Companies are not scared to invest time and money into developing their strategies, and as practicing strategy consultants, we completely understand why. However, the investment often stops there – right after the well-thought-out strategy has been devised, articulated, and communicated. Does the team know how their day-to-day activities need to change? How do you start getting traction on this strategy as soon as possible? Can you track whether you’re making progress, or are not going to wake up in three years and realise that you haven’t moved at all? Or even worse – have moved backwards?
We believe that goal management is the missing link between strategy and action and is a crucial tool for strategy implementation. It helps break your longer-term ambition down into shorter-term goals – either quarterly, bi-annual or annual goals – to guide daily actions.
There are many different approaches to goal management – SMART, 4DF, Traction, BSQ, etc. So how do you know which one to use in your organisation? Hopefully we can demystify the goal management landscape for you, and at the same time tell you why we still favour OKRs.
The five building blocks of strategy implementation
In our experience – working with companies and coaches, in training and discussions – we’ve found that there are five building blocks that successful goal management methodologies have in common:
The first four building blocks relate to how you set and communicate goals. They ask: are your goals aligned to your strategy, have you identified your priorities and created focus, have you clearly and effectively communicated these goals, and have you allocated accountability and deadlines to each goal? Many approaches cover these four building blocks. The fifth building block, relating to the habits you create, is the major element that differentiates goal-setting frameworks from goal management methodologies.
An example of a goal-setting framework is SMART – Specific, Measurable, Achievable, Realistic, and Timely – which provides criteria that guides you on how to set goals. Other examples of goal-setting frameworks include 4CF, Locke & Latham’s 5 principles, BSQ and Cascading Goals. They help ensure that you set solid goals for your organisation. But just setting goals is not enough…
“Goals are good for setting a direction, but systems are best for making progress”
James Clear
The fifth building block helps your team build the ongoing discipline required to successfully execute your strategy. While there are fewer goal management methodologies that provide you with a more comprehensive system, they do exist. The ones that we come across regularly in the market are:
- Balanced Scorecard
- 4DX
- Traction
- Scaling Up
- …and, of course, OKRs
Below is a high-level overview of each:
Balanced Scorecard (BSC)
Developed nearly 30 years ago by David Norton and Robert Kaplan, the BSC model allows you to communicate your strategy and break it down into several short-term operational measures that will drive your long-term financial growth. It’s built on the foundational principle that ‘what you measure is what you get’ (Kaplan & Norton).
By using your BSC to measure your progress regularly, you now have data to inform the monthly strategy review meetings that the model recommends. Some of the questions addressed in this meeting are ‘why did we miss the target?’, ‘what correcting actions should we consider?’, ‘are initiatives on schedule?’, ‘do we need more resources?’ etc.
4DX
Developed 20 years ago by Sean Covey, Jim Huling, and Chris McChesney, the 4 Disciplines of Execution is described as a methodology that translates an organisation’s strategy into action and helps create a high performance culture. Its driving philosophy is that you need to beat the ‘Whirlwind’ –the ‘day to day business that crowds our action on strategic initiatives’. The disciplines help ensure that adequate time (at least 20%) is focused on strategic execution.
The four disciplines are:
- FOCUS – Focus on Wildly Important Goals (WIGs)
- LEVERAGE – Act on Lead Measures
- ENGAGEMENT – Keep a Compelling Scoreboard
- ACCOUNTABILITY – Create a Cadence of Accountability
Under the fourth discipline, the team needs to meet at least weekly to drive accountability and progress towards your goals.
Scaling Up
Verne Harnish was the creator of the ‘Rockefeller Habits’, published in his first book in 1999. The ‘Rockefeller Habits’ are described as the ten key habits that organisations should embrace to drive the successful execution of their strategies. They were created from the principles followed by John D. Rockefeller, who was the founder of Standard Oil. In 2014, Harnish wrote ‘Scaling Up’, which is described as ‘Rockefeller Habits 2.0’ where he breaks the habits up into four decisions that a leader must address:
- Attracting and keeping the right People
- Creating a truly differentiated Strategy
- Driving flawless Execution
- Having plenty of Cash to weather the storms
The third phase, relating to Execution, is the most relevant for this discussion, and is based on the Rockefeller Habits that are divided into the following three routines:
- Priorities – ‘Less is more in driving focus and alignment’
- Data – ‘Qualitative and Quantitative feedback provides clarity and foresight’
- Meeting Rhythm – ‘Give yourself the time to make better decisions’
The suggested meeting rhythm is annual/quarterly planning meetings, monthly management meetings, weekly meetings, and even 5 – 15-minute daily huddle meetings.
Traction (part of EOS)
Traction is part of a broader operating system called EOS – the Entrepreneurial Operating System® – developed by Jonathan Teller, Sanjiv Mehra, and Craig Dubitsky in 2006. It is described as ‘a complete set of simple concepts and practical tools’ helping organisations align behind one vision, gain traction on executing that vision through focus, discipline, and accountability, and help build a healthy leadership team. ‘Traction’ is the 6th step in the process and focuses on ‘taking the vision down to the ground and making it real’.
Its philosophy centres around creating the 90-day world – the period for which individuals can stay focused and on track. Within each 90-day period, ‘rocks’ (or goals) are set up and a meeting pulse is followed (annual, quarterly, and weekly meetings are held).
Objectives and Key Results (OKRs)
The OKR methodology addresses many of the same elements as the goal management methodologies described above, including creating habits to drive the ongoing discipline by the relevant teams. If fully adopted and embraced, any of the above methodologies will significantly contribute to the speed of execution in your organisation.
So what makes OKRs different? Here are a few reasons:
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The OKR methodology is flexible and can be used with other tools
OKRs focuses on the goal management and execution stage of your strategic process. 4DX, Scaling Up and Traction (or EOS) address the broader strategic process (including strategic execution). While there are benefits to adopting a full operating system (like the ones described above), often organisations are already using other frameworks and tools. OKRs can work alongside many other tools, including some of the ones discussed in this article. We’ve helped many teams on their execution journey through integrating OKRs and other frameworks.
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There are defined OKR cycles aligned to your organisation’s needs
Your organisation defines the length of its OKR cycle upfront as a team. While we usually recommend a quarterly cycle, it’s not always appropriate and a bi-annual or annual OKR cycle might be better suited. Whatever the length of the cycle, having a defined period to set goals for your organisations gets you into a rhythm and allows energy levels to be renewed through pausing to reflect and reset your OKRs. While Traction embraces the 90-day world, the other methodologies do not have defined short-term goal cycles (this however doesn’t mean that you can’t incorporate them into how you use the methodologies).
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OKRs are incredibly simple to explain
Objectives are inspirational and aspirational to drive engagement; Key Results are grounded in reality to ensure traction, and need to be specific and measurable. 3-5 objectives are recommended per team, with 3-5 key results per objective. They are concise but clear. There are many nuances that are explored over time – which tools to use, how to score Key Results, how to align goals horizontally and vertically, etc. However, because it’s so simple at a high level, it can easily be rolled out to the organisation to gain wider contribution into executing on the strategy.
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OKRs create focus on short-term goals
Some methodologies do not give detailed guidelines on how to articulate the goals, with both the inspirational element (Objectives) and the key measures to track your success (Key Results)’. Because OKRs focus on goals, much work has been done to understand how to articulate goals to create clarity. Other methodologies include so many other elements that there isn’t the same amount of attention on articulating goals.
After much research, we developed our list of the ten principles of strategy implementation. Many of the above-mentioned goal-setting frameworks and goal management methodologies address most of them. OKRs, however, address them all and address them well.
Having said this, each of the methodologies that we’ve discussed can get your organisation to the next level, provided that you comply with the ten principles and make sure to create the right habits within your organisation.
