Using the change management theory to execute on strategy practically

Many companies talk about strategic planning. Strategy and planning are actually quite different.

Planning, it seems, is a more established practice than strategy is. Strategy came afterwards.

Plans fill us with comfort because we have a list of activities that we can complete. Once we understand our abilities, we can fairly confidently predict the success of those activities. This drives productivity and efficiency. The success of our plans is up to us (mostly). We control it; we can decide where our resources go.

On the other hand…

Strategy can fill us with angst. The reason is that strategy is a hypothesis, a theory. You can’t prove in advance that your strategy will succeed. Strategy should create the ability to unlock future value through a competitive advantage. The market will show us whether our strategy is correct. Has our hypothesis proved true? Are customers buying our products?

Strategy is a set of coherent, actionable choices. Where we will play, how we will win, what we will need. More often than not, it’s a choice to move from where you are to where you want to be – it’s a choice to change. We don’t need much in the realm of strategy if we want to stay where we are.

And so, strategy is about change. There will be resistance to change. A denial or depression. A lull. Those involved in formulating, facilitating and implementing strategy in organisations are change agents.

This leads us to another well-researched topic: change management. Without a clear plan for change management initiatives, the likelihood of success is minimal.

John Kotter, a global thought leader on change management, purports that a change management process consists of eight stages. We’ll examine how these stages and their driving principles are engrained within the OKR methodology.

Step 1: Create the Urgency

Very few individuals are attracted to change – most steer away from it. Change agents need to be leaders – establish a direction and bring the required change to prepare for what few can visualise. They understand that change is necessary.

A sense of urgency needs to be created for this understanding to propagate.

How OKRs can help: OKRs create a sense of urgency through a short-term (usually quarterly) cadence. There are things a team needs to achieve this quarter to progress on their long-term strategy.

What if there’s not as much quarterly progress as expected? If there aren’t any implications of underperformance, it quickly leads to complacency, which is the enemy of urgency. To combat this, we must have a clear answer to the question, “what are the implications of an unexecuted strategy?”. And this message needs to be communicated over and over again.

Step 2: Assign the leaders

Change starts with senior leaders. Depending on the organisation’s size, this could be a group of 5 to 50 people, referred to as the guiding coalition. It’s important to note that this coalition, or “committee,” should not decrease the speed of execution (which is often associated with committees).

There are two important things to note here: First, the coalition’s members should have the power, expertise, and credibility to lead the change effort. Second, the coalition must operate on a trust foundation, and time, effort, and financial resources should be invested in building this foundation.

How OKRs can help: In the OKR methodology, we usually recommend starting with the senior leadership team. Then, to get the ball rolling, have an offsite meeting, which helps bring focus and build the foundation of trust. If OKRs are rolled out successfully here, this team becomes the internal evangelists for the change that is to come.

Step 3: Establish the ambition

The “change” we’re discussing is an imaginary future painted by a visionary who sees what few others can. This is the ambition. It describes the future that is in the best interest of most individuals affected by that envisioned future.

The vision or ambition maintains a delicate balance between clarity to motivate actions and openness to allow flexibility.

Most of all, it’s easy to communicate.

How OKRs can help: When we craft OKRs, we encourage teams to articulate their ambition. Why are you using OKRs, and what do you want to achieve as a team? Then, we spend a lot of time pushing for clarity in articulating objectives and key results.

Warning: John Kotter (the author) also warns that this step takes a lot more time than we think and often feels the least necessary. We can vouch for that – but equally, vouch for its importance!

Step 4: Communicate to everyone

Communication increases trust – further building the foundation we’ve talked about before. An organisation that operates on trust reaches a velocity that’s unmatched by those who have to wrestle with doubts.

Authentic communication is two-way—leaders need to talk, but they also need to listen. If the individuals have engaged with the vision, they will have questions, and that feedback might require a rework of the ambition.

How OKRs can help: Firstly, transparency is a core principle of OKRs—let the entire organisation see your OKRs. Secondly, OKRs are set top-down and bottom-up—leaders set the direction, but then teams set their OKRs aligned to that direction. Lastly, OKRs need to change behaviours. If they don’t change our daily language, they’re another reporting structure that increases the workload, which is the opposite of what would have been envisaged.

Step 5: Empower the teams

An organisation’s legacy – how we’ve done things in the past – could keep the team from achieving the change vision. A large subset of individuals – let’s call them managers – want to manage what they understand and will resist change. Leaders, however, will grasp the envisaged future and allow that change to infiltrate their ways of doing things.

Applying this practically means changing structures, skills, systems and supervisors.

• The structure needs to be comparable to the vision.
• Employees need to be trained to gain the requisite skills.
• Systems and processes should be aligned with the vision in the way they provide information and manage governance.
• And obstructive supervisors should be called out if they are restricting those who want to contribute towards the vision.

How OKRs can help: OKRs truly are a methodology that empowers employees to take action. It doesn’t detail the practical steps to take but rather the outcome to achieve. As a result, the team members understand what they need to accomplish and have the autonomy to find the best solutions.

Step 6: Generate real wins

It’s challenging to stay the course over long periods without any experience of traction. For this reason, generating and showcasing short-term wins are essential.

Generating short-term wins also builds credibility and trust. It shows the organisation that the team is committed and that actions align with the vision.

How OKRs can help: OKRs is an outcomes-based goal management methodology. We don’t focus on the tasks or output; we focus on adding value to the organisation in every cycle. At the end of each cycle, we should be able to celebrate one or two wins – something that can objectively be viewed as progress. With this focus on value-adding outcomes, the organisation can see that there is progress and that the change efforts have an impact.

Step 7: Consolidate the successes

We’ve mentioned the importance of celebrating wins. However, there’s a corresponding risk that you celebrate wins, teams become complacent, and the change doesn’t impact or proliferate throughout the rest of the organisation. An organisation is an organism—it’s alive and made of many different parts. No area is independent of the others. Even though they could be driven from one area, significant changes will depend on various parts of the organisation. These links must be made to consolidate gains and effect a long-term impact.

The role of leadership in this is two-fold: to ensure the vision is well-defined so that smaller initiatives are linked to the larger vision and to delegate the smaller initiatives to the rest of the organisation.

How OKRs can help: We talk about horizontal and vertical alignment in setting OKRs:

• Horizontal alignment ensures teams work together and avoid the independent changes mentioned above.
• Vertical alignment ensures what you work on is aligned with the vision.

Then, OKRs are focused on shorter cycles – usually quarterly, but there’s no “right” cycle in this regard. We want a cycle that is long enough for us to achieve something noteworthy, but  not too long that will cause us to disengage. Addressing alignment after every cycle – to consolidate the wins – is essential.

Step 8: Embed in the culture

Regardless of the amount of visible change that happens, an invisible culture shapes and drives the organisation. The culture consists of individuals’ values, mindsets, attitudes, and behaviours.

This culture is something that people step into as they join – it’s ingrained and created through years of operating together. It’s often so deeply ingrained that it’s unconscious for most individuals. Because it’s created through years of experience, it also takes years to change. But it can.

How OKRs can help: In this respect, it’s unrealistic to think that simply implementing a methodology like OKRs will change a culture. Implementing a “tool” like OKRs, or even teaching people to use the tool, will not lead to the mindset shift required for OKRs to be successful. If you believe in OKRs as an outcomes-based management methodology, it should be supported by an outcomes-based culture where employees are empowered and enabled to act autonomously. Don’t just implement OKRs – ensure that individuals and teams develop an outcomes-based mindset.

Change is permanent – it will always be there. Therefore, it requires a methodology and a habit or system to help teams deal with change continuously. Furthermore, constant adaption is essential – as you go on a change journey. OKRs provide a helpful resource to assist in some of the change management steps we’ve mentioned above – but it’s by no means the silver bullet to solve it all!