In the book Start with Why, Simon Sinek said a company operates on three different levels: what we do, how we do it, and why we do it. In previous articles, we have talked about creating and communicating the ‘why’. Now, we move on to the next challenge: the ‘how’.
If ‘why’ is the belief and ‘what’ is the end result, then ‘how’ is the action to bridge the two. The ‘how’ has two purposes: it transforms the inspiring belief to a more concrete form, and, by doing so, it creates consistency between the narrative (the ‘why’) and the product and/or service (the ‘what’) which serve as the manifestation of our belief.
Doing the ‘how’ is a challenge that needs to be solved. Once top management has defined the company narrative, how do they bring it to life? In other words, how do they make sure that everyone’s day-to-day tasks are based on the narrative?
We believe OKR can help, as shown in real examples below.
What is OKR?
OKR (Objectives and Key Results) is a powerful goal-setting framework to track objective and their outcome, while facilitating the discussions about how the work of an individual employee is connected to the overall company’s objective.
OKR was first developed by Andy Grove at Intel and was popularized by John Doerr. OKR has been proven to scale, as demonstrated by successful companies like Google, Intel, LinkedIn, and Adobe. Larry Page, the co-founder of Google, credited OKR for propelling Google into the successful company they are today, saying:
“OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of ‘organizing the world’s information’ perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most.”
Components of OKR
Two main components of OKR:
- Objectives, refer to the things that must be accomplished. It should be significant to the company and personally meaningful and inspiring. Example: Create an awesome onboarding experience for new customers.
- Key Results, refer to the steps that need to be taken to achieve the objective to which they relate. Key results should be measurable, limited in number and time-bound. Example: Average onboarding rating at 8.5 out of 10.
How OKR can bring a narrative to life
In order for OKR to work, the company will first need to set a top-line OKR. The top-line OKR will serve as a guide for the company as a whole, and because of that, the top-line Objective should be able to inspire everyone. Ideally, employees will be motivated to help companies to reach that objective; especially when work gets tough.
What better way for the company to create an inspiring Objective other than going back to their narrative? Their narrative is their inspiring belief. It reminds them of what they stand for. Going back to their belief helps to create a purpose-driven OKR. It should be aspirational, not just operational. It explains how the people involved within the company are making a difference, gives them a sense of meaning, and draws their support.
For example: in the 1950s, Sony created this narrative:
“We will create products that become pervasive around the world. We will be the first Japanese company to go into the U.S. market and distribute directly. We will succeed with innovations that U.S . companies have failed at — such as the transistor radio. Fifty years from now, our brand name will be as well known as any in the world and will signify innovation and quality that rival the most innovative companies anywhere. “Made in Japan” will mean something fine, not something shoddy.”
Sony translated the narrative above into a one-sentence objective:
“Become the company most known for changing the worldwide poor-quality image of Japanese products.”
Once the top-line OKR has been set, then it should be communicated and cascaded down to departments, teams, and individuals. This means every department, team, and individual is expected to have their own OKR that supports the top-line OKR. It means everyone is working toward the same objective, based on the company narrative.
At this point, the OKR might look like a top-down mandate, which begs the question: why not do a top-down mandate instead? In their article written in Harvard Business Review, Robert E. Quinn and Anjan V. Takor said top-down mandate will not work when a company is trying to connect the employee to their belief or purpose because:
“Employees need to help drive this process, because then the purpose is more likely to permeate the culture, shaping behavior even when managers aren’t right there to watch how people are handling things.”
With OKR, employees are encouraged to help drive this process by setting their own objectives and key results, which should align with the company goals. Their key results represent their voice, their input. They trickle upwards.
To recap: the company will first need to set a top-line OKR that is derived from their narrative. The top-line OKR then should be cascaded down to department, team, and individual. In this process, the company needs employees to help drive the process by giving them autonomy in setting their own Objective and Key Results which should support the top-line OKR. By doing so, the OKR framework can bring the narrative to life.