OKRs or Objectives and Key Results are everywhere these days. A lot of the companies jump onto this trendy bandwagon but do not have the right base for their OKRs. For it to work, it has to have a strong base in vision and strategy. If you want to start using OKRs as they were intended to be used, you have to take a couple of steps back and start with your vision and strategy.
Vision – important and tough topic
Recently I’ve read Arnold Schwarzenegger’s biography and he says that the success of a movie was always dependent on the director having a clear vision from the start. James Cameron had a clear vision of his Terminator, John Milius had a clear vision for Conan.
Company is a creative work. Creators of big companies like Tomáš Baťa didn’t look only at their product, shoes in this case. He was developing a company and also the people in it which he saw as a prerequisite for putting a successful product on the market. Moreover, he first looked at himself. “If you want to build a big company, first build yourself”, says the immortal Baťa in his famous quote. He was able to captivate his colleagues with his personality and his vision. A lot of the founders that I meet have the energy and passion for their idea, product, or service at the start. In the beginning, you’re basically jumping on a train of solving problems that you have to react to. Where do we get the orders? Where do we get more people? Where do we get more time? Where do we get more money for research? Where do we get more space? Where can we get even more orders? And so the cycle continues. And if everything goes well after a couple of years we wake up in more or less a successful cycle. The part of the brain that we like to preferably use wasn’t evolutionarily equipped for finding and achieving some kind of a fuzzy vision somewhere in the future. Our brain perfected itself in a reactive approach towards what was happening right now. Even our future planning is based on the extrapolation of something that we know, something that we’ve experienced. Creating a “vision” is therefore often a process of calculating goals based on some marketing analysis and financial results from previous years. It’s like driving a car by evaluating only what we see in the rearview mirrors.
When I was a manager in a corporation before we founded RainFellows, my boss once told me: “Most of the managers that are successful in a corporation are climbing the corporate ladder upwards just because they are very good at putting out fires”. That was 11 years ago and so far this is still true today.
Leader as the individual carrying the vision
The most crucial and the most conflicting change that happens during Agile transformation is moving the individual responsibility from one person (the manager) towards the team or more people. This is happening not only in Agile organizations but in even more modern organizational models that are in line with the 4th level of tribal leadership. For example Holocracy, Teal organization, or Semler’s Semco. In all these models of “the future” what stands true is that the role of a leader is to make everyone in the organization more competent, bringing them into what’s happening in the company and making them all responsible for the result. That’s what Baťa did 90 years ago.
Traditionally we see a leader, a founder of the company, as a person who defines the vision and brings in people who want to be on the journey together with him. In the case of a bigger company, this ownership is expected from the CEO. But how to work with this in an Agile, open organization? How do you bring people into the process of defining the vision?
The strengths of the organizations that are building the culture of level number four is in people being involved and taking part in everything. As a leader, I’m not working only with my rational and marketing analyses which are often missing the emotional part and the real essence of a vision. When I’m looking at a company as a whole, I’m listening to its voice and where a company is heading or wants to be heading.
Paralysis of defining a perfect vision
The risk of such an approach in organizations that haven’t reached stable level four is that during the process there is a so-called “communicational debt”. Skeletons are coming out of the closet and the whole process takes much longer. Also, the desire to avoid conflict leads to a tendency to reach a trade-off and the result is again a vision without the needed driving energy. If we combine the risks with the fact that no one has a crystal ball and doesn’t see the future, the whole process can take months and the perfect vision is nowhere in sight. The next morning we still feel like “This is not it yet”.
How do we avoid such paralysis? What works well for us is the approach of creating the vision as Agile development, meaning selecting all the stakeholders that should take part in the process of defining the vision because they are the primary “consumers” of it in the end. Making them the co-creators and also bringing in the key people in the organization into the process of the creation.Then in iterations define the versions of a vision until they become the MVP. Timebox the whole process to a maximum of 3 months and then move on to validation.
Product owner of this “product” of a vision is of course the CEO
Vision, strategy and OKRs
OKRs or Objectives and Key Results are very trendy at the moment. It is a very simple framework, similarly to user stories that’s a very basic format for writing down requirements in the backlog. However what is very difficult is the good content behind the framework. Objective – the first letter in the acronym OKRs should be built on the same path towards the long-term goal. This specific path, out of all the possible ones, is our chosen strategy. Vision specified in the form of a long-term goal and strategy are then the starting point for defining yearly OKRs and they are the starting point for defining the quarterly OKRs. Of course if you’re working in such a cadence.
I was saying earlier that it’s a good practice to timebox the creation process. Even though the cision is not final or perfect, after two or three iterations, we usually have good enough content for defining the strategic areas and out of them, we can find the OKRs on a yearly and quarterly level. Instead of endless speculation about the vision and the strategy we start the execution towards that strategy. It is on a quarterly level that we can react to the outside (market, acquired resources) or inside changes (people and their competence, capacity etc.). Implementing the OKRs, quarterly evaluation, and redefining the goals at QBR then makes the strategy a living iterative process. Similarly as in the product world, it pays off to follow the Agile process. In case of the vision and strategy, it has the same complexity where the Agile process fits very well. I deeply believe that these days you can’t do it any other way. Even without covid there was a significant trend in the changes on the market happening much faster and covid brought it to another level. We’ve experienced it in the form of demand for Agility outside of the IT industry – specifically on the management level. In the Czech Republic, this demand was started by the banks a couple of years ago and at this point we even have manufacturing companies asking for guidance with Agility.
Start with yourself
In the beginning of RainFellows, in 2013, we were fired up after leaving the corporate world. It was a mix of fear and excitement from the new journey ahead – building our own company. We have created a vision of what kind of a company we want RainFellows to be. Nobody was defining corporate goals and there was no framework that we had to fit into. It was the first time this was solely up to us. But there was still something internal that was holding us back. There was an exercise called the threshold of believability that we tried during the process of creating the vision – this is how it works:
- We’ve defined the vision – a description of how the company would look in 5 to 7 years
- We’ve asked ourselves a question: When do we believe with unbreakable certainty, just like that the sun comes out every morning, that this vision can be achieved? Some of us said 5 years, some 7 and some 10.
- Then we’ve asked ourselves another question: What negative beliefs make this time longer? We’ve put the fear of not having enough customers on the table.Then there was fear that if we give it everything our families will then suffer.
- If we were able to make sure that we have enough cases and our families are OK (not taking into account how we achieve that yet), how long until we can make this happen? And the time frame was shortened by a couple of years!
We’ve repeated the process until we were still coming up with new limitations in our heads.
Then in 2016, we wanted to take our 4-person company to another level. We’ve felt that this is not it. The original vision was that we are a quartet of RainFellows and this is how it’s going to stay forever. But this is what limited us. We had that belief in our heads that no one can be like the 4 of us. That we are like a music band and the clients see us as an extraordinary supplier – we are not individuals, consultants on a contract nor are we a big anonymous consulting company. But between those two extreme options, there are a lot of options and variants. But we didn’t see them because of our beliefs. What helped us was an outside perspective. I personally believe that a medical doctor (consultant) cannot treat himself or his own family (company). At that point in time, BusinessCon helped us – a platform where founders of companies meet and that we started in Ostrava. Thanks to the feedback we received, we’ve changed our beliefs and now there are 8 of us as full-time employees plus Lenka as our CFO. Currently, we are also onboarding the next consultant. We’ve been able to triple our revenue. The belief that we cannot be the extraordinary RainFellows with a bigger team wasn’t true.
In the beginning of 2020 we wanted to take RainFellows to another level. We had big plans for international expansion. The strategy of Global RainFellows is what we’ve called it. And then covid hit. We quickly focused on making our services online-ready. We’ve created brand new games and workshop structures that could be used in an online environment but in the case of role-playing simulators, it was actually an advantage.
After we were able to sustain the first wave of the lock-downs, we went back to our Global RainFellows strategy. Because I still believe that what you need is an outside perspective, we’ve taken advantage of an offer from MSIC and their program called Expand. As a part of this program, we had a consulting session set up with Tomáš Kratochvíl. Tomáš helped us in uncovering our wrong belief upon which we were building our strategy – that we had to expand because the Czech market is too small.
The next discovery was realizing that the goal we had didn’t reflect our deep and real motivation. Our goal was 50 million Czech crowns in revenue. And Tomáš’s question was: “So what?”
And this is where we realized that even in OKRs it’s not a good idea to have a goal based on money. The emotional part was missing there so we went deeper. After going deeper we found the real purpose of why we do what we do. We want to achieve that for example in Forbes or Time Magazine or clients talk about us and the collaboration with us is crucial for their success. Everyone in RainFellows, and for me personally I feel is very strongly about this, we come alive when we are in contact with our client – that’s our passion and our passion has to be imprinted in our vision
This Global RainFellows strategy is parked for now and instead of that we’ve defined the quarterly goal and the activities that immediately validated the assumption about the size of the market. Thanks to the demand for Agility across industries we’ve realized during the research and subsequent sales activities that the market in the Czech Republic is big enough to be able to fulfill our goals and in the end the vision.
So what would be my recommendation, based on our experience, if you are in the process of creating vision and strategy?
- Take Vision and strategy just like it was a product of an Agile development
- Use OKRs and QBR framework for Agile execution of the strategy
- CEO is the owner and he collects the inputs from internal and external stakeholders
- Look for beliefs that limit the defining and fulfilling of your vision
- Invite somebody from outside of your company that will help you uncover those beliefs
What do you think about it? What worked or didn’t work well for you? I’d be glad if you could share it with me.