OKR

The Truth About OKR and Alignment

Last Modified: 27th August 2018

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Many books on OKR also mention the word alignment somewhere on the cover. As the leader of an organization, you are responsible for making sure your organization is aligned. But what does alignment mean? And how can a software product help you achieve that?

What is alignment?

Words like alignment are often used without a proper definition of the term. The risk of not clearly defining terms like alignment is that everyone develops their own interpretation of what alignment is. We all think we’re all talking about the same thing—but actually, we’re not. We’re misaligned.

The word alignment has its roots in Old French: àlignier. Lignier is derived from the Latin lineare, which means consisting of a straight line. Simply put, alignment describes a state where everything is positioned on a straight line.

That definition can be applied to a variety of use cases. When it comes to OKR, it makes sense to differentiate between vertical alignment and horizontal alignment.

Vertical alignment

Vertical alignment happens between Objectives. It ensures that all Objectives that are created in an organization contribute to each other. To fully understand how that works, let’s first have a look at top-down and bottom-up goal-setting.

Top-down and bottom-up goal-setting

Organizations new to OKR often ask how top-down and bottom-up goal-setting work. A common misconception is that all OKRs are created bottom-up, suggesting that employees are responsible for creating Company OKRs as well as Group OKRs. There may be organizations where this approach could work, but the truth for most companies is that it won’t.

I definitely see the value of collecting input from the entire team when creating Company OKRs, as I suggest in this blog article. However, as a leader, you are responsible for setting out the direction. You’ll have less knowledge about the details, but a better high-level understanding of what’s going on in the different areas of your business. Hence, as a leader, you have to make difficult trade-offs and decide on priorities. That’s what Company OKRs force you to do.

Once Company OKRs are known it is best to let Teams define their own Group OKRs based on those Company OKRs. This is a version of bottom-up goal-setting that works well in reality. In a top-down model, leadership would dictate Group OKRs as well as create Company OKRs. Though that might be tempting for some leaders, in today’s workplace it is much healthier to let teams create their own OKRs first; and to review them together.

Safeguarding vertical alignment with Perdoo

To achieve vertical alignment, Group OKRs should be in line with the Company OKRs. To ensure this, when teams create new Objectives in Perdoo, the OKR Wizard ensures Objectives are set up correctly. An important step in this wizard is Alignment. This step helps teams verify that the Objective they created is aligned with a Company Objective (though they could also align it to another team’s Objective).

What if a team cannot align their Objective?

If a team is not able to align their Objective they can skip this step. Objectives that are not aligned can be spotted on the teams’ Insights dashboard.

Can I align to multiple Objectives?

No. The point of vertical alignment is to make sure Group OKRs are aligned with, and therefore contributing to, Company OKRs. It’s a simple verification-step to make sure the Team Objective provides business value. Allowing a team to align their Objectives to multiple Objectives would create a lot of unnecessary work and complexity, without much for it in return. It would also prevent you from visualizing alignment in a meaningful way.

Horizontal alignment

Where vertical alignment happens between Company and Group Objectives, horizontal alignment happens amongst Group Objectives. To make sure that Team Objectives are not counterproductive but work in harmony towards common Company Objectives, you need to make sure that all OKRs within the organization are transparent and easily accessible to employees.

Software like Perdoo can, of course, help with that. You also need to make sure that Group Objectives are (vertically) aligned to Company Objectives. That way, everyone in the organization is able to see what all the different teams are focusing on in order to help realize particular Company Objectives. You’re then able to evaluate the horizontal alignment between the different Objectives on group-level.

In the example below the Sales team is focused on Finding the optimum demo experience for prospects in Q2, while Marketing is working in Q2 to Acquire as many demo requests they can. You could argue that is counterproductive: if Sales is figuring out what the best demo experience is, they probably need to test different approaches and spend more time per demo than usual. Marketing overloading them with demo requests is probably not going to help Sales find the best demo experience. It would be better for Marketing to move their Objective to Q3 and allow Sales to first figure out the best demo experience.

Become better aligned with Perdoo

Perdoo Maps has been designed to visualize alignment within your organization.

By clicking on a particular Company Objective, it unfolds the Group Objectives that are aligned to it. That way, you’ll be able to see what different groups are doing to realize that Company Objective (i.e. vertical alignment). And you can make sure that what different teams are doing is not counterproductive (i.e. horizontal alignment).

As an additional benefit, Perdoo Maps makes it easy for employees to see the bigger picture, and easily understand what the company and their team needs to achieve and how everyone is progressing. A simple but significant boost for employee engagement.

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