Alignment is one of the fundamental concepts behind OKR which we’ve covered in a previous post, The Truth About OKR Alignment. A question that comes up a lot is “should I align a Group Objective to a Company Key result”. This post aims to provide an answer.
A Company OKR communicates a strategic outcome the entire organization wants to achieve, as well as its criteria for success. By looking at these criteria for success it’s easy for a team to decide for example, “if the company Objective is to “Expand our operations internationally” and a Key Result is to “generate $1million dollars in revenue in the US”, then we need to figure out how to generate $1 million dollars in the US.
That should be our Objective.
It’s a simple logical jump to decide to create a Group Objective “Generate $1million dollars in US revenue”, and align this to the Company Objective “Expand our operations internationally”. By doing this the team is making a commitment “achieving this Key Result is what we’re going to do to contribute to this company Objective”.
So far so good.
However, unless the Sales Team have gone through the exercise of thinking about all the possible outcomes they could achieve to “Expand our operations internationally”, they may be missing critical factors that stand in their way. Instead, they’ve simply picked a result they want to achieve, not an outcome that will contribute to the Company Objective. Worse, they’ve turned a Key Result into an Objective that includes a metric and doesn’t include any inspirational language. This goes against a couple of the core principles of OKR.
The purpose of an Objective is to set a direction and provide an answer to why the Key Results measure success. On it’s own the Objective “Generate $1million dollars in US revenue” provides no clue as to ‘why’ generating $1million is important, or how will make an impact. Answer that question and you get; ‘because we want to “Expand our operations internationally”. You end up with exactly the same Objective as the one you’ve decided to align to.
Now have a Key Result as an Objective, what Key Results are you going to use to measure its success. Another big problem.
Faced with this most people turn to tasks, projects, and jobs-to-be-done and create these as Key Results. They ask the question, now we have to “Generate $1million dollars in US revenue” what do we need to do? Completing an action or task is very different to achieving a result. We call these Initiatives and have written about them in detail here.
So now the sales team have something they think is an OKR that’s not an OKR. It has a result as an Objective and a list of tasks as Key Result. Not great!
Always start with Company Objectives when creating Group OKRs.
If the Sales team explore their options and start by choosing a Company Objective to align to rather than a Key Result, the process of setting their own OKRs becomes much more creative. With a clear Objective in mind, “Expand our operations internationally” there may be a number of Objectives they can create to contribute to this. “Scale our current Sales team to support international markets” might be one choice.
Now, when they start thinking about indicators of success for their Key Results, revenue might not be a deciding factor. “Reduce time to onboard new hires from 4 to 2 weeks” might be one Key Result. “Maintain 100% availability of Sales Reps in 12 languages” might be another. “Reducing time-to-close from 90 days to 60 days for international customers” might be another. All these Key Results are also much broader in scope than “Generate $1million dollars in US revenue”, and better align with the Company Objective
These Key Results now represent how the Sales team views their barriers to success in moving the Company Objective forwards, as much as they indicate what metrics will tell them they’ve been successful.
Aligning Group Objectives to company Key Results is a bad idea for a couple of reasons. First it limits the scope of teams when considering the outcomes they could achieve that have the biggest impact. If you’re creating a Group OKR, always align it with Company Objectives. Focus on how the outcomes you want to achieve, contribute to moving your company Objectives forwards.