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Many organizations are implementing OKR in order to improve alignment across their organization. They want to make sure everyone is pulling in the same direction. But for OKR to boost alignment, you first need to get your strategy in place.
What is strategy?
Strategy is a military term and comes from the Greek words “stratos” (army or resources) and “ago” (leading). In a military context, strategy thus means to lead your resources to win the battle. A proper business definition would be: to lead your resources to obtain your organization’s goal.
Strategy matters because each organization has finite resources and faces competition. Were resources infinite, you wouldn’t need a strategy — your company could simply do everything it wanted to. And without competitors, there wouldn’t be a need to differentiate yourself. But with limited resources and the constant threat of competition, strategy becomes critical and (tough) choices will have to be made.
But before those choices can be made, you first need to decide which battle(s) you want to fight and what winning looks like.
The Ultimate Goal: define your playing field
Your Ultimate Goal defines the ultimate winning aspirations for your business. Which battles will you fight, and which will you leave alone? When will you consider the battle won?
A good Ultimate Goal answers 3 questions:
- What’s the purpose of your organization?
This is also called your organization’s mission. It explains why your organization was created in the first place, which problem it is solving.
- For whom is your organization fulfilling that purpose?
The problem your organization is solving potentially applies to many people and/or organizations. You can’t serve them all. Pick the (customer) segments that are most important to you.
- When will you consider your venture a success?
This is often called your organization’s vision. It says a lot about what you want your organization to become, and explains when you will have won “the battle”.
Here are a few examples from our clients:
- Help SaaS businesses know their customers. Be market-leader in Behavioural Analytics.
- Be the leading construction company in Canada by building infrastructure that people depend on.
Perdoo’s Ultimate Goal
At Perdoo, our Ultimate Goal is to help ambitious organizations accelerate or sustain their growth, and be the leading OKR platform in Europe and North America.
Let’s break this down:
- Our purpose is to help organizations sustain their growth.
- We’re doing that for ambitious organizations in Europe and North America. While we’re honored to have customers in more than 70 countries, we’re focused on leading in Europe and North America.
- And, we want to be the leading OKR platform in those regions. That’s what winning looks like for us.
Our answers to the 3 questions explain to everyone in our team what our playing field looks like and what it takes to win. The impact of these choices is huge. For example, while local players in lower-income countries may copy us and undercut our price, these aren’t battles worth fighting for us.
Over to you
What’s the Ultimate Goal of your business? Sign up for a free Perdoo account and start sharing with your team what your organization is all about!
Strategic Pillars: deciding how to win
Now that we know where we’re playing and what winning looks like, it’s time to figure out how to win. Our how-to-win choices explain how we (aim to) differentiate ourselves in the market; why customers choose us over the competition.
These choices are directly connected to your Ultimate Goal: they explain how to win on the chosen playing field. Change your Ultimate Goal, and you’ll have to revisit how to win on that new playing field. Your Ultimate Goal and Strategic Pillars are, therefore, jointly called your “strategy”.
Your how-to-win choices will be the pillars that will support your Ultimate Goal. You should aim to have 3 to 5 Strategic Pillars.
Remember the Canadian construction company from above? Their Ultimate Goal was to be the leading construction company in Canada by building infrastructure that people depend on. These are a some of their Strategic Pillars:
- Be committed to H&S and sustainability in all aspects of our work.
- Put D&I at the heart of our high-performing workforce.
- Be a company that clients love to work with.
The Ultimate Goal of the behavioral analytics company above was to help SaaS organizations know their customers, and be market-leader in behavioral analytics.
Their Strategic Pillars include:
- Deliver the fastest analysis for every user.
- Be self-serve at every stage of the journey.
- Build a culture where each employee learns and thrives.
Now it’s your turn
What are the Strategic Pillars for your business? Sign up for a free Perdoo account and start communicating your strategy in a way that everyone understands!
Keep it simple
To both your Ultimate Goal and your Strategic Pillars applies: keep it simple.
While it can be really hard to find the right answers for your business (large enterprises pay strategy consultants like McKinsey millions in fees to help them find those answers), the questions themselves are simple and require simple answers. You’re not going to realize your organization’s Ultimate Goal all by yourself, and you’ll need the entire organization to realize your strategy. It’s therefore critical that everyone — yes, everyone — in your organization is able to understand it and recite it. Only then can they make sure that whatever they are working on every day, is helping your company move in the right direction.
Amazon’s founder and CEO, Jeff Bezos, is one of the masters of this art. From Eugene Wei, who worked on the product there: “What stands out is that I can recite these from memory even now, over a decade later, and so could probably everyone who worked at Amazon those years.”
According to research by WillisTowersWatson, 90% of general employees and 40% of managers do not know or understand their organization’s strategy. Fix this, and you’re miles ahead of your competition.
Your strategy (ie, your Ultimate Goal and Strategic Pillars) will serve as the foundation that will inspire all the KPIs and OKRs that your organization will be working on. That’s why it’s so important to track your strategy and goals in the same place: it enables everyone to see the bigger picture and if what they’re doing is aligned with it.
Note that Strategic Pillars are different from OKRs because they don’t have a due date and you can’t add Key Results to them. Why no due date? Your strategy isn’t time-bound. So the success of a Strategic Pillar is measured through KPIs, which (unlike Key Results) don’t have a due date.
As the only OKR tool that enables you to accurately reflect your strategy, Perdoo gives you a level of transparency and alignment that you won’t find in any other tool. Perdoo empowers you to communicate your strategy in a way that everyone understands, enabling your teams to align their goals, and allowing you to see how your strategy turns into results. Finally, you’ve bridged the strategy—execution gap!