May 2, 2022

OKR Superpowers – Part 2 – Alignment

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OKR Superpowers – Part 2 – Alignment

In continuation with the series on OKR Superpowers, here is the second installment that focuses on alignment. In the last blog in this four-part series, we talked about how OKRs enable you to focus and accelerate your strategic performance. Before we understand how to best use OKR superpower alignment, let’s talk about the challenges organizations face today. In most organizations, individuals, teams, and departments witness siloing of work. They neither know what others are working on nor can they understand how their daily goals’ execution contributes to higher-end organizational goals. This happens due to a lack of alignment.

Need for Alignment

  • In an organization, decision-making carries maximum importance. Well-aligned organizations make faster decisions, and execution takes less time too. The best part about alignment in an organization is improving work performance.
  • When employees’ key results align with the organizational strategy, they become more effective and engaged.
  • You need alignment to reduce costs incurred on wasted resources, furthering growth.
  • Employees can see their tasks, priorities, and decisions. Simply put, there is improved self-governance.
  • In an aligned organization, there are mechanisms to ensure that processes constantly deliver according to the expectations of clients and external stakeholders.

How Can Your Organization Achieve Team Alignment?

Top-down Approach

Cascading and Aligning OKRs

In an OKR framework, top-down alignment implies cascading your key result (KR) as a key result to the next-level direct report. In a typical top-down approach, the manager sets the objectives for the OKR. One or more key results of an executive can be the key result(s) of the leader next-in-line, so on and so forth. Here’s an example to understand this better.

Chief Executive Officer

Objective: Expand the business faster to emerge as a sustainable business leader

Key Result 1: $230M in bookings increased from $150M

Key Result 2: 86% gross revenue retained

Key Result 3: $970M Annual Recurring Revenue (ARR)

VP, Global Sales

Objective: Share value to increase the customer base

Key Result 1: $230M in bookings increased from $150M

Key Result 2: 50% win rate improved from 40%

Key Result 3: 25% of booking from upsells

In a simple OKR tool, once you assign the KR as a KR, the progress made at the KR level connects to the aligned KR’s progress.

Key Takeaway

Being the owner of an OKR, when you assign a key result to the direct report next-in-line, you accelerate your progress in accomplishing that KR and align their key results to attaining the higher-end organizational goal.

Bottom-up Approach

There are times when, in an OKR framework, alignment must come from the bottom up. An individual contributor may have a better insight into customers’ thoughts, not reaching the executive level necessarily. In Unlock:OKR tool, individual contributors can align with someone in their team, or other team(s), adding their key result as a key result to one or more of their objectives.

Cascading and Aligning OKRs

The new “conversation module” in this goal-setting software helps to exchange communication among the different employees of the organization, ideally the user, team manager, and contributor(s), in the form of text comments, about any given OKR.

Key Takeaway

Individual contributors, who are not a part of the C-Suite, have the freedom and power to add their managers and leaders as contributors to accomplish their KRs faster. Doing so also leads to easy goal achievement.

Highly aligned companies grow revenue 58% faster and are 72% more profitable when compared to their misaligned counterparts. *

A smart goal-setting framework helps you align individuals and teams well by creating a bigger purpose. As a company, when you set OKRs at the company level, you begin to create superordinate goals.

Superordinate goals take precedence over all other goals and lower-level goals. One can attain such goals only if the members of two or more groups collaboratively work by pooling their talent, skills, resources, and efforts. By creating organization-level OKRs and superordinate goals, teams competing for resources have a shared, common goal to create more cross-communication and collaboration, leading to more alignment than before.

Besides, clear and transparent organizational processes lead to better alignment. Once you have clear expectations on what you want in the planning and execution phases to stay aligned, you can hold that process and continue with the flow.

Is your Organization Leveraging OKR Superpower Alignment?

As a leader, ensure teams participate in the planning phase to plan superordinate goals. Employing the smart goal setting framework, you learn if individuals contribute and how their contributions lead to accomplishing that superordinate department or team goal. Besides, through execution, if there is the right amount of communication happening via team meetings and via a simple Unlock:OKR tool, individuals and teams stay aligned on how much they have progressed and where they lag. This leads to maximized execution and enhanced strategic performance for faster goal achievement.

Stay tuned for OKR Superpower – Rhythm, part-3 of this blog series.