Every team needs both strategy and tactics in order to succeed. But understanding the difference and using them effectively is a challenge. That’s where OKRs come in. This article delves into how OKRs can be an effective, simple, easy way to bridge the two.
Strategy and execution. Every team needs both in order to succeed. However, most teams face a dilemma when things get lost in translation. Strategy ends up turning into a labyrinth of tactics (that don’t necessarily align with each other). Many people can articulate their day-to-day tactical activities, but many can’t articulate the strategy. And a large portion of both don’t fully understand the difference!
In this article we’ll discuss the difference between these two and how OKRs can be an effective, simple, and easy way to bridge the gap.
What’s the difference between strategy and tactics?
Both terms originate from military terminology in Sun Tzu’s The Art of War. Strategies are directional and are a hypothesis about where we need to go, e.g., we need to capture that stronghold in order to secure this area. They are your action plan. Tactics are the specific steps that lead to the strategy (or that reveal if we need to change the strategy altogether), e.g., to capture this stronghold we need to increase on-the-ground forces, arm them with these specific weapons and strike during this time of day.
An example of the difference between strategy and tactics
Let’s say you’re a healthcare provider. Your strategy might be to improve the quality of care that your patients receive with their doctors. Your tactics might include training doctors in your network and providing them with specific care guidelines. But how do you track the trainings and what constitutes meeting the guidelines? This is where using OKRs (Objectives and Key Results) can really help (more on that shortly).
Dangers of confusing strategy and tactics
It’s common to conflate these two — and people often do. Without a clear strategy you can’t be sure your tactics are on point. And if you just have tactics, how do you know what impact they’re supposed to have without a strategy? Strategy is an expression of your North Star. The most effective tactics serve your strategy.
How can OKRs help strengthen your strategy and tactics?
Now that you see how strategies and tactics differ, let’s address a common problem: lack of alignment in an organization. How do you:
A. Help individuals connect their day-to-day work to high-level strategies?
B. Make sure everyone’s tactics align with each other?
OKRs can be an effective, simple, easy way to bridge the two. They articulate a strategy into goals to be achieved that then drive tactical plans. An Objective describes what needs to be accomplished and has a set of Key Results that describe how you’ll know when you’ve accomplished it. Because OKRs have measurable KRs, anyone can easily see if their tactics are leading to the intended outcomes (achieving the goals), and if those goals are aligned with the strategy — or if any of them need to change.
Beam Dental found itself growing from 60 to 200 employees in a very small window. Tension developed between teams and departments, even though they were supposedly trying to achieve the same goals. The CEO found that “each team had totally reasonable understandings of their vision, but they were frustrated they weren’t getting help from another team.” In other words, teams were anxious about not meeting their Objectives, but they couldn’t succeed without another team — which was already feeling pressure to make its own Objectives.
These were their Objectives for 2019 Company-Wide OKRs:
- Increase our Gross Margin to [XX]% by EOY 2019.
- Lower variable labor costs to 3.5% of premium.
- Understand “Total Cost to Serve” and Measure Everything.
What the CEO discovered was that their OKRs were really just KRs without the O. In other words, they put the tactics before the strategy, so they had nothing to align with or adjust.
De-emphasizing metrics in the top-level OKRs empowered the teams to come up with the measures of success. But most importantly, they identified the Objective of the strategy:
Objective: Scale Services to Improve Margins.
KR 1: Delight our broker partners with our product and service.
KR 2: Increase efficiency of new broker acquisition.
KR 3: Launch a new dental benefits product.
From this top-line OKR, each cross-functional team developed a set of metrics that they agreed would constitute “delight” and efficiency and what margins the new product would need to make to meet the Objective.
Step 1: Accomplish the mission by turning strategy into goals.
To get from strategy to (aligned) tactics, you first have to set goals. And as we see from the Beam example above, it helps to translate your strategy into concrete goals.
How OKRs turn strategy into action
OKRs keep focus on top priorities. They help simply answer: What’s most important to accomplish in the next year/quarter? OKRs can help link individual performance to corporate goals so everyone feels invested in their contribution to the company.
For these next few sections, we’re going to show how this works (or should work!)in government. Our elected officials lead through policy: The orders and laws they sign capture their vision for changing our country, states, and neighborhoods. But how do they ensure that the actions they prescribe lead to the outcomes they desire?
Step 2: Turn goals into tactics.
Once you’ve set goals that align with strategy, it’s time to set a tactical plan. A tactical plan is the sum of actions you need to take to achieve the goals. You’ll know you’re making progress whenever you ask, “Are our actions getting us closer to our goals?”
Back to our government example, policies are often only a list of directives: Rezoning an area. Setting fuel standards. Lowering tax rates. Increasing funding for transit programs. Directives are not outcomes or even tactics. These are actually more like goals, but how can you achieve these results?
Why OKRs are great for this
While you need tactics to implement your strategy, tactics don’t necessarily tell you how much progress you need to make — they’re more a collection of actions. OKRs help track what success looks like, and create transparency and common language around what counts as meaningful progress. If you’re behind, adjust the tactics. Or re-evaluate whether the metrics of success (and strategy) are the right ones to prioritize.
Let’s use an example of a manager in a local unemployment office who wants to help more people in a day.
Objective: Increase the number of people our office is able to serve each day.
KR1: Reduce the average form completion time to 15 minutes (from 45 minutes today).
KR2: Proactively reach out to enrollees before benefits expire, reducing re-enrollment rate 15%.
Here we see that each KR is measurable and specific, allowing for the manager to not only have something to track, but something to adjust upon should he or she not get the results they want or expect. Plus, this allows for staff to understand what they need to achieve and create the processes to get there.
Conclusion: Companies that have used OKRs to achieve their goals and strategies
The number of companies that have used and still use OKRs to achieve their goals is long, starting with Google. It was here that John Doerr introduced the concept (taught to him by Andy Grove). But Google isn’t the only company to implement OKRs to achieve unmatched success. Other companies include All Birds, the YMCA, Pinterest, Stitch Fix and many more.