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OKR Fundamentals Email Course

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Our OKR Fundamentals Course will help you:

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<a href="https://quantive.com/resources/articles/okr-meaning">OKRs</a> are&nbsp;a collaborative <a href="https://quantive.com/resources/articles/goal-setting">goal-setting</a> methodology enabling teams and organizations to reach their goals using identifiable and measurable results. By design, <a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer">the OKR framework</a> works across teams to create a standard the whole company can adopt.However, knowing how to write OKRs can make or break <a href="https://quantive.com/resources/articles/how-to-implement-okrs" target="_blank" rel="noopener noreferrer">OKR implementation</a>. Why? Because the quality of your OKRs can affect the achievement of your goals in the long run.&nbsp;In this article, we'll cover how to write OKRs and master the art of creating effective OKRs by discussing:<ul><li>Why clarity and transparency are fundamental to writing OKRs</li><li>How to write objectives</li><li>How to write key results</li><li>The winning formula for writing OKRs</li><li>Common OKR writing mistakes</li><li>5 steps to writing great OKRs</li></ul>Let's get started.

Well-written OKRs give you a sense of direction, enable you to focus on what’s truly important, and help you get your priorities straight. They also make it clear to everyone within the organization what a team or individual is working on at a given time — transparency check!&nbsp;And let’s be honest, it will be so much easier for your company to execute OKRs if they are set the right way. Well-written OKRs mean a well-outlined path to achieving them. You’ll feel confident about not only where you want to go but also how to get there. Moreover, you’ll be able to track the right metrics, enabling effective decision-making.&nbsp;On the other hand, writing OKRs poorly can undermine the hard work you put in to reap the benefits of OKRs. Writing unclear, difficult-to-grasp OKRs that are not in line with best practices can be a recipe for disaster. If your OKRs fail to convey your highest priorities clearly, you risk spending precious time on the wrong activities. Plus, it can be quite demotivating and costly to put your time and effort into something that doesn’t contribute to the bigger picture.&nbsp;<hr>Find out the <a href="https://quantive.com/resources/articles/okr-mistakes" target="_blank" rel="noopener noreferrer">20 Most Common OKR Mistakes</a> and how to avoid them<figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/okr-mistakes" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611665/site-v5/common_OKR_mistakes_39f82a0196.png" alt="an exclamation point graphic representing common OKR mistakes.png"></a></figure><hr>

A good OKR structure comprises a clear, aspirational objective that sets the high-level direction of the goal. This is supported by two to four key results that are specific, time-bound, and quantifiable. Using this OKR structure, you create a sense of purpose while ensuring your team's efforts are focused and aligned with achieving the objective.

By nature, objectives should be inspiring, easy to remember, and qualitative. Objectives are what you will accomplish and should express your intent, ambition, and aspiration. When writing objectives, think about whether the objective evokes emotion. You want the team to look at that objective and say, “yeah, I want to help get that done.”&nbsp;Typically objectives are stated monthly or quarterly. We recommend having no more than one to three objectives per team, per quarter, but the exact quantity you have depends on the needs of your organization.&nbsp;The situation you want to avoid is having so many priorities that you actually have no priorities. And lastly, make sure it’s short, punchy, and concise so everyone can understand it.&nbsp;&nbsp;<blockquote>OKR writing tip: When stating objectives, push yourself to think about why achieving the objective matters.</blockquote>

To measure progress towards your objective, you need to set quantitative key results. When writing OKRs' key results, state these definitively using a metric. Defining key results using metrics with numbers makes it easy to communicate progress toward accomplishing your objective in a meaningful way.<blockquote>It’s not a KR unless it has a number.&nbsp;- Marissa Mayer&nbsp;</blockquote>Additionally, key results should be outcome-focused instead of task-based, describing the optimal outcome that needs to be accomplished to complete the objective — without constraints surrounding how it's achieved.&nbsp;Again, we don't recommend more than three to five key results be stated per objective, but the exact quantity depends on your business. The good news is that it’s easy to change your statements later, and it takes practice to get a rhythm for defining your objectives and key results.&nbsp;

When it comes to creating and writing good OKRs, consider the following formula:&nbsp; &nbsp;<figure class="image image_resized" style="width:75%;"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1681149760/site-v5/OKR_1_62c20da1c7.svg" alt="OKR formula illustration: We will (objective) as measured by (key results)"></figure><h3>Objective formula</h3>Objectives should be:<ul><li>Actionable</li><li>Time-bound</li><li>Ambitious</li></ul><figure class="image image_resized" style="width:75%;"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1681149827/site-v5/Objective_d50eb6273b.svg" alt="Objective = Verb + What you're going to do or achieve (business impact) diagram"></figure><h3>Examples of objectives</h3><ul><li>“We will accelerate sales growth in <a href="https://quantive.com/resources/articles/okrs-in-business" target="_blank" rel="noopener noreferrer">Small-to-Medium Enterprises</a> this quarter”</li><li>“Ship an amazing MVP!”</li><li>“Have super successful pilots with X and Y and Z”</li><li>“Solve our support ticket crisis”</li><li>“Move from monthly release to continuous release process”&nbsp;&nbsp; &nbsp;</li></ul><h3>Key result formula</h3>Key results should be:&nbsp;<ul><li>Black and white</li><li>Quantifiable — whenever possible, use metrics instead of a binary result</li><li>two to four per objective</li></ul><figure class="image image_resized" style="width:75%;"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1681149882/site-v5/Key_Result_5b63c625a6.svg" alt="Key result = Verb + what you're going to track + from x to y diagram"></figure><h3>Examples of key results</h3><ul><li>100% of leads have an account rep assigned and a “plan to land”</li><li>Prove bottom-up “land and expand” within (2) two existing SME accounts</li><li>Close 6 new SME customers before the end of the quarter</li></ul>

Running into challenges along your OKR journey is inevitable, but there are a few mistakes you can try to avoid. Here are some common OKR writing mistakes:<ul><li>Too many priorities: Overloading your team with a multitude of objectives can lead to confusion and a lack of clarity on where to focus efforts</li><li>Tasks over outcomes: Focusing on tasks can lead to a checklist mentality rather than driving real progress</li><li>Unrealistic targets: Setting targets that are too ambitious or unattainable can demotivate teams and lead to frustration and burnout</li><li>Lack of ambition: On the flip side, setting objectives that are too easy to achieve can result in complacency and a lack of meaningful progress</li><li>Unclear language: Using vague or ambiguous wording when writing your OKRs can lead to misunderstandings and misalignment&nbsp;</li><li>Static goals:<span style="background-color:rgb(247,247,248);color:rgb(55,65,81);font-family:Söhne, ui-sans-serif, system-ui, -apple-system, &quot;Segoe UI&quot;, Roboto, Ubuntu, Cantarell, &quot;Noto Sans&quot;, sans-serif, &quot;Helvetica Neue&quot;, Arial, &quot;Apple Color Emoji&quot;, &quot;Segoe UI Emoji&quot;, &quot;Segoe UI Symbol&quot;, &quot;Noto Color Emoji&quot;;"> Not allowing flexibility in your OKRs to adapt to changing circumstances can lead to pursuing irrelevant or obsolete goals</li></ul>Avoiding these common OKR writing mistakes can help you craft out OKRs that drive you to success. Remember, the quality of your written OKRs can significantly impact your organization's ability to achieve its goals effectively.

Writing OKRs should be a collaborative team activity. Our step-by-step guide outlined below will empower you and your team with the knowledge of how to write effective OKRs to ensure clarity and success. The 5 steps of writing effective OKRs include talking to your team, drafting goals, brainstorming key results, debating key results, and aligning the goals of various teams through a bottom-up process.<h3>Step 1: Have the goal conversation, first</h3>The first step of OKR writing involves sitting down with your team and asking them, “What are the three most important things for us to accomplish in the next three months?” Drill down on why these are important — and do so again and again.By asking why continuously, leaders prompt their teams to share meaningful details regarding what specific objective they're trying to accomplish. If your team collectively understands the “why” on a deeper level, you're likely to end up with better active statements when you write OKRs, gaining greater commitment. &nbsp;For example, perhaps one objective is “We're going to ship an iOS App.” Fantastic. That’s a great objective — but it's not inspiring. &nbsp;So we ask the question, “Why does that matter?”&nbsp;The more profound answer is, “It matters because there’s been a drop-off in customer engagement and customer satisfaction, and our customers prefer mobile” Or, “it matters because to stay viable in the market, we need to have a mobile presence and a native app to meet our customers where they expect us to be.”&nbsp;So a new objective might be, “We're going to win back our customers by shipping an amazing iOS app.”&nbsp;<h3>Step 2: Prepare draft goals and share them with the team</h3>Once you're done writing OKRs, publish a draft of objectives ahead of time and then ask your team for feedback to get the conversation going. Sometimes, staring at a blank piece of paper is much harder than reviewing work in progress.&nbsp;During this sharing exercise, instead of asking, “Do you have any questions or comments?” consider asking your team to “please suggest one or more variations that would improve this objective.” Give your team the freedom to contribute and incorporate their perspective into the OKRs.&nbsp;<h3>Step 3: Conduct a team brainstorm to set key results</h3>When it comes to setting key results, it's a good idea to get the team involved. Conducting an OKR brainstorming session as part of your OKR writing process gives your team a level of ownership, drives accountability, and inspires them to care about the OKRs they set.&nbsp;&nbsp;<h3>Step 4: Debate key result ideas collectively</h3>When writing key results for each objective, get the sticky notes or the virtual whiteboard. Have each team member jot down suggestions and take turns sharing and debating their metrics until you find the right level of difficulty to push the team.&nbsp;<h3>Step 5: Don’t “cascade” OKRs down the org chart</h3>It's tempting to cascade OKRs down through the organization. But if all your goals fit together into a pretty parent/child tree, teams aren’t thinking creatively, taking risks, or showing initiative. Plus, it hinders alignment and collective buy-in across the organization.&nbsp;Instead, consider aligning OKR development through a bottom-up process. Invite teams at every level to define their OKRs before bringing the organization together to understand and challenge their alignment with your overarching vision. Not all OKRs within the organization will align with the company level, and that's okay. &nbsp;Ultimately, you want to create an OKR <a href="https://learn.microsoft.com/en-us/viva/solutions/viva-goals-healthy-okr-program/write-okrs-overview" target="_blank" rel="noopener noreferrer">writing process</a> where <a href="https://quantive.com/resources/articles/okr-examples" target="_blank" rel="noopener noreferrer">teams feel empowered to create their OKRs</a> and then challenge teams across the business to ensure they’re focused on the right priorities at the right time. This process encourages creative thinking and informed risk-taking, pushing your business forward.&nbsp;<hr>Read expert advice on setting OKRs in our <a href="https://info.quantive.com/hubfs/Quantive_Guides/Global-State-of-OKRs.pdf" target="_blank" rel="noopener noreferrer">OKR Trends Report</a><figure class="image image_resized" style="width:50%;"><a href="https://info.quantive.com/hubfs/Quantive_Guides/Global-State-of-OKRs.pdf" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1687424947/site-v5/Trends_report_6180d2be32.png" alt="the global state of OKRs ebook icon"></a></figure><hr>&nbsp;

Remember that it's crucial to celebrate wins and learn from failures. Celebrate when you win by providing public recognition to team leads and supporting players. Use the opportunity to connect the win to the bigger picture of why it matters, and be sure to have retrospectives with what went well, what didn't, and how you can improve the <a href="https://quantive.com/resources/articles/goal-setting" target="_blank" rel="noopener noreferrer">goal-setting process</a> the next time. To learn more, check out our <a href="https://quantive.com/resources/articles/okr-guide" target="_blank" rel="noopener noreferrer">OKR Guide for 2024</a>.<hr>Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.&nbsp;&nbsp;As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy from a static plan to a feedback-driven engine for growth.&nbsp;&nbsp;Whether you’re a visionary start-up, a mid-market business looking to conquer, or a large enterprise facing disruption, Quantive keeps you ahead — every step of the way. For more information, visit <a href="http://www.quantive.com/">www.quantive.com</a>.&nbsp;

How to Write OKRs: What Is a Good OKR Structure?

When working with <a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer">OKRs</a> for the first time, you may unknowingly make a lot of OKR mistakes in the adoption process. Although on the surface OKRs can seem simple, there are many&nbsp;nuances to consider when <a href="https://quantive.com/resources/articles/how-to-implement-okrs" target="_blank" rel="noopener noreferrer">implementing OKRs</a> in your organization. &nbsp;Ever wonder why so many OKR books, consultants, and software vendors exist? It’s because OKRs are an ongoing discipline that require planning and management. Without careful consideration, OKR mistakes can become rife and plenty.Today, we’re sharing a few of the most common OKR mistakes so you can save time, avoid headaches, and quickly gain the benefits of OKRs.&nbsp;

By far one of the biggest OKR mistakes is not understanding how the components work together. If you don't clearly understand the key components and their differences, you won’t be able to follow the OKR method effectively. As a refresher, there are two parts of an OKR: the objective and the key results.How to overcome it: To grasp how OKR components work collectively, you must first understand them individually. Objectives need to be inspirational, qualitative, and declare your intent about what you want to achieve. Key results, on the other hand, should be quantitative and demonstrate how you will measure progress against your objectives. For each objective, you typically will have two to four key results. Tasks are the day-to-day activities that you complete to achieve your key results.&nbsp;<hr>Want to learn more about the basics of OKRs? Read <a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer">What are OKRs?</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611666/site-v5/what_are_OK_Rs_35bf212c5f.png" alt="what are OKRs.png"></a></figure><hr>

OKRs provide a framework for execution toward a goal. The point of having this framework is to align strategy and execution so you can do more of the right things in less time. If your goals are business as usual or being just above average, then you’re not getting the full value of OKRs.&nbsp;How to overcome it: You can easily overcome this OKR mistake by thinking big and pushing the limits of your capabilities with creating OKR goals. An example of a stretch goal would be to launch an app that reaches number one in your product category within three months. This would be considered a stretch goal as its ambitious and difficult, but still in the realm of possibility with sufficient creativity.&nbsp;

In contrast, setting goals that are too ambitious can easily become another OKR mistake. If your OKRs are unrealistic, your team can run into problems like:&nbsp;<ul><li>Instantly recognizing the goal as unachievable so they don’t put in the effort from the beginning</li><li>Becoming demoralized if goals are consistently unachieved</li><li>Bad behavior such as cutting corners, lying, or shifting responsibilities just to complete a goal</li></ul>How to overcome it: The answer is to <a href="https://quantive.com/resources/articles/goal-setting" target="_blank" rel="noopener noreferrer">set goals</a> that push your team’s limits, are realistic, and ideally backed in past performance data. This way, you can create goals that are challenging yet attainable.

Another key purpose of OKRs is to ensure you get your priorities right. Part of this process involves deciding what you need to focus on — the objectives that will make the biggest impact on your business.&nbsp;If you set too many objectives, then the OKR framework will start working against you, turning into a costly OKR mistake. Instead of radical progress, you will create stagnation as your team splits focus and resources across competing priorities.&nbsp;How to overcome it: OKRs work best when you take the time to identify the most critical objectives and align your team from there. This can involve ensuring alignment with the company vision and goals, ensuring a collaborative team approach, and regularly reviewing and adjusting your OKRs to make sure they're still relevant and focused on what matters.

Another OKR mistake is using KPIs and OKRs interchangeably. Your <a href="https://quantive.com/resources/articles/what-are-kpis" target="_blank" rel="noopener noreferrer">key performance indicators (KPIs)</a> and your objectives and key results (OKRs) are related but serve different purposes.&nbsp; Your KPIs, in many cases, will be the metrics used when defining what your key results are.&nbsp;For instance, if you have the objective to “create an unforgettable customer experience,” one of your key results may be to increase your net promoter score (a KPI) by two points.&nbsp;How to overcome it: Clearly distinguish the roles and purposes of OKRs and KPIs. Understand that KPIs measure ongoing performance, while OKRs are forward-looking goals. While you can align your KPIs with OKRs by using KPIs to define key results, it's important to acknowledge that not all KPIs can become key results.<hr>Learn more about <a href="/resources/articles/okrs-vs-kpis" target="_blank" rel="noopener noreferrer">OKRs vs KPIs</a><figure class="image image_resized" style="width:50%;"><a href="/resources/articles/okrs-vs-kpis" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611666/site-v5/OK_Rs_and_KP_Is_58043d5709.png" alt="OKRs &amp; KPIs.png"></a></figure><hr>

Like with any change in your organization, the process of adopting OKRs must be thoroughly planned and executed correctly. There are several ways OKRs can go wrong (that’s the reason you’re reading this article), but adoption doesn’t have to be one of them.&nbsp;How to overcome it: It’s useful to have an OKR champion within your organization. Having someone responsible for OKR implementation means a greater likelihood of consistency and follow through, reducing OKR mistakes along the way.&nbsp;If you need help, <a href="https://quantive.com/consulting" target="_blank" rel="noopener noreferrer">OKR consultants</a> can also be a beneficial resource when you’re in the early stages of your OKR journey.

To get the <a href="https://quantive.com/resources/articles/okrs-in-business" target="_blank" rel="noopener noreferrer">benefits of OKRs</a>, there is a level of work and management needed across your organization. But if your company makes the OKR mistake of not tracking achievement, the challenging "set it and forget it” syndrome can occur. In turn, OKRs can become another management gimmick.&nbsp;How to overcome it: There are several things you can do to improve your OKR management, including holding weekly check-ins to monitor progress, using a confidence-based scoring system to identify hurdles, and creating a habit of OKRs through language, software, and processes.

One of the great things about OKRs is they bridge the <a href="https://quantive.com/resources/articles/strategy-execution-gap" target="_blank" rel="noopener noreferrer">strategy execution gap</a> in organizations. As a leader, you have the strongest grasp on <a href="https://quantive.com/resources/articles/strategy-execution-gap" target="_blank" rel="noopener noreferrer">strategy</a>, but you might not be following all the finer details of the day-to-day execution. So, if you’re setting OKRs for your team and making the OKR mistake of not involving them in the process, it can cause some challenges. You might not have all the details on their work and you run the risk of setting unrealistic goals.&nbsp;In addition, you miss the easy opportunity to <a href="https://quantive.com/resources/articles/okrs-for-employee-engagement" target="_blank" rel="noopener noreferrer">boost employee engagement</a> by having your team involved in defining what to work on. Setting top down or cascading OKRs has its uses in some environments, but the best practice is to set OKRs in collaboration with your team.&nbsp;&nbsp;How to overcome it: Involve your teams in the OKR planning process by engaging them, facilitating two-way communication, and empowering OKR ownership. This helps create collaborative OKRs that acknowledge the challenges and opportunities your teams face daily, while motivating them to be accountable and work toward their goals.

Your OKRs need to align your entire organization toward your most critical objectives. The dynamic nature of modern business means individual departments often don’t have the capacity to achieve goals singlehandedly.&nbsp;Sales, for instance, requires a powerful marketing engine in addition to the legal team giving them enough flexibility to close deals. If your teams have competing priorities, objectives won’t be achieved.&nbsp;How to overcome it: You'll need to ensure your OKRs are defined and assigned in a way that each department is working harmoniously towards the same key objectives.&nbsp;&nbsp;<hr>Want to learn more about OKRs by team? <a href="https://quantive.com/resources/articles/company-okrs" target="_blank" rel="noopener noreferrer">Read our article on OKR examples</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/company-okrs" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611666/site-v5/OKR_examples_company_1013b44f1b.png" alt="OKR examples - company.png"></a></figure><hr>

If you’re running a quick experiment with OKRs, it’s okay to manage the process with common collaboration tools such as Google Sheets or Excel. But once you’ve fully bought into OKRs, you need OKR software to make the process run smoothly. Without software, this OKR mistake can affect your ability to:&nbsp;<ul><li>Access performance data to track progress against OKRs</li><li>Easily manage your OKR program to ensure adoption and use</li><li>Create transparency of OKRs — a lack of which causes misalignment</li></ul>How to overcome it: There are a lot of <a href="https://quantive.com/resources/articles/okr-software" target="_blank" rel="noopener noreferrer">great OKR software options</a> on the market that can fit your company size and budget. Read our <a href="https://quantive.com/resources/articles/okr-software-buyers-guide" target="_blank" rel="noopener noreferrer">OKR Software Buyer’s Guide</a> to learn more about what to look for in a technology partner, so you can choose the OKR software that best suits your organizational needs.

When looking at an OKR cadence, it represents the timeframe in which you aim to achieve your objectives. A common OKR mistake companies make is to work solely on an annual cadence.&nbsp;This is less effective than a quarterly cadence because:&nbsp;<ul><li>Your business environment is constantly changing which means the objective you initially set may become irrelevant as time goes on</li><li>Working on a faster cadence forces you to get more done in less time</li><li>A faster cadence allows your team to collect wins with greater regularity, boosting engagement</li></ul>Some companies opt for even shorter cadences such as six weeks, but this may not be effective for all companies.&nbsp;How to overcome it: As a best practice, aim for a quarterly cadence to start and iterate from there.

Although OKRs are an effective way to define and measure progress, it’s typically not a good idea to tie objective achievement to employee compensation. OKRs work best when you set stretch goals — it's about pushing the limits of your capabilities in a structured way to unlock more value.&nbsp;&nbsp;If you make the OKR mistake of tying OKRs to compensation, you end up with a culture of sandbagging. This is when teams and individuals deliberately set more achievable objectives in order to be compensated fully.&nbsp;How to overcome it: Leverage quarterly performance reviews in addition to OKRs. This will give you a separate way to handle compensation without creating perverse incentives.&nbsp;

Since OKRs can be part of a <a href="https://quantive.com/resources/articles/okr-performance-management" target="_blank" rel="noopener noreferrer">performance management</a> process, some companies will make the OKR mistake of delegating the management of <a href="https://quantive.com/resources/articles/human-resources-okrs" target="_blank" rel="noopener noreferrer">OKRs to their HR department</a>. As we’ve discussed, OKRs need to encompass strategy and execution, in addition to performance management, so delegating to one department to handle just won’t work.&nbsp;How to overcome it: Create and manage your OKRs at all levels of the organization — from senior executives down to individuals in each department. Without doing so, you will not be able to identify the critical objectives, in addition to gaining an accurate sense of your company's capabilities.

Getting the most out of OKRs requires being both adaptable and committed, depending on the current circumstances. For instance, when introducing OKRs, there’s a good chance you won’t deploy the method correctly and set optimal OKRs.&nbsp;And in constantly changing business environments, your OKRs may need to evolve so your company can better maneuver against competitors. In these cases, not taking an adaptive approach to your OKRs could be a grave OKR mistake, where you risk working on the wrong things, demoralizing your team, and potentially losing market share.&nbsp;&nbsp;Conversely, at some point you will need to be committed to the OKRs you set. Changing OKRs too quickly and not being persistent enough toward an objective means you won’t fully unlock the value of working toward ambitious goals.How to overcome it: Make the most of your OKR goals by balancing short-term adaptability with long-term commitment. When first implementing OKRs, learn from and iterate them gradually. Moreover, take note of changing business environments and adjust OKRs when necessary. With each change, communicate the importance of being committed to your <a href="https://quantive.com/resources/articles/okrs-for-business-alignment" target="_blank" rel="noopener noreferrer">OKRs for alignment</a> and long-term success. Striking this balance can help you reach milestone while remaining flexible amidst market changes.&nbsp;

OKRs increase alignment and bridge the strategy to execution gap, but they can’t (alone) solve the deeper problems your business may have. Having the wrong strategy, lacking key personnel, and being disrupted by innovative upstarts aren’t things OKRs can solve — at least in a direct way.&nbsp;How to overcome it: To maximize the effectiveness of OKRs, use them alongside other business strategies (e.g., operational excellence, talent management and development). A holistic, integrated approach to business issues while striving for ambitious goals can help you overcome hurdles and drive positive outcomes.

OKRs aren’t a simple or easy method to get right — particularly for larger organizations with many moving parts. But that doesn’t mean you should overcomplicate and stall the adoption of OKRs.&nbsp;An OKR mistake some organizations make is to fall into a perfectionist mindset, bloating the OKR implementation with various layers of approvals, meetings, and over analysis.&nbsp;How to overcome it: Although there is depth to the OKR method, you don’t need to do everything all at once and you should accept that OKR adoption won’t be perfect in the beginning. For starters, keep the OKR process simple and straightforward, while providing training and support to those involved.

At the opposite end of perfectionism is adopting OKRs too quickly. Some companies make the OKR mistake of jumping in headfirst, but this may lead to unsatisfactory results — either in the form of failing to meet unrealistic expectations or simply using the method incorrectly. It then becomes easy to dismiss the OKR method as simply ineffective.&nbsp;How to overcome it: For starters, make sure you understand what the OKR method can do for you, including its principles and best practices. Apply these through a small-scale pilot involving a specific team or department. This can help you experiment, learn, and iterate the OKR method within your organization. If you're still struggling with OKR implementation, consider hiring a consultant or leveraging software to get the most out of the method.

OKRs thrive in organizations that are transparent. If there’s a lack of transparency in company-wide objectives and key data sources, it can lead to:&nbsp;<ul><li>Poor clarity about who’s working on what, potentially leading to duplicated effort</li><li>Low alignment between teams, reducing collaboration toward broader objectives</li><li>Losing the value of a data driven culture in terms of accountability and engagement</li></ul>How to overcome it: Revamp your culture, processes, and technology to become more transparent. This are essential components of an effective OKR strategy.

OKRs are often compared to a compass or GPS system for organizations. The framework helps clarify direction and accelerate momentum, but there will be detours and adaptations that need to be made along the way.&nbsp;Turning a blind eye to these changes can cause <a href="https://quantive.com/resources/articles/strategy-failure" target="_blank" rel="noopener noreferrer">strategy failure</a> for the OKRs within your organization.How to overcome it: To chart the correct course, your team will need to be constantly learning — both from weekly meetings and end of quarter reviews. The key learning takeaways then need to be used to adjust your OKRs for the next quarter so you can be even more effective.

The <a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer">purpose of OKRs</a> is to align your company toward a common goal; empowering teams and individuals to push the limit of their potential. If you're making the OKR mistake of using OKRs as a weapon to force productivity, then you’re misusing the method and will likely not gain its full benefits.&nbsp;&nbsp;In addition, it’s unlikely you or the executive team will have enough insight into the details of each department's capabilities. If you set and manage all the OKRs from the top down, there’s a good chance your team will end up working on the wrong things or not working toward realistic goals.How to overcome it: Empower teams to set collaborative and aligned OKRs. Provide context on the company's vision and <a href="https://quantive.com/resources/articles/business-strategy" target="_blank" rel="noopener noreferrer">strategy</a> and foster a culture of learning and adaptation. This helps you drive motivation and innovation while getting the most out of OKRs.&nbsp;

Like with any management method, implementing OKRs must be done in the right way to be effective. Managing change, choosing the right technology, and getting external help are a few ways you can make OKR adoption more seamless. &nbsp;Although there are many management approaches you can take to increase your team's efficiency, OKRs as a framework can truly give you an extra edge over competitors — especially when actively working to overcome the OKR mistakes mentioned above.&nbsp;When done properly, OKRs have the power to clarify focus, align organization and tap into the creative power of every member of your team.&nbsp;<hr>Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.&nbsp;&nbsp;As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy from a static plan to a feedback-driven engine for growth.&nbsp;&nbsp;Whether you’re a visionary start-up, a mid-market business looking to conquer, or a large enterprise facing disruption, Quantive keeps you ahead — every step of the way. From OKR software to <a href="https://quantive.com/okr-consulting-services" target="_blank" rel="noopener noreferrer">OKR consulting</a>, we help you plan and meet your goals. For more information, visit <a href="http://www.quantive.com/">www.quantive.com</a>.&nbsp;

What are OKRs? The Ultimate Guide to the Objectives and Key Results Framework

The 20 Most Common OKR Mistakes (and How to Avoid Them) 

OKRs (Objectives and Key Results) are a collaborative management methodology that helps companies set and achieve goals by driving alignment, enhancing focus, and promoting transparency. By illustrating the top priorities of the organization, company OKRs are the grounding point for business, department, and individual initiatives.<hr>Learn more about <a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer">what OKRs are </a>and how to use them<figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/okr-meaning" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1670611666/site-v5/what_are_OK_Rs_35bf212c5f.png" alt="what are OKRs.png"></a></figure><hr>Company level OKRs, however, are not meant to cover everything your organization needs to accomplish, as too many OKRs can unravel organizational efficiency through complexity and confusion. When done correctly, company OKRs prevent a significant vulnerability: misalignment.&nbsp;Without alignment at the top, departments and teams operate without direction and focus. Company wide OKRs help leadership connect with the most important goals and help individuals produce efficient and inspired work.&nbsp;

The transparency of OKRs ensures accessibility to the company goals that guide the business, department, and individual goals. This is the first step in preventing misalignment, as each team knows what the other is working on at any given time.OKRs also correct misalignment through <a href="https://quantive.com/resources/articles/cross-functional-collaboration" target="_blank" rel="noopener noreferrer">cross-functional collaboration</a>. The company level objective is supported by department initiatives that drive progress for the key results. Company wide OKRs require each department to work together to progress key results and their respective OKRs, pushing each team and individual in the same direction.Through company OKRs, objectives provide the often-missing guiding light for each department, while key results give teams a quantifiable objective to push towards collaboratively.&nbsp;

Company OKRs can be split into an <a href="https://quantive.com/resources/articles/okr-cycle">annual and quarterly</a> focus, usually with a mid-year review of the annual OKR. Depending on the structure of the organization, the CEO, COO, and/or Chief of Staff may create the initial draft of company OKRs with feedback from other c-suite executives to ensure OKRs aren’t created in a silo.The key decision makers need to have an informed perspective on each department’s performance when determining where the company should focus. A growth-focused, Series C funded startup, for example, will need to focus on different areas than a 40-year established enterprise. &nbsp;While annual company wide OKRs are the support structure of your organization, they are far from “set and forget” goals. Changes in the competitive environment, shifting consumer demands, and other unaccounted-for variables (like a worldwide pandemic) require flexible company OKRs. Quarterly company OKRs allow for variety in “how” the annual company OKRs are achieved and “what” is happening in the market for your product or service.&nbsp;

Company OKRs can be focused, quarterly or annually, on a selection of areas like:<ul><li>Growth initiatives</li><li>Brand</li><li>Culture</li><li>Revenue</li><li>Product</li><li>Service</li></ul>Check out all our example company OKRs below. &nbsp;

<h3>Example company OKR: Growth</h3>Example 1<ul><li>Objective: Become growth-obsessed&nbsp;</li><li>Key result 1: Decrease avg. net MRR churn by 25%&nbsp;</li><li>Key result 2: Compound MoM MRR growth of 15%&nbsp;</li><li>Key result 3: 2,000 Customers&nbsp;</li></ul>Example 2<ul><li>Objective: Kickstart growth mode</li><li>Key result 1: Increase the company average deal size by 30% (with upsells)</li><li>Key result 2: Reduce churn to less than 5% annually</li><li>Key result 3: Successfully expand into APAC by establishing regional HQ in Singapore and hiring at least 3 sales/support staff</li></ul><hr><h3>Example company OKR: Brand</h3><ul><li>Objective: Delight our customers</li><li>Key result 1: Achieve an NPS of &gt;24 from our customers</li><li>Key result 2: Increase customer Net Retention to &gt;100%</li><li>Key result 3: Achieve product engagement measured by &gt;80% WAU</li></ul><hr><h3>Company OKR examples: Culture</h3>Example 1<ul><li>Objective: Build a great corporate culture</li><li>Key result 1: Successfully launch OKR platform to provide transparency to company goals by having 70%+ users submit reflections within 3 weeks</li><li>Key result 2: Achieve a weekly employee satisfaction / Pulse Score of &gt;8</li><li>Key result 3: Celebrate at least 3 “small wins” and "shout-outs" in every all hands meeting</li><li>Key result 4: CEO and SVPs to complete monthly all-hands town hall and open Q&amp;A meeting</li></ul>Example 2<ul><li>Objective: Create an OKR-obsessed culture</li><li>Key result 1: 90% of KRs are up to date every 2 weeks</li><li>Key result 2: Average 70% progress on all OKRs</li><li>Key result 3: Average OKR design score above 80&nbsp;</li></ul><hr><h3>Company OKR examples: Revenue</h3>Example 1<ul><li>Objective: Achieve revenue targets through disciplined, profitable, and repeatable methods‍</li><li>Key result 1: Hit company global sales target of $50 Million in New ARR</li><li>Key result 2: Achieve &gt;50% growth in channel sourced bookings</li><li>Key result 3: Achieve &gt;40% of Bookings target by Feb 28th</li><li>Key result 4: Achieve 100% year-to-year sales growth in EMEA</li></ul>Example 2<ul><li>Objective: Improve customer retention to drive up revenue&nbsp;</li><li>Key result 1: Improve product onboarding (product)&nbsp;</li><li>Key result 2: Target enterprise MQLs to improve&nbsp;customer life time (marketing)&nbsp;</li><li>Key result 3: Build a long-term nurture sequence (customer success)</li></ul><hr><h3>Example company OKR: Product</h3><ul><li>Objective: Launch the new product successfully in Q1</li><li>Key result 1: Publish 5 new product customer case studies</li><li>Key result 2: Obtain at least 20 new product customers with an average order size of &gt;$25k</li><li>Key result 3: Obtain Leader category status in the Gartner Magic Quadrant</li><li>Key result 4: Win a “Best Product of the Year” award at the industry conference</li></ul><hr><h3>Example company <a href="https://quantive.com/resources/articles/customer-success-okrs" target="_blank" rel="noopener noreferrer">OKR: Customer service</a></h3><ul><li>Objective: Create customers who love us as much as we love us</li><li>Key result 1: Identify needs and design features to address them</li><li>Key result 2: Address pain points and needs of the customer</li><li>Key result 3: Improve and scale customer success cycle for current customers&nbsp;</li></ul><hr>

<a href="https://quantive.com/resources/articles/okr-software" target="_blank" rel="noopener noreferrer">OKR software</a> can improve your company's performance by facilitating smooth communication and <a href="https://quantive.com/resources/articles/cross-functional-collaboration" target="_blank" rel="noopener noreferrer">collaboration among cross-functional teams</a>.&nbsp;It ensures quick, transparent, and feedback-driven interactions for effective team coordination. Additionally, OKR software keeps your company aligned with changing circumstances, allowing strategic pivots through timely <a href="https://quantive.com/resources/articles/okr-tracking" target="_blank" rel="noopener noreferrer">OKR progress tracking</a>.Let's take a quick look at what your company's OKRs would look like within a dedicated OKR platform like Quantive Results:<img src="https://res.cloudinary.com/gtmhub/image/upload/v1705582547/site-v5/Company_OK_Rs_28ab4347fc.png" alt="Company OKR examples">

Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.&nbsp;&nbsp;As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy from a static plan to a feedback-driven engine for growth.&nbsp;&nbsp;Whether you’re a visionary start-up, a mid-market business looking to conquer, or a large enterprise facing disruption, Quantive keeps you ahead — every step of the way. For more information, visit <a href="http://www.quantive.com/">www.quantive.com</a>.&nbsp;

How to Write Great OKRs: OKR Best Practices

Company OKRs Examples

Decentralized and distributed, yet connected and continuous.All seemingly incompatible elements of the third industrial revolution, also known as the digital revolution, when we moved our analog world first to computers and then to the cloud.Decades in, we’re learning something new: You cannot overlay <a href="https://quantive.com/resources/articles/digital-transformation" target="_blank" rel="noopener noreferrer">digital transformation</a> atop traditional ways of doing business and expect traditional outcomes. Instead, there’s a ripple effect where those conventional ways of making decisions and managing people eventually lead to lackluster results.&nbsp;As we now enter a fourth industrial revolution, which is even more complex than the last, we’re facing a set of new and unfamiliar challenges.<ul><li>Dynamic innovation. The fusion of technologies like artificial intelligence and machine learning, 5G and IoT connectivity, 3D/4D printing, cloud and edge computing, blockchain, and so on, present complex and unfamiliar changes.</li><li>Global integration. The global economy is increasingly interconnected. Unlike just 200 years ago, we now share goods, services, people, and information with a growing list of trade partners.&nbsp;<a href="https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/global-flows-the-ties-that-bind-in-an-interconnected-world">No region is self-sufficient</a> anymore which means we are tied to our trade partners’ prosperity, as well as their scarcity.</li><li>Macro and micro climate crises. Increased human activity, as well as unprecedented population growth (i.e. the 1 billion people we’ve added to the world population&nbsp;<a href="https://news.un.org/en/story/2022/11/1130417">in the last 12 years</a>) is disrupting our natural world. How do governments and corporations respond? How do companies create value through an&nbsp;<a href="https://quantive.com/resources/articles/what-is-esg">environmental, social, and governance</a> (ESG) proposition and <a href="https://quantive.com/resources/articles/esg-frameworks" target="_blank" rel="noopener noreferrer">pick the right ESG framework</a>?</li><li>Geopolitical unrest. Political polarization all over the world is shifting the political foundations that have been laid in some countries for hundreds of years. And as tensions rise, it’s not just supply chains that stall — so does corporate innovation — and the effects can be long-lasting.</li></ul>The level of uncertainty regarding our future, not to mention the sheer amount of external and internal variables required to process and make sense of it all, is overwhelming.Yet the ways we’re thinking about <a href="https://quantive.com/resources/articles/ai-for-decision-making" target="_blank" rel="noopener noreferrer">decision making</a>, leading people, and delivering value are rooted in decades-old habits and mindsets. And they’re barely keeping pace.&nbsp;Indeed, as the&nbsp;things we work on evolve, so must the ways&nbsp;in which we work.Businesses today need a framework that makes strategy fluid and decentralizes decision-making and action to continuously align key players in the organization. We need a Modern Operating Model that puts the focus on execution, ensuring the right data is accessible, at the right time, to the right people, so that those people are equipped to collaboratively create the best possible outcomes.So where do we begin?<hr>Don't have time to read the full article now? <a href="https://info.quantive.com/hubfs/Quantive_Guides/The_Modern_Operating_Model_Manifesto.pdf" target="_blank" rel="noopener noreferrer">Download the pdf</a> and save for later.<figure class="image image_resized" style="width:50%;"><a href="https://info.quantive.com/hubfs/Quantive_Guides/The_Modern_Operating_Model_Manifesto.pdf" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1671869904/site-v5/mom_1_d57deb218f.png" alt="The Modern Operating Model Manifesto"></a></figure><hr>

Strategy execution is not a new challenge. But it’s a challenge today for new reasons. Historically,&nbsp;<a href="https://www.gartner.com/smarterwithgartner/the-five-pillars-of-strategy-execution">67% of strategies</a> failed due to poor execution and&nbsp;<a href="https://www.gartner.com/smarterwithgartner/the-five-pillars-of-strategy-execution">83% failed due to faulty assumptions</a> when the strategy was created.So what is it that makes execution so hard? In a word —&nbsp;complexity.As a leader, you’re tasked with distilling high level company aspirations down to a handful&nbsp;of priorities, then refining those priorities into clear, actionable steps with accompanying metrics of success. The translation itself is challenging, but you’ve only just begun.Then there’s complexity in terms of scale and participation.You’re taking an idea from a small executive group to a much larger population, all with a unique role to play. That demands precise and near-constant communication that elicits buy-in, creates alignment, and empowers people within their spheres of responsibility. When those outcomes aren’t met, you risk frustrating your employees, executing on the wrong things, and under-resourcing your workforce — all of which create both internal and external vulnerabilities.And then there’s the challenge of logistics, where the “plan” goes from the theoretical realm into the real world. At this phase, you must allocate resources, determine roles and responsibilities, make a plan for responding to challenges, support employee morale, gather data and feedback, and coordinate communication between internal and external teams and partners.You must also be ready to change course at a moment’s notice. Why? The list of reasons keeps growing. Change can come in the form of traditional people, processes, or resource issues to evolving issues like groundbreaking technology, customer expectations, expanding employee needs, regulatory changes, or political unrest.<blockquote>“What if your company’s health insurance plan (or your hiring and training practices, or your policy on guns in the workplace) violates a new state law? And what if your efforts to comply with fast-changing laws and regulations are met with condemnations from employees, customers, and investors? These were not questions that business leaders were asking themselves even a few years ago. Now they must.”&nbsp;-&nbsp;<a href="https://sloanreview.mit.edu/article/every-company-needs-a-political-strategy-today">MIT Sloan Management Review</a></blockquote>

To solve the&nbsp;<a href="https://quantive.com/resources/articles/strategy-execution-gap">strategy execution gap</a> in an ever-evolving context, we first must break down the problem into clearly identifiable parts. Historically, organizations had trouble executing strategy when there are roadblocks in six key areas:<ol><li>Alignment</li><li>Prioritization</li><li>Observability</li><li>Agility</li><li>Capabilities</li><li>Culture</li></ol><h3>Alignment</h3>The larger an organization is, the more challenging it is to get all key players on the same page and ‘rowing in the same direction’. Yet even the slightest misalignment can result in missed opportunities, wasted time, poor communication, and worst of all — executing the wrong tasks. All of which lead to lost revenue.&nbsp;For instance, a strategic disagreement at BMW&nbsp;<a href="https://www.predictiveindex.com/blog/cost-strategic-disagreement/">cost the company $10 billion</a>. The stakes are that high. And at most companies, executives agree on only 50-70% of their strategy, leaving the door wide open for misalignment with a cost of up to 25% of revenue.Alternatively, strategy alignment fuels action, agility, and trust. When a strategic plan is clearly communicated and people are equipped at every step, they are then free to set goals and pursue them knowing they’re working on the right things.&nbsp;<h3>Prioritization</h3>Organizations with prioritization problems often fail to cast a compelling vision. And with&nbsp;<a href="https://www.strategyand.pwc.com/gx/en/unique-solutions/cds/the-strategy-crisis.pdf">74% of executives</a> saying they ask employees to focus on too many priorities, and 21% admitting their organizations don’t have a set of strategic priorities, this is a huge problem when it comes to strategy execution.If there’s a prioritization problem, culture starts to crumble and employees end up with&nbsp;<a href="https://hbr.org/2018/09/too-many-projects">too many competing projects</a> and tasks. Their valuable time is spent on activities for which there is little to no return on investment.<h3>Observability</h3>Knowing what’s&nbsp;really going on in a business has always been a challenge. But as we’ve discussed, the moving parts today are&nbsp;more distributed than they’ve ever been, yet less tangible. It’s a complicated combination.The&nbsp;<a href="https://cts.businesswire.com/ct/CT?id=smartlink&amp;url=https%3A%2F%2Fnewrelic.com%2Fobservability-forecast%2F2022%2Fabout-this-report&amp;esheet=52888776&amp;newsitemid=20220914005057&amp;lan=en-US&amp;anchor=2022+Observability+Forecast&amp;index=2&amp;md5=5e6830bb0e346abfea599217bef7a11c">2022 Observability Forecast</a><a href="https://cts.businesswire.com/ct/CT?id=smartlink&amp;url=https%3A%2F%2Fnewrelic.com%2Fobservability-forecast%2F2022%2Fabout-this-report&amp;esheet=52888776&amp;newsitemid=20220914005057&amp;lan=en-US&amp;anchor=report&amp;index=3&amp;md5=b2ed7a22db501c04da1d25d76c0673d9"> report</a> found that technology professionals are eager to accelerate observability capabilities to preempt issues related to application security and ultimately customer experience.&nbsp;Three in four of the professionals surveyed said their company executives are advocates of observability, with 78% reporting observability as a “key enabler for achieving core business goals,” which indicates that observability is quickly becoming non-negotiable in the C-Suite.Why? In a knowledge economy, sharing knowledge must be easy and fast. We need something that pushes the right data to the right people at the right time, then reports when people have acted on that data.<h3>Agility</h3>We’ve known for a long time that those who adapt well to their changing environment have a better chance of survival. But today, the time we’re allowed to figure out how to adapt is compressed.An organization’s ability to respond to change quickly&nbsp;and effectively is essential. No longer is there time to run every decision up and down the leadership chain. Flatter, better-aligned organizational structures are winning out over those that are deeply hierarchical.<blockquote>Hierarchy is not working anymore — agility is.</blockquote><h3>Capabilities</h3>As the ways in which we work evolve, so do the skills and resources we need. However many <a href="https://quantive.com/resources/articles/strategy-failure" target="_blank" rel="noopener noreferrer">strategic plans fail</a> because they were aiming at the wrong target, making assumptions about the market, or overestimating what was actually possible in the span of time.It’s easy to believe there will be time to develop the skills and resources needed to compete in the marketplace, but that time is not always a given. Failing to plan for skills and competencies presents considerable risk.Take the film photography company Kodak for instance. The company became a cautionary example of short-sightedness when, despite its position as a market leader, revenues plummeted and ended in bankruptcy.&nbsp;What happened? Kodak and other companies in the film sector were aware the industry was heading in a digital direction, yet they continued focusing on what worked in the past. They failed to build the capabilities required to operate in a new world.Defining and documenting the competencies and capabilities a company will need — and when it will need them — is critical.<h3>Culture</h3>Finally, company culture is too often an afterthought when it comes to strategy execution. Yet a strong culture reinforces each of the other strategy execution components. When a workforce is&nbsp;engaged they stay aligned, focus on priorities, advocate for observability, create an <a href="https://quantive.com/resources/articles/agile-meaning" target="_blank" rel="noopener noreferrer">agile</a> structure, and develop new capabilities.Weak cultures result in higher labor costs, lower productivity rates, and trouble finding and keeping the best, most creative talent. On the contrary, organizations that work on strengthening company culture see a net profit increase of&nbsp;<a href="https://www.gallup.com/workplace/229832/culture.aspx">85% in the first five years</a>.&nbsp;

It’s hard enough to execute a strategy in a world we’re familiar with where we can predict the results of our actions with some degree of confidence. But in the context of such rapid change, it’s even harder. So what exactly are these “<a href="/resources/articles/business-challenges" target="_blank" rel="noopener noreferrer">new business challenges</a>” impacting strategy execution?<ul><li>Business velocity</li><li>Generational changes</li><li>Decentralized work</li><li>Elevated uncertainty</li><li>Data overload</li></ul><h3>Business velocity</h3>According to McKinsey, we’ll witness&nbsp;<a href="https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/tech-at-the-edge-trends-reshaping-the-future-of-it-and-business">more technological advances in the next 10 years than the last 100</a>. And seeing as autonomous vehicles are right around the corner, while a century ago we didn’t even have power steering — that’s saying a lot.Meanwhile, market changes are also becoming more dynamic than ever before. The levers that stimulated or cooled an economy 20 years ago aren’t nearly as reliable as they once were. Using the financial tools we’re familiar with will not solve the business problems of the future.<h3>Generational changes in the labor environment</h3>Meanwhile, as Baby Boomers exit the workforce en masse, Gen X and Millennials are replacing them in leadership positions while Gen Z fills out the bottom ranks. And these generations’ coming of age experiences have been markedly different from those of previous generations.Thanks to internet-based tools and platforms, it’s easier than ever to start your own business and be your own boss. As a result, many individuals who would have once sought to build high-performing careers in large corporations are now trading that idea for more autonomy and the same-sized paycheck.And with the changes over the last few years, the average employee today seeks more flexibility, autonomy, personal meaning, and social impact in their work than their predecessors did. The idea of “community” is starkly different now than it was for their parents and grandparents when people lived, worked, and socialized with their neighbors. Today one’s community may be distributed all over the world, held together by common values, interests, or business endeavors.<h3>Decentralized work</h3>Sending a workforce home with a laptop and an internet connection is not modern. For a distributed environment to actually&nbsp;work, the flow of information has to change, too.In a knowledge economy, where data reigns supreme, the right information must travel to the right people at the right time. But that’s easier said than done in a world where colleagues work from various time zones, and when the sheer amount of information needed to make a single decision is overwhelming.<h3>Data overload</h3>The digital revolution dumped an overwhelming amount of new information in our laps. Now we have to figure out how to use it. That’s why the global enterprise data management market&nbsp;<a href="https://www.grandviewresearch.com/industry-analysis/enterprise-data-management-market">will reach nearly $100 billion</a> by the end of 2022.Yet to date, too much data remains unleveraged. In many companies, the data people need may be&nbsp;present. But too often it’s not&nbsp;connected or&nbsp;useful. Data overload is negatively impacting job performance and increasing stress, which in turn negatively impacts strategy execution.<h3>Elevated uncertainty &nbsp;</h3>Covid was a watershed moment, of course. And now, the Russia-Ukraine war has further disrupted the equilibrium of supply and demand, sending shock waves through the world economy.The compounding effects of these issues has significantly affected consumer demand, the cost of goods, and investment decisions, resulting in a period of inflation — and increasing the likelihood of a <a href="https://quantive.com/resources/articles/recession-proofing-your-business" target="_blank" rel="noopener noreferrer">recession</a> or stagflation.And that’s on a global scale. For individual companies, in addition to day-to-day supply chain challenges and cost of goods challenges, it’s nearly impossible to plan for the future, at least beyond the six to nine month mark.

Adapting to these changes isn’t easy…which is a manifestation of the problem itself. We need a means to effectively execute strategic objectives in a fast and constantly changing world.That’s where the&nbsp;<a href="https://quantive.com/resources/articles/what-is-the-modern-operating-model">Modern Operating Model</a> comes in. Based on a few core beliefs, the Modern Operating Model instills the following mindset:<ul><li>Team&nbsp;priorities should be connected to top-line objectives</li><li>Decision-making should be decentralized</li><li>Organizations should be transparent and trustworthy</li><li>Business should be outcome-focused</li><li>Teams should be fast and agile</li><li>Feedback loops should be compressed</li></ul><h3>Connecting priorities to top-line objectives</h3>With clear lines of sight to the top, workers can spend less time working on anything misaligned with company objectives. Not only does alignment produce faster results, employees are also able to see the impact of their work. And more importantly, see why their work matters. While there is no shortage of work to be done in any organization, alignment ensures we’re working on the&nbsp;right work.&nbsp;<h3>Decentralizing decision-making</h3>Data and insights are only valuable when you have access to them with enough time to change outcomes. If the data is delivered too late, you may as well not have it at all.Yet the volume of decisions that need to be made on a daily basis in most organizations is much, much more than any one executive team can process and make sense of. That is why the top-down model of the past is not the way forward.&nbsp;In the Modern Operating Model, as data is unlocked from silos and the right information is put in the hands of decision makers, two things happen: decision-making time goes down and decision-making quality goes up.<h3>Creating transparent and trustworthy organizations</h3>A culture built on integrity and transparency is the only way to empower employees to perform at their highest levels. With the focus on outcomes, as well as clear ownership and alignment, there’s a decrease in time spent finger pointing and deciding who’s to blame. In turn, people want to show up to work, to solve problems together, and communicate when things start to drift off course.<h3>Building outcome-focused businesses</h3>During the assembly line era, we learned to obsess over inputs. The outputs took care of themselves. But today, it doesn’t work that way. Outcomes are evidence. Activities — those day-to-day tasks being executed by individuals in your organization — do matter; but they will never, on their own, indicate how close you are to meeting your goals. Moving beyond opinions, egos, and activities to a focus on results is the only way for modern businesses to succeed.<h3>Creating fast and agile teams</h3>Excellence is never achieved without practice. And practice entails trying, failing, learning, then trying again. Today’s businesses need to establish an operating cadence that allows the organization to manage fast, then to quickly adjust as needed. Since most teams spend their time finding solutions to new problems, encouraging a "test and iterate" mindset empowers people to move faster without fear of failing.<h3>Compressing feedback loops</h3>We can’t make good decisions without good information. Today, knowledge drives everything. By collapsing feedback loops, and getting data into the hands of decision makers at the time they need it, we’re able to dramatically reduce the time it takes to pivot or persevere. And by removing unnecessary hurdles, we empower&nbsp;more people to make decisions when they have the right insights — instead of only informing a select few at the top.

So how do you make the Modern Operating Model a reality in your organization? Success requires implementing five major components. Each depends on the others, and we’ll examine them in sequence.<ol><li>Define the destination</li><li>Change the business</li><li>Run the business</li><li>Do the work</li><li>Assess &amp; adapt</li></ol><figure class="image image_resized" style="width:75%;"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1669895185/site-v5/visual_MOM_Small_1b5afd02d4.svg" alt="Modern Operating Model"></figure><h3>Component 1: Define the destination</h3>In order to be aligned, your team needs to know where they’re going, why it matters, what they need to accomplish, and how to get there. In short, they need a defined destination. It’s key for building trust, resiliency, and focus.&nbsp;A well-defined destination is made up of a common mission and cultural values, a company vision, and an overarching strategy.<h4>Mission and cultural values&nbsp;</h4>Having a shared perspective or mission binds people together powerfully. It’s also a strong motivator of engagement. Gen Z’s and Millennials in particular seek out organizations that promote purpose and conscious culture.&nbsp;&nbsp;<h4>Vision</h4>Vision shapes priorities and refines strategic focus. It yields better decisions about relevant work, potential opportunities, and more. If you want your team to work as a unified whole, it’s important to give them a shared picture of the future.<h4>Strategy&nbsp;</h4>Your strategy is the critical link between your defined destination and the active phases of carrying it out. It provides your organization with the practical aspects of the plan.<hr>Learn about the differentiating <a href="https://quantive.com/resources/articles/mission-vs-vision" target="_blank" rel="noopener noreferrer">components of mission vs. vision</a><figure class="image image_resized" style="width:50%;"><a href="https://quantive.com/resources/articles/mission-vs-vision" target="_blank" rel="noopener noreferrer"><img src="https://res.cloudinary.com/gtmhub/image/upload/v1679576222/site-v5/mission_vs_vision_4831a60599.png" alt="A green flag with hollow filling placed to the left of an outline of an eye, with the iris also outlined in green, all on a green background, to signal mission vs. vision"></a></figure><hr><h3>Component 2: Change the business</h3>Next up: determining what needs to change (objectives) and how to get people moving together in that direction (alignment).<h4>Set strategic objectives and OKRs&nbsp;&nbsp;</h4>Without objectives, strategy is vague — your goal is to clarify it, quantify it, and fit it to a timeline. Break down the larger plan into tangible steps that can be concisely communicated. Establish OKRs (<a href="https://quantive.com/resources/articles/okr-meaning">objectives and key results</a>), which define the specific outcomes for each part of the organization.&nbsp;Strategic objectives and OKRs impact strategy execution by:<ul><li>Supplying ambitious, achievable goals&nbsp;</li><li>Building vertical alignment so each person works toward the strategic objectives&nbsp;</li><li>Enabling horizontal alignment, increasing collaboration, and highlighting interdependencies&nbsp;</li><li>Boosting efficiency, prioritization, engagement, and focus through individual involvement in goal-setting</li><li>Creating an outcome-focused (rather than activity-focused) culture&nbsp;</li></ul><h4>Plan the execution</h4>With strategic objectives and OKRs established, plan the governance and execution. Spheres to consider in this phase:<ul><li>Culture design (transparent, trusting, consistent)</li><li>Modes of working (remote, hybrid, etc.)</li><li>Processes and playbooks</li><li>Policies and procedures</li><li>Roles/responsibilities&nbsp;</li><li>Tools and technology</li><li>Resource allocation&nbsp;</li><li>Workflows and project management</li><li>Communication plan (from rollout to final review)</li></ul>Success is won or lost in the planning stage.<h3>Component 3: Run the business</h3>Once the plan is in motion, you need data and feedback — that means internal and external monitoring. Together,&nbsp;<a href="https://quantive.com/resources/articles/okrs-vs-kpis">OKRs and KPIs</a> can show you what’s going on and how it affects progress toward strategic goals.Pull KPIs (for employee performance insight) from a connected technology stack to support&nbsp;<a href="https://quantive.com/products/signals">business observability</a>. Then set your KPIs to continuously update alongside your OKRs. OKRs provide quantitative data in the form of key results and confidence assessments toward meeting objectives. They also offer qualitative data through weekly&nbsp;<a href="https://quantive.com/resources/articles/okr-cycle">OKR reviews</a> and quarterly retrospectives.&nbsp;&nbsp;External monitoring is critical too. Observe your business environment for threats, shifts, and opportunities. It might mean keeping an eye on <a href="/resources/articles/business-challenges" target="_blank" rel="noopener noreferrer">unfolding megatrends</a> or staying attuned to the latest startup.&nbsp;Together, internal and external monitoring can shorten learning feedback loops and strengthen business observability. That means more accurate decisions when it comes to adapting your strategic execution.&nbsp;<h4>Component 4: Do the work</h4>Think about the basics: completing tasks, inputs, transformations, and outputs. Those agenda items remain, but under a Modern Operating Model, the atmosphere is different.&nbsp;What should it look like?<ul><li>Fully engaged employees, expending discretionary effort&nbsp;</li><li>Collaboration and communication between teams</li><li>Continuous learning and feedback (with regular OKR reviews and KPI observability)&nbsp;</li><li>Ownership and accountability through transparency&nbsp;</li><li>Data-driven decisions</li><li>Emphasis on outcomes, rather than tasks and activities&nbsp;&nbsp;</li><li>Growth mindset that embraces failure and experimentation</li><li>Merit and values based recognition and rewards</li></ul>This ideal state of work won’t happen overnight, but the components of a Modern Operating Model are designed to optimize your strategy execution over time, getting you closer to the goal every day.<h3>Component 5: Assess &amp; adapt</h3>Good business monitoring will set you up with the right data and information. From there, you’ll assess, gather insights, distill the narrative, and then adapt your strategic execution accordingly. The goal is to get knowledge for decision making.&nbsp;&nbsp;At the macro level, you may be navigating tumultuous economic, political, and social conditions, adapting to innovation, and <a href="https://quantive.com/resources/articles/what-is-esg">ESG (environment, social, and governance</a>) concerns. The hope is that you’ll be able to make smart changes to your destination and how to get there mid-process.At the micro level, routinely assess and adjust for:<ul><li>Efficiency and effectiveness: Optimize even en route&nbsp;</li><li>OKR progress: Search the data for underperformance, determine the cause, and decide whether the current OKRs set are still achievable and critically relevant</li><li>Insight and foresight (as opposed to hindsight): Look for warning signs through AI and KPI data for things like tech issues and business challenges to high churn rate among a customer group</li><li>Internal opportunities: Look for trends that lead to new opportunities like customer support data that may reveal an unmet or emerging customer need</li></ul>

Guiding your organization through digital transformation is like untying a knot on the end of a ball of yarn — doing so frees you, but it also starts to unravel everything else.Likewise, organizational leaders focused on <a href="https://quantive.com/resources/articles/okrs-for-digital-transformation" target="_blank" rel="noopener noreferrer">digital transformation OKRs</a> have freed their companies to compete in the marketplace of the future. Without it, many will not survive.But the hard truth is, you can’t solve 21st century problems using 20th century thinking. And you cannot overlay digital transformation on top of traditional ways of doing business. The entire operating model must change.<a href="https://quantive.com/resources/articles/what-is-the-modern-operating-model">The Modern Operating Model</a> is a set of principles and practical tools that guide enterprise executives to operational excellence using data and insights to make better and faster decisions. Adopting the Modern Operating Model involves a culture shift, new mindsets, and new habits.&nbsp;And this model is not just possible — it’s critical to the future of work.<hr>Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.&nbsp; &nbsp;&nbsp;As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy and playbooks from a static formulation to a feedback-driven engine for growth.&nbsp; &nbsp;&nbsp;Whether you’re a fast-growing scale-up, a mid-market business looking to conquer, or a large enterprise looking for innovation, Quantive keeps you ahead – every step of the way. For more information, visit <a href="http://www.quantive.com/">www.quantive.com</a>.&nbsp;

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