(2022-01-24) Schmidt OKRs Are Not Strategy

Daniel Schmidt: OKRs are not Strategy. It’s easy to be sloppy in our thinking when conceiving product initiatives. We often prioritize doing things that we “know” must be done

Asking ourselves, “What is the key result for this initiative?” forces us to think about what matters to achieve the critical business outcomes. KRs are slicing mechanisms. Through the OKR process, we often discover short paths to outcomes that we previously assumed would require much more work. Sometimes, through contemplating KRs, we realize that projects we were convinced must be done actually don’t fit with company priorities and therefore shouldn’t be done after all.

The root problem with how most companies do OKRs is that they enter the process with strategy debt. (strategic context)

The North Star Playbook that John Cutler refers to is an example of how “strategy” can be expressed. For metrics-driven companies, a strategy is a model for (1) how types of events and work influence measurable outcomes, and (2) how leading indicators influence lagging indicators.

My last post, Metrics-driven product development is hard, explains the diagram in detail.

If you already have a business strategy, that is, a persistent model of how your business functions, the OKR process is radically more effective and efficient. When a company lacks a persistent model of their strategy, people feel the gap and try to model their strategy in the form of OKRs. But using OKRs as the sole articulation of your strategy is toxic overkill.

At DoubleLoop.com, we believe you should build a persistent model of your company strategy, in the style of the Northstar Playbook, before you do OKRs.

It’s fine to try to move a metric up or down without a clear target. It takes cycles of tinkering before you have a sufficient feel for the metric to design a key result for it.

Branches of your product strategy will likely stay fixed for long periods of time, even years. You shouldn’t feel like you have to revise the whole thing every quarter.

Focusing first on the persistent model of your strategy is your ticket off the quarterly OKR hamster wheel.