Why Creativity, Strategy, And Outcomes Form The Foundation Of Our Most Effective OKRs

Highlights from my appearance on “Giant Talk,” the world’s first OKRs podcast via the “There Be Giants” team

Creativity, Strategy & Coffee — Photo by Antoni Shkraba via Pexels

Listen to the full interview here

So a good place to start our discussion is around the common misconception that OKRs are a form of planning. Can you talk us through this misconception?

One of the main assumptions we start with is that OKRs are most effective when they are used to execute against a coherent, overarching Strategy.

So if you don’t have that strategy, and multiple teams or divisions are using OKRs as a substitute for strategy, they’re simply not going to provide the same value.

And Strategy that’s worth pursuing is going to be rooted in Creativity and Client-Centricity vs. Planning that’s rooted in Analysis and a purely internal focus. It’s the difference between working backwards from a real client problem that your organization is set up to solve. Versus starting with a laundry list of all the things executives or the sales team has decided they want the software teams to build.

The difference is you either take that Creative & Strategic approach, and start from Client-Centricity, and so you use OKRs to create a consistent set of coherent Outcome-focused goals to increase the odds of those Strategic choices becoming reality.

So the clue is always to follow the flow of value to the client.

If you’re missing the flow of value to the client in that equation, and there’s no clear overarching set of Strategic choices around how you’re going to meet that client’s unmet needs, it’s planning.

And there’s no guarantee the tasks planned have any kind of alignment, and are going to come together to deliver any real value.

The terms strategy and planning are often used interchangeably, when in fact they are fundamentally different. Can you briefly explain what each term means?

I’m going to use the definition used by Roger Martin, and he defines Strategy as a set of integrated choices based on thinking Creatively and Client-Centrically to imagine and shape a future where you will win.

Strategy is the essence of Leadership

Strategy is choice. Strategy is not a long planning document; it is a set of interrelated and powerful choices that positions the organization to win
Roger L. Martin

Planning is based on thinking Analytically and internally, assuming everything that’s been will continue to hold true, and that you are the customer.

Planning is the essence of Management

Business Schools, MBA programs churn out experts in Analysis and Planning. Most managers across most organizations use this approach. And even when they go outside of their company, and hire consultants, they tend to buy the same kind of Analysis and Planning they’re used to doing internally. When someone says they have a Strategic Plan, it’s probably more likely a Gantt chart release timeline plan with some milestones.

Probably 95% of everything that’s done is Analysis and Planning, and that’s where most people who come out of traditional business schools and management training feel most comfortable because it’s what they know best.

So people new to thinking Strategically will feel uncomfortable staying in that frame of mind

Given that some businesses don’t understand OKRs are a method for executing strategy, can you go into a little more detail on this?

Many organizations attempt to copy and paste OKRs onto their existing delivery dysfunctions, without first addressing the lack of that overarching Strategy at the top.

And if they do have it, it’s probably some sort of giant Strategic Plan, which usually turns out to be more or less a budget with some words, probably outlining a cadence at which they’re going to build and release things they’ve decided theywant to build out to customers.

A true strategy clearly lays out not only the choices an organization will undertake, more importantly, it’s going to be clear what it’s not going to do, or what it’s going to stop doing.

And many of the problems I see with OKRs come back to the notion of true Strategy being fundamentally Creative and Client-Centric.

When people try to set OKRs in the absence of strategy, or by using an Analytical and Planning mentality, you get many of these antipatterns:

  • Too many OKRs
  • Clearly conflicting OKRs
  • Uninspiring or insufficiently aspirational Objectives
  • Task-lists for Key Results

Again, it’s ironic, that something that would fit on a single sheet of paper — starting out with the Strategy at either the organizational or business division level, is the thing most often missing.

And the problems all flow from this miss.

(See here for my piece on Creativity & Strategy vs. Analysis & Planning for effective Objectives & Key Results.)

Organizations need to get out of Task-based thinking and into more of an Outcome-focused approach. Can you talk us through the creative mindset and how this differs and the benefits to the business?

I think you’ve hit on something there — the Creative mindset is really the key to imagining the world as it could be, where your business has already won.

Outcomes over Outputs has been around for a long time, and I believe it comes back to the same thing –

An Outcome is that alternative future you’ve created based on your Strategy of how Clients will change their behavior based on the specific set of “Where to Play” and “How to Win” choices you’ve made.

An Output is just something you decided to build.

I don’t think it’s a coincidence that the two main proponents of “Outcomes Over Outputs,” Josh Seiden in his book of the same name, as well as with his co-author Jeff Gothelf, in their book “Lean UX (3rd Edition),” both Josh and Jeff were designers and are both fundamentally very creative people.

Christina Wodtke, who wrote “Radical Focus 2.0,” (probably one of the two best books on OKRs) also comes out of a deeply creative tradition,

It isn’t a coincidence that the Creative mindset comes easier to these former designers and UX people.

And the biggest benefits would be getting that shared creative input from more people across the business, and simply innovating more across all levels

Another interesting topic you’ve spoken and written about is the concept of OKRs thriving in a culture of transparency. Can you elaborate on this?

In organizations that use OKRs effectively, everyone can see everyone else’s OKRs –

You have real clarity and transparency both vertically across the organization, so any manager can go to anyone on any team, and ask about their OKRs, and you have this shared shorthand for strategy, for what real value is being delivered.

And part and parcel of that is the notion that you’re very honest over the regular check-ins across the quarter of what your confidence is towards delivering against your Key Results.

So if a team is struggling to deliver their Key Results, their manager or leader would come and see how they could support them, get them whatever they might need to increase their confidence.

But if you don’t have that transparency, then probably teams aren’t checking in, and they come to the end of the quarter, and most likely miss their Key Results.

So this is where that combination top down and bottom up collaborative OKR-setting is so crucial — you need teams to be part of the process to commit to things they believe they can deliver. Yes, it will be hard, a stretch, but they sign on to do that, and it’s what keeps them inspired, motivated, and engaged. And leadership’s role is to check in and support that team with whatever they need to be successful in delivering those Key Results.

But without that transparency, the whole system breaks down

Of course for transparency to happen, you need a safe environment, one that is supportive.

What happens when your organization doesn’t have this kind of Psychological Safety?

In “unsafe” environments, you get what’s called “watermelon” status — and I’ll give Barry O’Reilly credit for that, because it’s brilliant.

Watermelon Status means when you ask a team how things are going, they’ll say, “Fine, everything’s great, we’re on track, we’re on budget, everything’s fine. Our status is “Green.” And it stays that way across every status report, and then the day before they’re supposed to push their code to production, they suddenly turn their status to “Red.” That’s watermelon status, because there’s no safety to raise your hand and say you need help when something still could have been done to fix the issue.

And this is where leadership has to lead by example — they have to model that behavior of openly going to teams and offering them help and support, regardless of whether they’re doing well or clearly struggling,

And unfortunately, all too often, I see people at very high levels openly embarrassing and calling teams out when they’re having challenges — challenges, might I add, that have been created by how the leader structured their division in the first place. Maybe too many Dependencies created by trying to boost utilization, trying to split one key person across 3–4 teams.

So getting those leaders the awareness and coaching to use Servant Leadership, to actively remove any blockers from their team’s ability to deliver against the goals they’ve set is crucial.

And some leaders say they just need the right people on their teams.

But it’s not the people. It’s the leaders.

And if you want the starkest example of that, search for the “Noah” video by Simon Sinek on YouTube. In less than two minutes, you understand immediately how a culture of safety either creates high engagement, excellence and great results, or bare minimum effort.

You wrote “It’s ok to ‘fail’ it’s all part of stretching, failing, learning and iterating” (testing, learning and adapting, we say here at TBG), how can this benefit the organization?

Without that safety to be able to allow people and teams to try new things, how will organizations be able to innovate and stay relevant?

And this is what well-written OKRs, in the service of an overarching Strategy can be so effective at doing.

If you’ve stayed in that Creative, Client-Centric, Strategic perspective, and collaborated in setting Outcome-focused OKRs, you’ve just liberated your team to figure out how to strike a path through Continuous Discovery to get there.

And this is the problem with falling into Analysis and Planning too early — if you’ve set your OKRs as lists of tasks, there’s only one right answer to each Key Result — it’s binary — you either delivered the thing, the feature, the marketing campaign, whatever, or you haven’t.

But if the goal is an Outcome, measuring how clients will be doing things differently, you’ve opened the door to exactly what you’ve laid out— teams will try different things and innovate in order to increase their confidence in moving their Key Result metric. If those Key Results are written as Outcomes, this will lead directly to clients achieving greater success for themselves in ways that also increase value to the organization.

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