governance of — Transforming company strategy through governance of OKRs is essential for a successful organisational framework. Objectives and Key Results (OKRs) are widely recognised as a collaborative goal-setting system, made popular by leading businesses globally. However, many organisations struggle to implement OKRs in a way that resonates at every level. Jennifer Montague, the VP of Growth at Onomondo, made headlines in July 2023 with a stark statement: she declared that OKRs are dead. According to Montague, the typical practice of OKR goal setting has devolved into mere quarterly rituals, with objectives set by leadership and rarely connected to the daily operations of teams.
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In contrast, Ksenia Novikova, the Head of Ops & Growth at Flyer One Ventures, provided a different perspective a year later. She contended that if a company’s OKRs are ineffective, it is likely due to improper setup or usage. Both viewpoints highlight a significant challenge: merely refining the way OKRs are written or increasing the frequency of their reviews is insufficient. To avoid the pitfall of becoming just another quarterly exercise, organisations must rethink how they manage priorities. Essentially, OKRs should be approached as a means of governance transformation rather than just a planning tool.
Governance of: Lessons from a Global Technology Company
A notable example of how to implement this transformation is a global technology company that previously attempted OKRs but faced failure. After rebuilding their approach, they achieved a remarkable 16 per cent revenue growth in a period where the board had deemed 5–7 per cent as ambitious.
The Initial Attempt
Initially, when the tech company tried implementing OKRs, it appeared promising. With over 500 employees operating across 195 markets, the complexity was considerable. Objectives were articulated clearly, and planning sessions were conducted. However, despite these efforts, the organisation felt disjointed. A plethora of initiatives ran parallelly, with each department adhering to its own set of goals. This created an illusion of prioritisation without real focus.
Leadership recognised this fragmentation. Attempts to streamline goals were met with resistance, as old habits and new mid-quarter priorities resurfaced, leading to a return to a state of overload where everyone was trying to accomplish everything. Saying no to additional tasks was perceived as too risky, further complicating the situation.
Partnering for Change
In a bid to rectify these issues, the company enlisted the help of SOTA, a business strategy consultancy. The previous attempt at OKRs failed to yield meaningful results, even though the documentation looked pristine. The second attempt required a more profound transformation than mere surface-level adjustments.
Restructuring OKRs for Success
The first step in this new approach involved restructuring how OKRs were established and executed. A cap was introduced to limit the number of Company Objectives to three, each assigned to a member of the executive team. Beneath these objectives were a handful of Company Key Results, each entrusted to a single owner, rather than being dispersed across teams or functions. This change was based on the understanding that shared ownership often leads to a lack of accountability.
The second critical modification concerned the metrics being tracked. Rather than focusing on activities—such as the number of calls made or features shipped—the emphasis shifted to outcomes: metrics that would only improve if the underlying efforts were genuinely creating value. Each owner was tasked with understanding what they were measuring, why it mattered, and the factors influencing it. They also needed to be prepared to flag any stagnation in the metrics.
Creating a Culture of Focus
These changes prompted a significant shift in leadership discussions. With limited objectives and clear outcomes, resource allocation became a pressing issue. Prioritisation transformed from a mere list into conscious choices about what initiatives to pursue and what to abandon.
Three Phases of OKR Adoption
Implementing OKR restructuring alone will not overhaul an organisation; it requires learning, testing, and iteration. In this case, the company underwent three distinct phases over the span of a year.
- Phase One: The focus was on establishing the basics. Executives set objectives, assigned ownership, and facilitated the initial OKR cycle. The aim was not to achieve perfection but to clarify what qualified for inclusion in the OKRs—focusing on truly strategic priorities rather than routine tasks.
- Phase Two: This phase concentrated on enhancing the KR Owner role. Initial plans were often too broad, encompassing excessive operational tasks with insufficient strategic focus. SOTA collaborated with KR Owners to refine their plans and reframe goals as outcomes rather than mere activities.
- Phase Three: The focus shifted from the OKR process itself to how teams engaged with it. KR Owners began leading their planning sessions, involving board members only when necessary, thereby reducing reliance on external support.
Measurable Business Impact
After a year of diligent implementation, the company attained a 16 per cent revenue increase, significantly surpassing the original target of 5–7 per cent, alongside a 19 per cent rise in gross profit. By the third quarter, 75 per cent of employees reported clarity in the company strategy.
Crucially, the transformation didn’t occur after the first cycle or goal-setting session. Instead, it emerged as the organisation adopted the new system long enough for fresh routines to take root. A recent study of 21 teams using OKRs indicated a similar trend, where perceived goal transparency improved only after several cycles, suggesting that repetition and a consistent operating rhythm were fundamental to success.
The Key Takeaway
For any organisation contemplating the adoption of OKRs, it is vital to recognise that the framework alone cannot guarantee focus. When layered atop obsolete planning cycles, it merely becomes another quarterly document. The real question is whether the organisation is ready to embrace the governance changes that effective OKRs necessitate. As demonstrated by the global tech company, genuine transformation occurs when OKRs evolve into the cornerstone of priority governance, characterised by fewer objectives, clearer ownership, regular reviews, and explicit decisions about what not to pursue.
