How to use OKRs to bridge the strategic gap

At the Joseph Rowntree Foundation, we are using Objectives and Key Results (OKRs)[1] as the basis of our evaluation framework, which we see as being compatible with our transformation into a social change organisation focussed on outcomes. OKRs can be effective at every level of an organisation, from the mission and vision through high-level strategies down to delivery plans and the quarterly and weekly rhythms of day-to-day working. That’s not to say that they are identical at these different levels — they perform different functions when thinking about strategic goals compared with delivery goals.

Strategy level OKRs

At strategy level, OKRs are more about describing the kind of society, or economy or place in a market, that an organisation wants to contribute towards achieving. For JRF, because our ultimate objective[2] is to achieve a prosperous UK free from poverty by inspiring action and change, that isn’t something we can do by ourselves; and it’s subject to a whole load of other influences outside of JRF’s (or anyone’s) direct control. That doesn’t mean we shouldn’t have an inspiring and ambitious mission — it’s one big reason why people want to work for and are committed to the organisation. It also makes it clear to everyone what JRF stands for and what it’s trying to do.

Outcomes over outputs

But if an organisation is using OKRs in the first place, then it will already have decided to focus on “outcomes over outputs” and trying to change the behaviours of customers, stakeholders or service users; if not the world. Conceiving of the metrics to go with the vision puts flesh on the bones of what the real, quantitative changes ought to be if that vision were achieved[3]. This process itself helps to test and strengthen the organisational theory of change by forcing the vision to be made explicit. It also starts to break that big picture down into (slightly) more manageable chunks, which begin the journey to answering the question “how on earth are we going to achieve [insert vision here]?”.

Delivery level OKRs

In contrast, at the delivery end of what an organisation does, OKRs should be much more within the locus of control of the team that is doing the work. They should avoid being mere measures of outputs or tasks though — they still need to be at least a little over the line into affecting the behaviours and actions of people outside the organisation. In the case of JRF, these target ‘users’ are very often people with the power to change policy and practice to improve the lives of people in poverty — politicians, employers, landlords, the media and, in turn, the wider public (who can help create the context for political change)[4]. At delivery level, OKRs work best on a tighter time frame, with quarterly targets and fortnightly check-ins. At strategic level, that frame is much longer, with organisational visions looking decades ahead or even further into the future.

Gotta have faith…

Setting OKRs at each level of an organisation helps to tie in and nest delivery of projects and initiatives within the strategic aims. This is a loose nesting, however. There will always be a ‘strategic gap’ between the vision and the actions that are taken day to day. This gap is inevitable, and it can be disconcerting; but ultimately an organisation must have faith in — and rigorously test — its theories of change. Every OKR is like one miniature theory of change that is being trialled, either rapidly (in the case of delivery OKRs) or the longer-term (in the case of strategic OKRs). This process is valuable because it embeds learning into an organisation’s DNA and if done well, enables a change of direction when those theories of change turn out to need a tweak; or a push of extra resources if they seem to be working.

Ultimately, using OKRs up and down an organisation is likely to be one of the most effective ways for it to learn, and to live up to its own stated reason for existence.

[1] If you want to know what OKRs are all about, see here.

[2] The ‘ultimate objective’ for an organisation = “achieving the [vision] by doing the [mission]”.

[3] E.g. the key results for our ultimate objective are real-world reductions in poverty levels.

[4] A lot of our delivery level OKRs are therefore about increasing engagement with those groups and indications that they are interested in, talking about and taking action on poverty.

How to use OKRs to bridge the strategic gap was originally published in Inside the Joseph Rowntree Foundation on Medium, where people are continuing the conversation by highlighting and responding to this story.

As a resolutely evidence-led organisation, JRF seeks to apply the same rigour to our own practice and evaluation that we’d want governments and those in power to apply to their policy-making and practice. We have also spent some time lately reconfiguring ourselves from primarily a funder of social and economic research into a truly modern social change organisation, focussed around a set of four strategic outcomes, with ambitions to become more agile in the process.

Given these underlying principles and aims, I was looking for a way of bringing together an outcome measurement framework that was evidence-led but also agile and modern. I came across, serendipitously, the Objectives & Key Results (OKRs) approach, set out brilliantly by Dan Montgomery in his book “Start Less, Finish More” (the title of which motivated me to start and finish it in a single rail journey back from London to our base in York!).

What are OKRs anyways?

OKRs are a simple but strategic way of being clear about what we want to achieve and where we want to get to (objectives) and how we will know that we’ve arrived (key results). They deal with one of the main problems facing modern organisations — how to actually execute their painstakingly-crafted strategies. OKRs — if done well — also support transparent working and alignment across an organisation, empower staff to innovate and own their results, and perhaps most importantly to learn about what does and doesn’t work in our ambition at JRF to inspire action and change to solve poverty in the UK.

The way they work in a strategic sense is to set OKRs at every level of activity. We are doing this now, starting with our vision and four outcomes:

1. More people want to solve UK poverty, understand it and take action

2. More people find a route out of poverty through work

3. More people find a route out of poverty through a better system of social security

4. More people live in a decent, affordable home

Those are our strategic organisational objectives. The next step was to come up with around three to five key results that would demonstrate those objectives had been achieved. Because our vision is so broad, ambitious and multi-faceted, these results are not things that we can just pull a lever and get the job done. They rely on employing a wider range of tactics and concentrating the use of all our resources for several decades. Solving poverty is not a quick fix. But having a single vision and specific outcomes gives all of us at JRF a clear sense of what we are trying to achieve together.

An example might help to make more sense of this. Take our vision: “A prosperous UK free from poverty” — that’s our overall organisational objective. An obvious first key result would be a target rate for UK poverty overall. And we think that it’s practically possible to roughly half the level we have now to 10%. That would be in line with the best that’s ever been achieved in other countries or in the UK in the past.

But even if we got to that point, it could be that the same one in ten individuals were in poverty permanently. That clearly wouldn’t be acceptable. So, we added a second key result that no-one should be in poverty for more than two years (other evidence indicates that unemployment of longer than two years starts to have more severe later effects). But even then, we could be in the situation that everyone in poverty is in really deep poverty — destitute. That would be a bad outcome — we therefore added a third measure that no-one should be destitute. Currently our research with Heriot-Watt University shows 1.5 million people experienced destitution at some point during 2017. But even with these three key results, the job would not quite be done because it could still be true that certain high-risk groups (if not individuals) are in poverty more or less permanently — lone parents for example. That means a fourth key result is needed to be clear that no major sub-group of the population should continue to experience unduly high poverty rates.

That gives us a final OKR formulation of:

OBJECTIVE: A prosperous UK free from poverty

KEY RESULTS:

1. A poverty rate of no more than 10%

2. No-one in poverty for more than two years

3. No-one destitute

4. No major sub-groups with a very high poverty risk

And it’s important to set a date for an OKR — strategically, the JRF vision has at least a 20-year horizon. Given that scale, we need to break this down into more manageable chunks.

So, what next?

We are now going through the same process for each of our four outcomes, which in turn consist of a set of delivery plans being put into action by a set of delivery teams. OKRs will be the glue that binds the strategy together and makes it clear to everyone in the organisation who is working on what and to what ends. These proposals are currently going to our trustees and I’m very excited about putting OKRs into practice in 2020 — the real learning and value will come when we test them against the real world. That clarity will be sorely needed to help us influence a new UK government and our other important stakeholders to take the actions needed to make serious inroads into poverty in our country.

OKRs rule OK was originally published in Inside the Joseph Rowntree Foundation on Medium, where people are continuing the conversation by highlighting and responding to this story.