"The key to strategy is omission. — Peter Drucker"

 

OKRs has become an all-or-nothing cult. Most teams and their leaders are confused, others claim they understood and religiously preach a specific version of OKRs that they have seen work in a (read: one) company they used to work at. Goal-setting systems, like any system, need to be tuned to the organization they serve. The organization should not be serving the tool. And so, I simply refer to “goal-setting” and then try to understand what companies actually need.Over the last years, I had this “How to…OKRs” cheat sheet on my shared drive. Everytime someone asked about goalsetting, I would share my cheat sheet and forget about it.

 

Until I realized: this might probably be the most requested resource in my library. It took me a couple of weeks to distill it to its essence but - without further ado - here are my key learnings.Generate Your Goals By Building A Driver TreeAligning teams around shared objectives is crucial. Instead of traditionally followed OKRs, I've found it more fun and effective in deploying the “driver tree” approach, especially when facilitating goal-setting sessions with executive teams for upcoming quarters. The magic of the driver tree lies in its ability to foster collective discussions, ensuring that goal-setting becomes a collaborative endeavour rather than an isolated exercise. Having a real-time conversation around a flipchart creates collective understanding of all the necessary parts that make the business succeed and inspires more entrepreneurial thinking. Ultimately, I am a visual thinker who thrives in motion, so the driver tree exercise is just a lot more fun for me.Step 1: Identify the Top-Tier GoalStart by pinpointing the long-term goal. This will sit atop of your tree diagram as the overarching objective your organization is aiming to achieve. This could be a business goal, such as boosting annual revenue by a certain percentage or achieving a particular level of market penetration.Step 2: Determine the Key DriversOnce your primary goal is established, identify the most critical drivers that will lead your organization to this target.

 

These drivers are the primary factors or conditions necessary for achieving your top-tier goal. They form the first branches of your tree. For example, if your long-term goal is to boost annual revenue, key drivers might include increasing product sales, reducing operating expenses, or expanding into new markets.Outcomes refer to the specific results or end states you desire to achieve. Think of them as future projections framed in the future perfect tense—like "I will have expanded to three new markets" or "We will have reduced operating expenses by 15%". These outcomes depict clear, tangible accomplishments that signify progress toward the top-tier goal.For any of these drivers, write down the outcomes you need to achieve your top-tier goal. How you get to these outcomes needs to be in the responsibility of the owner of this goal.Step 3: Break Down Each Driver into ComponentsNext, dissect each of these key drivers into their individual components, forming the lower branches and leaves of your tree. As you delve deeper into this analysis, the components will become more specific and focused. For instance, if one of your drivers is to increase product sales, its components might include marketing strategies, sales team performance, or customer satisfaction levels.Again, outcomes only!Step 4: Assign Metrics and TargetsNow that you have a detailed diagram of goals, drivers, and their components, it's time to quantify your plan. Attach a relevant, measurable metric to each driver, giving your team a concrete way to track progress. Furthermore, set a specific target outcome for each driver for the designated timeframe. These targets should be realistic and achievable, yet ambitious enough to push your team toward growth.Step 5: Collaboration and RefinementPerforming this exercise should involve a small, dedicated group comprising team leaders or members from different departments. A collaborative approach ensures diverse perspectives and a holistic view of the organization's objectives. Once the tree diagram is completed, share it with the larger team, gather feedback, and make any necessary refinements. It is important to open up the conversation and include all team members. When your colleagues get the opportunity to contribute, it will (1) make the goals more resilient by adding many more perspectives and (2) increase the sense of agency in your team because they know their contribution is valued. How can you do that?The process I use has three phases:Management thinks through the long-term (seven years, 12-14 months) perspective, then derives the first set of goals for the quarter. Communicates that to team leads or full company.Teams then come up with suggestions of how they think the goals should be formulated and measured. They also come up with outcomes they can contribute to these goals.Management collects all inputs and produces a final set of goals. Every goal has an owner and a project team that is put together from different departments. Team size is 4-5 people.