Using a ‘Silicon Valley for the Rest of Us’ Strategic Agility Approach for OKRs

How can the workplace fuel personal and organizational growth? And how can this mindset transform society? 

Dan Montgomery is driven by the idea of the workplace as a “theater” for personal and organizational growth — and society as a whole.

Dan is the Founder and Managing Director of the boutique consultancy Agile Strategies.  His diverse career as a human resources professional, a psychotherapist, a systems and process designer, an executive coach, and a business strategist have led him to develop a unique approach for Objectives and Key Results (OKRs). 

Dan thinks of it as “Silicon Valley for the rest of us.” In his book, Start Less Finish More, Building Strategic Agility with Objectives and Key Results, he explains the five steps to creating an agile strategy. He covers the theory behind OKRs and how to implement them, what it means to be strategically agile, and why agility is so important. 

Dan discussed the five steps to strategic agility on an episode of the Dreams With Deadlines podcast. Continue reading to learn about Dan’s approach to building strategic agility for businesses of any size. 

 

10-Second Summary

  • Agile strategy is a five-step, scale-independent model that will work for any sized organization. The model is timescale independent and can be applied to the current quarter, or the next three years.
  • Organizations work with 3-5 year traditional strategic planning cycles, which assumes that the future is relatively predictable and isn't changing quickly. But as the last two years have shown, life is not predictable. Agile strategy offers a solution.
  • One secret of agile strategy: do more strategic thinking and begin with the end in mind, instead of focusing on a to-do list. Then, adjust the plan regularly with weekly check-ins. 

 

Too many decision makers are bad for OKRs

Dan says that we are observing the rise of the overburdened matrix organization. Organizations with hierarchical silos deal with individual products and projects. So many people are involved in every decision that it slows down the decision-making process — this is where the term “overburdened matrix” originated. 

These organizations know they're not agile, and they’re unable to pivot in response to changing circumstances. That’s why “different” is imperative. 

A different way of visualizing the organization is needed to build horizontal alignment in the organization. How? With shared OKRs cutting across those silos, acting as the wiring that connects them.

OKRs and strategic agility are the antidotes to an overburdened matrix organization. 

 

Strategic agility: why you need to start with the end in mind 

If your organizational strategy is simply a list of projects, it might be time to change your perspective.

Strategic agility is anything but a to-do list. It’s focused on the outcomes, not the projects; the results, not the tasks to get there. It encourages us to be flexible about how we arrive at our desired outcomes so we do more strategic thinking, beginning with the end in mind.

Strategic agility requires us to continuously sense the environment, making choices about which direction to go (and not to go), and trying to discover new sources of customer value. 

It fits in perfectly with the ecosystem style of business prevalent in companies like Apple and Amazon. Apple created an ecosystem of application developers for the iPhone, and their success is tied in with the success of their application developers. Amazon did the same with all of its suppliers. This ecosystem business creates value for the customer, supplier, stakeholders, and employees.

Using OKRs for goal tracking is powerful because focus the entire team or organization on one goal, rather than each individual worrying about their own tasks or to-do lists. “OKRs are a team sport,” says Dan. 

 

Creating your ‘minimum viable strategy’

Where Agile talks about developing a minimum viable product, Dan talks about a “minimum viable strategy.” Instead of an 80-slide PowerPoint built with incredible detail about a company’s exact plans, the minimum viable strategy focuses on the foundations of the plan: purpose, values, and just a few priorities. 

The execution of the strategy is reflected in constantly shifting OKRs. “Typically the OKR cycle is a quarter — and that's a good place to start. Some of them may need to be longer and some of them should be shorter,” says Dan.

 

The mindset of creating strategic agility-type plans

Dan says,In an environment that's merely complicated — which most of our business management systems were developed for — if you analyze enough data, you can develop an optimal solution.” 

Today, however, we need to stay more flexible. “We're moving away from the idea that the environment we operate in is like a big machine and if we can just understand the mechanics of it, we can be successful.” 

Creating a strategic agility-style business plan requires a mindset shift, which raises questions like:

  • How should leadership be thinking when they're creating this type of plan? 
  • If the comfortable 80-slide PowerPoint presentation is no longer effective, what can we do instead?

With this new mindset, teams must embrace trial-and-error. If it’s successful, it can be scaled up. However, when processes scale up, something else may shift in that environment —it’s not a static approach. 

As Dan says, “that's something they figured out in the start-up world a while ago… There's a lot that we can learn from what developed in that environment that applies to really any kind of business or organization.”

 

The 5-step agile strategy cycle 

To help organizations implement this approach, Dan has developed a five-step scale-independent model. They are typical of the steps you'd find in any rigorous, strategic management process — not just the planning, but the execution. 

The five steps: 

  1. Assess
  2. Focus
  3. Commit
  4. Act
  5. Learn

 

✔️ Assess

This first stage is about observing our environment. We imagine our environment as an ecosystem, looking at what's going on with the talent we have and the talent we're trying to attract. 

We ask the following questions: 

  • What's changing with our customers? 
  • What's changing with our suppliers?
  • How are new technologies enabling us to do something different? 
  • What's happening to the economy?
  • What's happening to the environment?
  • What’s happening to our health? 

Conversations for observation are prevalent in this stage where we need to attack fixed mental models. This gives us an assessment of what our reality is at this point and what the trends appear to be.

 

✔️ Focus

In the second stage, we make decisions about what we're going to do — and what we're not going to do. 

Here, we ask questions like: 

  • Are we going to go all the way into direct-to-consumer marketing and delivery? 
  • Are we going to stick with bricks and mortar? 
  • Are we going to expand into China? 
  • What are we going to do? 

 

These conversations are all about possibility. This is where we want to encourage open brainstorming and promote the concept that there are no bad ideas. It’s a time to get all the possibilities out on the table. 

This is important: we do need to make a choice in this phase. We’ll need to say no to many ideas that came through in the brainstorming sessions. 

The important thing to remember is OKRs are a fast cycle — the fact that we say “no” to something right now doesn't mean it’s off the table forever. This is the time to say yes to some ideas and park the rest. We can revisit the parked ideas and see if they make sense then. 

 

✔️ Commit

This stage is whereOKRs come in. The objective is an aspirational statement, and the key results are specific targeted measures. 

Dan says, “I think the objective can be like poetry — it should be inspiring. It should hit you in the gut. It should get you out of bed in the morning. The key results keep you honest — they're very specific and measurable.

Here, we ask these types of questions: 

  • In the near term, what kind of outcome are we going to commit to? 
  • What will success look like? 

This is an important phase because if a team has vague goals, it can argue about whether the goal was reached.. It’s like New Year’s Resolutions— did you lose weight, or not? How much weight did you set out to lose? If your outcome wasn’t clear from the start, then you have no way to determine if you’ve achieved it. 

Dan uses the term “commitment” because people talk about accountability, which too often can mean, “I tell people what to do and they don't do it.” Dan says, “To me, commitment is a mutual promise that has to be negotiated by people who feel empowered to say no.”

 

✔️ Act

This stage is where “the rubber hits the road.” We have a quarterly OKR and a weekly check-in to review the actions that the team is taking. As Dan says, it’s similar to an Agile check-in.

Questions asked might include: 

  • Objectively, how are we doing on the key results? 
  • Subjectively, how are we actually feeling
  • Do we think we're going to get there? 
  • What's going on, and what are we doing about it? 

If we don't bring OKRs into the regular management agenda, people tend to set it and forget it. This is the phase where we have conversations for action where we determine who does what, then we check back in the following week and ask additional questions: 

  • What did we get done? 
  • What obstacles did we run into? 

 

✔️ Learn

This is the final step, based on Dan’s extensive experience in the IT field where the different project methodologies recommended doing an evaluation at the end of each project. 

What he found, however, was that a lot of professional services and consulting-type organizations never actually had the time for it. Realizing that this was critical to the process and shouldn’t be skipped, he built it into his five-step system. 

Questions to ask at this stage include: 

  • What worked? 
  • What didn't work? 
  • What would we do differently next time? 

Applying military tactics in business 

If this five-step strategy sounds familiar, it’s because the Agile strategy theory has elements in common with a military concept known as the OODA loop

OODA stands for observe–orient–decide–act, developed by military strategist and United States Air Force Colonel John Boyd. The loop is a series of sequences meant to be kept in continuous operation during combat.

The four stages can be applied to business in the following way: 

  1. Observe. In this first step, a person observes a situation that is broken or could be improved. 
  2. Orient. Here, a person asks what part of the process might be broken? What is causing the current situation? 
  3. Decide. After evaluating the situation, the team decides which action to take. 
  4. Act. Finally, the action is taken. From there, the loop begins again as the new situation is observed. 

This article is based on an episode of Dreams With Deadlines by Gtmhub — the strategy meets execution podcast, where you'll hear real stories of trials and victories in business. The show is hosted by Jenny Herald, VP of Product Evangelism at Gtmhub. Subscribe via Apple, Spotify, or wherever you listen to podcasts to hear their discussions with thought leaders and learn how to shrink the gap between strategy and its day-to-day implementation. 

 

Top quotes: 

 

In an environment that's merely complicated — which most of our business management systems were developed for — if you analyze enough data, you can develop an optimal solution.”

 

“OKRs and strategic agility are the antidotes to an overburdened matrix organization.” 

 

“We are observing the rise of the overburdened matrix organization. Organizations with hierarchical silos deal with individual products and projects. So many people are involved in every decision that it slows down the decision-making process.”

 

The important thing to remember is OKRs are a fast cycle — the fact that we say “no” to something right now doesn't mean it’s off the table forever.