OKR starts from the top.
Management comes up with a set of company OKR or top-line OKR that serves as the North Star for the whole company.
The top-line OKR typically is set for a specific period. For example, for a quarter in 2020 (Q1 2020).
The top-line OKR sets the direction where the company as a whole, i.e. not only the Management, will set forth.
OKR connects every individual in organization to the company goals by creating vertical and horizontal alignment.
Vertical alignment
Once the top-line OKR is finalized, each division such as Business, Operations, Marketing, and so on is expected to formulate their own OKR.
More importantly, each division KR must align with with one (1) or more top-line KR. In other words, achieving any of the division KR will help the company achieve its goals.
Each division KR is a lever to move the company's needle.
If the division further consists of sub-divisions or teams, then the alignment exercise repeats: each team should formulate its team OKR and align it to the division OKR. What is achieved by the team must have a direct impact on the division OKR.
The option to adopt individual OKR is covered in detail in this article.
This way, a clear alignment from the very top to each division (and to each team, and to each person) is established.
As indicated in Diagram 1 above, each square OKR is connected to one another above and below it, all the way to the top-line OKR.
Note: When we discuss a vertical alignment, please make sure you understand how these 4 terms relate to one another. These terms are all bolded in the above paragraphs.
- Company OKR or top-line OKR
- Division OKR
- Team OKR
- Individual OKR
Horizontal alignment
Each division, team, and individual are encouraged to have their own OKR. They need to own and commit to it. If we’re not careful, however, this is where conflicts can happen. We’ve seen how some people were so committed to their OKR, so much so they used it as an excuse not to help other divisions or teams. What mattered is their own achievement. This is the antithesis of the spirit of OKR. The achievement of one’s OKR should not come at the expense of the others. OKR wants to cultivate collaboration, especially across divisions and teams, instead of building walls and creating silos.
For cross-collaboration to happen, horizontal alignment must be built. It’s the responsibility of each division lead (and team lead) to ensure they’re supporting one another to achieve their respective goals. A simple question, such as “What can my team help you with to help you achieve your OKR?”, can go a long way in building bridges between them.
In such cases, we’re tying the achievement of one division OKR to another division or team. This dependency is not a disadvantage. If anything, this encourages them to work together; they’re all moving toward the same direction. When the alignment is properly built, then the company will move in harmony toward their objectives.
