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While the objectives need to be specific, this is not the starting point. In order for the objectives to be aligned on, it is important to start with a vision, develop a strategy to align on this vision, and only then move to implementation. In his eight-stage process, John Kotter sees two steps (One: developing a vision and strategy, and two: communicating the change vision²) following immediately the creation of the sense of urgency and creating the guiding coalition. Once the cause is established and the leadership team is formed, the next step is to align on a compelling mission and vision. This is why mission statements are so important for future success.

The mission statement is a cross-company effort created by leadership at all levels. It has been noticed time and again that if the mission statement is not compelling enough, then business success is not possible. For example, if the mission is purely revenue-based, it is not sufficient for employees to be intrinsically motivated to go above and beyond to achieve it. If, however, the mission appeals to their sense of purpose, they will produce outstanding outcomes and money will come as a result, and even if not, they will not be discouraged and will pivot because the goal will still be important to them. In cases of financial motivation, the first failure discourages the team and prevents future pivots in implementing the vision.

What I Learned from Implementing These Concepts in Big Corporations

Senior executives are convinced that the vision they crafted is shared by the entire organization. This is not in alignment with reality; my experience has shown that in many organizations the opposite is often true. While the vision is shared among senior leadership, employees are not contributing to the vision, and while it may seem that communication channels are open, they are not. When asked, employees can’t articulate the vision and moreover can’t relate and connect the vision to their daily activities.

Consider the insurance company that started on the path of lean startup and put forth a vision of a complete lean agile transformation. When middle management had to articulate requirements for a new policy administration system, they reverted to recreating the system already in place: a legacy system that was slow, often requiring manual processes, and in no way supported the transformational vision. Later in this chapter I share the concept of an agile open space to create, refine, and communicate a vision among many participants; I learned the hard way that vision sessions that occur in an offsite and include a small group of senior stakeholders rarely succeed.

Here’s another example: “The Group’s goal is to offer attractive, safe, and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class.” This is the Volkswagen Group’s mission statement from 2013,⁸ before the story broke in 2015 that Volkswagen deliberately buried emissions results in its software. With no mission or shared values, there is no hope for achieving these goals ethically and business-wide.

I had worked for an educational company that had a mission of becoming the best educator in the world. This happened when online education was blossoming, when new remote education and “teaching from the back of the classroom” techniques were becoming more and more popular. There was a strive for education to become more affordable using online sources: coursera.com was already becoming a mainstream company, and yet this company was ignoring the signs of a changing world and continuing to prioritize its traditional tutoring practices while attempting to use modern technology to sustain old business models. So in big town-halls when company executives were presenting their mission of “being the world leader in education,” you could look around the room and see that it did not resonate with the audience. In fact, it produced the opposite effect, demonstrating that senior leadership was out of touch with reality.

It took this group of leaders a while to realize the misalignment and, to their credit, they changed the mission statement to a more compelling and more realistic one of “to help every student realize their potential and achieve their educational and career goals.” This brings up an important point regarding mission statements that are internally facing (I do not believe that the town hall version was shared broadly) vs. mission statements that are aimed at creating a positive image of the company and promoting its brand. Ideally, a mission statement should be the same for employees and the public, which is the case if the mission and vision are authentic, ethical, and realistic.

Communicate your mission statement and seek feedback on each and every aspect of it. Based on personas identified previously, identify your audience and look at your statement through their eyes. To do so, do internal brainstorming, reach out to your customers, and avoid letting your internal marketing organization define your company’s DNA without direct feedback from the people you work for. Have your employees do brainstorming, debates, have competitions for best wording, polls for most compelling statement; in other words, crowdsource your vision and mission statement. Stay authentic but also let it be a little bit of a future vision and a little bit of a status quo that reflects your ongoing values. And once you come up with it, communicate it in information radiators, conversations, awards: “make it stick.” You can find great advice on how to make it stick in a book by brothers Heath called Made to Stick: Why Some Ideas Survive and Others Die .⁹

The same concept applies to the mission and vision statements.

In their book Switch ,¹⁰ the same Dan and Chip Heath suggest a helpful technique called “destination postcards” which provide an inspirational and vivid picture from the near-term future. By pointing to an attractive destination, the visionary applies his strengths to figure out how to get there, instead of getting lost in analysis.

What I Learned from Implementing OKRs at Large Companies

These are fundamental questions to answer before starting any new product development; they provide a practical way to validate your vision. If the answer to any of them is negative, there is no reason to create this solution. This sequence is also extremely important because you need to understand what customers need before proposing a solution. The principle is “fall in love with the problem, not with your solution.” Active listening is as key here as it is in personal relationships, just in a different form.

And finally, once the company listens and understands the customer needs well enough, there are several key techniques that help align at an enterprise level. The one I am going to discuss here is OKRs (objectives and key results). It’s not a new concept; it was first used by Intel and then implemented by Google and successfully used by many startups. See a “non-fictional fiction” called Radical Focus by Christina Wodtke.¹³

OKRs are now becoming a successful means of aligning objectives and key results across major enterprises, top-down and bottom-up. A cascading way of aligning on common objectives and measuring progress on a continuous basis across the organization changes the way how progress is achieved, measured, and rewarded in a corporate setting. By providing well-aligned OKRS, an organization creates a roadmap that aligns with its long-term vision and mission. This brings vision, ideation, and execution together at an enterprise level.

OKRs as shorter-term objectives need to align to the “destination postcard” (success criteria described by Dan and Chip Heath in Switch and mentioned above) and needs to be measured; otherwise the goal will be never achieved.

There are multiple ways of grading OKRs to define whether the result has been achieved, but the major concept is that OKRs should never be used for performance assessment purposes. They need to be aspirational but realistic, and created by people who want to achieve them in accordance with the cascading enterprise objectives.

For example, if a public educational company wishes to provide winning test prep strategies for students, the organization has a responsibility to its shareholders to increase profit per share as well as to the students and their parents to enable them achieve high text results. Within the organization, there are tutors who need to teach students to improve their test scores; marketing to make students, parents, and their schools aware of the opportunities; sales to provide helpful pricing strategies and execute sales; and facilities to provide classrooms or technology to develop and support learning apps. Each of these functions supports the corporate goal from its own perspective.

OKRs have to be measurable and specific. From a business perspective, it could be 3% growth per share during a calendar year. From a student perspective, it could be 5% higher average test score. The Google way of grading OKRs is widely accepted (0 to 1, where 0 means “have not started” and 1 means “fully achieved”). From this perspective, 1 is as bad as 0 because it means that the OKR was not ambitious, while somewhere around 0.7 is considered a success. In my experience, I’ve seen OKRs measured in percentages as well as on a specific scale, such as Net Promoter Score of 0 to 10.

Bain’s Net Promoter System is based on the fundamental perspective that every company’s customers can be divided into three categories. “Promoters” are loyal enthusiasts who keep buying from a company and urge their friends to do the same. “Passives” are satisfied but unenthusiastic customers who can be easily wooed by the competition. And “detractors” are unhappy customers trapped in a bad relationship. Customers can be categorized based on their answer to the ultimate question: “How likely are you to recommend our company to a friend or colleague?” It’s a 0-10 scale with 10 being extremely likely to recommend and 0 being not at all likely. Responses to this question are divided into three categories: promoters (rating of 9-10), passives (rating of 7-8), and detractors (rating of 0-6). This scale is sometimes used as a metric for OKR grading or as an OKR measurement in a consumer-facing businesses.

Whichever measurement it is, the OKRs should be pregraded to remove ambiguity. Pregrading happens when OKRs are created, discussed, and agreed upon in a group setting where the group agrees what is 0.3, 0.5, 0.7, and 1. For example, if an OKR is to increase average student SAT scores by 20%, they may agree that any increase would give them 0.3, 10% increase is 0.5, 15% increase is 0.7, and 20% increase is 1, and then everything in between will become intuitive. This pregrading takes any ambiguity out of the final discussion of “Did we meet our OKRs or not?” For this reason, binary OKRs are rarely a good idea because they may be extremely demotivating. For example, if there is an OKR to get a Webby award for the best learning app, and the award goes to another company, is it a 0? What if this app got a “customer appreciation” award or a Codie award? Is submission for nomination a considered progress merely because it brings required learning for the next year? All of these questions can be avoided if this OKR is not formulated as “yes/no.”

The number of OKRs reflects the company’s ability to prioritize its objectives. The key is relentless prioritization. In the example of the manager who tied OKRs to individual performance, the same manager insisted on each of his teams having a set of OKRs and then added his own on top, thus creating 10 or more OKRs for a 20-person organization. This was unmanageable and created unbalanced workloads for employees. The lesson is that the number should be 3-5 (and no more) for each team.

Finally, let’s touch on the concept of ownership, the most controversial topic within the OKR concept. Should there be individual OKRs, which create potential conflicts between functions and individuals, or team-based OKRs only (such as Sales OKRs, Marketing OKRs, etc.)? My suggested approach is to make OKRs team-specific rather than putting a name on OKRs so that they do not become a threatening management tool for those managers who exhibit top-down thinking. I’ve heard concerns that team ownership means no ownership without a name attached to each OKR and people won’t take responsibility if they do not feel personally accountable. I believe that this approach comes from a lack of trust and misinterpretation of the concept of a “team” in a modern work environment. In a healthy environment, people feel accountability and association with their team strongly enough and they do not fear individual responsibility to motivate them to achieve their goals.