The OKR performance reporting process is core to the double-loop learning required to develop agile management practices and to successfully execute on your strategy. This feedback completes the Management Control Loop. There is a critical second feedback loop - how we are doing against our OKRs: This is the performance reporting process (the new arrow on the right). Their financial performance informs the budget and financial world of what has occurred. So the budget funds the departments and processes to get work done. Only about 25% of the OKRs will have budget numbers associated with them, but the linkage between the majority of your OKRs and the budget is critical to strategy execution. Once you have settled on the strategy and the resulting top-level OKRs, we can use the OKRs to inform the budget. In total, this becomes the Strategic Learning Loop (but there is more to come on that process.).Įverything you need to know about successful Strategy Implementation in your organization Step 2 Based on what the organization thinks that it can do, the strategy should be refined (the 'update strategy' arrow). The forming of your OKRs (the 'test the hypothesis’ arrow) allows the organization to test your strategic hypothesis. What would I see more of, or less of, as we work towards that Objective? (Your Key Results).What do we need to do this quarter to move towards our longer-term strategy? (Your Objective).From the strategy we need to develop our OKRs answering: The start of any financial planning process is your strategy - what people these days are calling your "North Star". What you will find below is an abbreviated version of our 90's research, restated for OKRs. Much to my surprise, I found the best answer (I think) was in work that I was involved in at The Balanced Scorecard Collaborative in the late 90's. I began doing some research to see what had been written on the topic so far. I decided that it deserved a better answer. But this was a great question and was something that (I thought) I had not considered. He asked for an explanation, which I did not do justice to at the time. Once a client asked me, "What role do OKRs play in the financial planning process?" My knee-jerk answer was that OKRs and Financial Planning are two sides of the same coin. Financial processes are made simpler with OKRs due to the requirement of extensive number crunching and assessment of financial strategies. OKRs are so effective and useful that they can make every department’s life easier… including Finance!īeyond assessing and gauging expenses, revenue, and cash flow of the company as a whole, they must be accountable for analyzing the financial health of individual departments.
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