“Navigating new terrain without a road map is hard”, is an old saying that fits well for scaling a business. Having a future-proof business strategy is the first and the foremost step to getting things on track- defining your company’s mission, creating goals, and creating a plan to achieve them.
This is where OKR Software play a major role. But experts say that in order to get the anticipated success, it’s important to put Strategy first and foremost, even before OKRs. Through this blog, we will take you through five reasons for the same. But before taking the deep dive, let’s learn some basics.
Why is Strategy Important for any Business?
So to keep things precise, a business strategy is a set of decisions and roadmap that will direct the company in achieving high-impact business goals. It’s important for any business regardless of the size and shape of the organization and Industry. A well-made business strategy is the only thing that gears the entire organization up to move onto the path of growth and profitability.
Not only this, an effective strategy links all of the departments and employees of the organization. So much so, focusing on the strategic plan will make you see the benefits of your department bleed into different aspects of business operations, sales, productivity, and overall performance.
However, scaling businesses these days either overlook the strategy building or make it a flurry of paperwork only- facing the repercussions eventually. A report by Harvard Business Review claims that 95% of employees aren’t aware or don’t understand the overall strategic plan of their company.
In this case, just setting OKRs is not enough; you need to understand and make the whole company understand the company’s Strategy. Creating a business strategy helps you in:
• Effective planning:
It’s an old saying, ‘who fails to plan is planning to fail.’ The same is the case of businesses today. Creating a business roadmap helps track the progress against the annual operating plan and acts as an essential management tool for the company. The business operates on both short-term and long-term plans. A strategy plan binds together the immediate plans and the well-articulated plan for the coming three to five years.
• The SWOT Analysis:
When you strategize, you become aware of the position you occupy in the competitive landscape and the opportunities you must absolutely grab. Knowing the early threats and strengths will help you carve out your niche in the market. No one knows your business better than you; thus, when you spot the weakness and threats at an early stage, it becomes easier for your business consultant to spread the higher level of awareness and provide the necessary measures to cope with the organization’s success.
• Better Allocation of Resources:
You have great resources, but if you don’t know how to use them for channeling growth. Where’s the gain? Thus, strategic planning helps in better resource allocation where you can ensure the deployment of the correct resource that delivers the most promising results within the given time frame. What products, services, and markets will be put in what place at what time is another aspect that falls under better resource allocation using strategic planning.
• Scanning Business Environment:
The business environment is the most dynamic thing ever; it keeps on changing whenever a new trend comes in. Making a strategy keeping in mind the business environment makes the overall playbook more flexible and gives a better idea of both negative and positive aspects of the changing landscape to the CEO. Thus, by prioritizing Strategy, C-suite managers can proactively pursue the decisions that will impact the organizational design for the un-intended business state
Now that we’ve reached this far, let’s know why we are pressurizing to put the Strategy before OKRs.
Because OKRs unaligned with Strategy is just a shot in the dark
An OKR framework will only take your company to its goals if it is aligned with your strategy! The Strategy brings everyone on the same page way before so that they understand the OKRs and decrease the chances of chaos during OKR implementation. Objectives and key results are the unified mission that Strategy puts together. To be true, 95% of employees of many companies are not aware of the company’s direction they are moving towards; in this case, if you introduce OKRs in such an environment, they’ll get even more confused.
Thus, in this case, the best-case scenario is first making the Strategy, communicating it within teams, and then introducing the OKRs for achieving the best results.
You’ll be able to set defined accountability:
When you write objectives and key results, you often break them down into metrics that your company people can use on a daily basis to work on the end goals; managers can use these metrics to evaluate how their team is performing.
Now, for evaluating each one task, there should be accountability in case of missed targets. When you implement Objectives and key results before setting the Strategy, employees remain unclear and end up creating chaos. For this, we recommend making a defined strategy depending on the nature of the business that says who’s accountable for which key result.
Looking at the buzz around OKRs, the idea of plunging right into implementing them will look lucrative, but it will only end up creating chaos. When you make the Strategy, the OKR success is half done already. Thus, while making the Strategy, ensure that all the department levels align with your overall business and are efficient enough in the key areas that need to be addressed priority.
Now, it’s a herculean task for the managers and decision-makers to take out time for making the Strategy. Consultations from an OKR and performance management system consultant will be immensely valuable.
At JOP, our consultants double as OKR experts! We take time to understand the ins and outs of your business and create a full-proof strategy for your business that helps in optimizing your organizational culture. Book a demo with us today!