In this episode, Jenny Herald speaks with Dan Montgomery, an OKR consultant and author, about the importance of OKRs (objectives and key results) in driving performance and alignment within organizations. He talks about why he felt the need to write a book on strategic agility with Objectives and Key Results (OKRs) and how strategic agility is a continuous process of sensing the environment, making choices, and discovering new sources of customer value.
What you will learn
- The importance of making choices and using OKRs for commitment, which involves mutual negotiation and accountability.
- What businesses can learn from the start-up community and adapt to changing conditions.
- The challenges of matrix organizations, and how shared OKRs can facilitate horizontal alignment.
- [00:01:31] Daniel Montgomery on His Career Path and the Intersection of Psychology and OKRs. Dan talks about his interest in how people organize themselves, which led him to pursue a master's degree in psychology, coaching, and various roles in HR.
- [00:02:46] Start Less, Finish More and the Importance of Strategic Agility with OKRs. Dan discusses why he felt the need to write a book on strategic agility with Objectives and Key Results (OKRs), despite the abundance of books on strategy in the market.
- [00:03:52] Initiative Overload and How Strategic Agility and OKRs Can Help. Daniel discusses initiative overload and traditional strategic planning cycles that lead to a long list of projects and tasks, rather than focusing on outcomes.
- He explains how strategic agility is a continuous process of sensing the environment, making choices, and discovering new sources of customer value.
- He also highlights how OKRs can help provide a minimum viable strategy, stay focused on the big picture, and adapt to unexpected changes.
- [00:09:09] Moving Away from Traditional Strategic Planning to Embrace Strategic Agility. Daniel explains why traditional strategic planning cycles are no longer effective in today's complex environment.
- He advocates for embracing strategic agility, which involves trying something, seeing what works, and scaling it up.
- He suggests that businesses can learn from the start-up community and adapt to changing conditions.
- [00:12:03] Five steps for strategic agility in organizations. Dan talks about the five steps for strategic agility in organizations.
- The five steps - assess, focus, commit, act, and learn - are applicable to organizations of any size and any time scale.
- He emphasizes the importance of making choices and using OKRs for commitment, which involves mutual negotiation and accountability.
- The last step, learn, involves evaluating performance and learning from it for future improvement. Dan draws inspiration from the OODA Loop concept in the military and applies it to a more social context in businesses.
- [00:28:56] Challenges of overburdened matrix organizations. Dan Montgomery discusses the challenges of matrix organizations.
- He emphasizes their potential to slow down decision-making and hinder agility.
- He suggests that shared OKRs can facilitate horizontal alignment and recommends visualization software for larger organizations.
- [00:32:42] Quick-Fire Questions for Dan:
- What do you appreciate most about your team? Dan appreciates curiosity, rigor, and rapport in his team.
- What is your greatest dream and its associated deadline? Dan’s dream is an environment where people in businesses, non-profit, or government can bring their whole selves to work, with psychological safety, where views are respected and people can be open and curious. He believes this way of thinking is necessary to solve the world's problems.
- What would you say is your proudest moment or experience in one of these engagements? When he hears people having different conversations using new vocabulary that he has taught them, indicating that they are changing and making the concepts their own.