As we continue to extend our written discussion of OKRs for Unknown Management from a prior post, we can begin to show how we capture various forms of information that may be known or unknown. In this post, we differentiate between Activity and Value.
Let’s consider Activity and Work as one form of information that could be known or unknown; i.e., what you and your people are doing in your organization. Historically this has been a useful form of information to capture because Activity and Value were directly connected; Activity was what we did and Value was the effect we were seeking (we say the relationship between Activity and Value was deterministic in cause-and-effect). As we focused on Activity, hoping for the corresponding Value to emerge, we broke Activity down into smaller and smaller pieces by creating what the project management community calls a Work-Breakdown-Structure. The perceived business impact of creating a Work-Breakdown-Structure (WBS) was that it could localize activity and dependencies, and it could make tracking and execution more effective. The fundamental assumption still being that Value (aka effect) was directly connected to the Activities (aka Work). In navigating the Known and Unknowns in an organization, the assumption was that Value could become Known when the Activity was made Known. This assumption was typically valid in the past.
However, in today’s hyper-connected and accelerating-pace-of-change business climate, the connection between Activity and Value becomes less clear. This is true for many reasons. One reason is that the Value assumed to result from any one Activity, may be impacted by some other Activity that is connected through the hyper-connected business climate. That means that each Activity may or may not actually create the Value. In the hyper-connected business climate, Activity and Value are indirectly connected (we say the relationship between Activity and Value is probabilistic, or non-deterministic).
The key takeaway is that in today’s hyper-connected and accelerating-pace-of-change business climate, we need to focus on Value directly rather than Value in-directly through Activity. The way we focus on Value directly is by breaking Value down into smaller and smaller pieces, rather than breaking Activity down into smaller and smaller pieces. The result is we create a Value-Breakdown-Structure, rather than an Activity or Work-Breakdown-Structure.
This is not just renaming our Activities and saying they have Value. You can’t navigate the known and unknown by just relabeling what you are already doing. Activity is activity and Value is value; we just need to capture them appropriately. This is where OKRs, when used as an operating model, become powerful. We use the OKRs to capture the Value directly in how we write each OKR.
We’ll discuss how we apply OKRs as an operating model and use them to help us capture the Value directly in how we write each OKR, in a future post.