Using a combination of techniques works like a charm and using okr enables the combination of the bottom-up and the top-down approach.
The two approaches can be characterized as follows:
In the top-down approach, the management or administration comes up with a mission statement or goals and try to convince the employee from top to bottom (as the name suggests).
Here, in a top-down approach, OKR would mean that all objectives are set by a manager, a supervisor or an administrator.
In a bottom-up approach, Employees or teams simply develop a mission statement or goals and try to convince other employees and management from the bottom up. The management includes administration that is responsible for the decisions taken within the company.
In the case of OKR (Objectives and Key results); it would mean that employees set their objectives and key results based on what they think should get accomplished.
OKR stands for Objectives and Key Results which is a methodology to set effective goals in the entire organization and to learn simple strategies to further develop the entire company. Using a combination of techniques works like a charm and using okr enables the combination of the bottom-up and the top-down approach:
Why Focusing on just one approach is not convenient?
The top-down cascading model takes too much time and doesn't add much value. It usually results in taking time to achieve alignment or progression.
About the bottom-up approach; the long-term orientation of the organization's vision and strategy can go down which results in losing the teams' commitment. Employees start to feel that they are responsible for their team goals and are "committed" only if they can set them themselves. This thought in hand has just instantaneous benefits only i.e., the teams stop working with that pace as they reach their goals:
The company Environment matters!
Your company needs to develop an environment that focuses on agility, that is the team should be able to react quickly to changes in the environment and process new information on-spot. Quick turns and flexibility in decisions is what your company requires!
OKRs prove to be helpful here, because the strategy is reconsidered at very short and iterative intervals and passed on to everyone. It is just like taking shorter steps, reaching a goal and then defining the path across. In addition, the teams receive and discover the opportunities that may be closer to the market and customers than the top manager. This way, there are brighter chances of contributing their input bottom-up approach.
OKRs are so powerful that they develop the working environment within the team by allowing teams to come up with self-determined and self-organized goals for the coming months. They have the company's goals in mind and identify ways in which they can contribute to the company goals (they have specified) as a team. So the approach is for goal setting that connects the employees with the company's objectives and increases engagement. This principle is also called PULL principle, where teams themselves "pull" their goals and tasks.
Usually, you are looking to achieve an effective ratio of both; top-down and bottom-up goals. Hence:
- At least 50% of your goals should be directly derived from higher organizational Key Results that you support.
- The other way around: There is a rule of thumb is that around 50% of the OKRs should be defined by the team and the employees working in, a bottom-up approach, meaning that the managers also have a say on what their OKRs are.
Out of these approaches; bottom-up and top-downthere's no ideal choice available. If you go for a bottom-up approach and the strategic OKRs that are managed by the managers or supervisors, the team will consider walking their paths and goal accomplishment would get easy.
However, in a top-down approach, employees will not work at the same great pace as they are not considering the journeys to be their own and might end up with low productivity and goal-achievement ratio. As a result, the bottom-up approach when combined with the top down-approach for goal setting connects people with the company in a strategic pattern.
Reasons to focus on OKR with the bottom-up and top-down approach:
There are three main reasons to focus on OKR with bottom-up- and on the top-down approach:
- You are more committed:
You (as a team member or a supervisor) get committed to the work you do. Every other person in the team starts making waves like he/she is the sailor and the company simply makes it to the top.
- You move more and faster:
With commitment, the work and productivity force is established. The employees, the managers and subsequently, the company starts moving faster towards their end-goals (mission statement).
- You use the power of organization:
Whatever business you're in, you can't negate the power of organization. Organization is needed every moment as it is the only way to make things happen. With OKRs that are focused on a bottom-up and top-down approach, you put efforts like an organization. From managers to the employees, everybody in the company works to build an organization - the one that outranks its competitors in no time.
- You are aligned:
Last but not least, you and your team get aligned.
This is something special about an OKR that it is a mixture of top-down and bottom-up, in which both approaches merge into a homogeneous tone. The pace at which objectives are performed is simply outstanding.
This has made OKR as one of the most important leadership tools in times of digital transformation and it has become an essential path to design effective overall goal ecosystems!