The ‘Guiding Star OKRs’ Approach to Strategic Agility

Why complex organizations need a new type of goal to foster self-organization and resilience.

Staffan Nöteberg
The Pragmatic Programmers

--

Rigid performance targets often derail adaptability in a turbulent marketplace. The Guiding Star OKR model offers a framework for creating shared strategic direction, ensuring employee actions across the organization are aligned for success.

Our CTO George’s team meeting is a fortnightly gathering of the heads of the Project Management Office (PMO), product, and strategy, as well as our agile coach. The CEO’s eighteen-year-old daughter, Stella, is also present at her father’s request. George suspects his boss has big dreams for his daughter. However, for now, she spends most of her time as a university student.

This time, there was something expectant in George’s eyes. It was as if he was about to unveil his plans for a major transformation, and he was curious about the team’s feedback.

CTO shares his proposal

Good morning, team.

I’m here today to talk to you about a proposal for a new standardized process for our development department. As you know, we recently crossed the 500-employee mark, and with our continued growth, it’s become increasingly important that we have a consistent and efficient way of working.

I’m proposing a process that is designed to do just that. The process will ensure that everyone on the development team works in the same way and that we’re all on the same page. This will reduce the cost of our work, increase clarity, and make it easier to hold people accountable.

The process is based on agile methodology, but it’s been scaled up to create a feature factory. This means that all of our work will be broken down into four levels: themes, initiatives, features, and stories.

We will implement follow-up, what agilists call standups, at all four levels of the organization, with more frequent meetings at the lower levels. This allows us to identify and address any deviations from our already busy schedule early on.

It’s important to note that this process is not intended to replace the work that our teams are already doing. In fact, it is designed to support and enhance that work. By providing a clear framework for how we work, we can free up our teams to focus only on our top-priority features.

I believe that this process will have a number of benefits for our team, including:

  • Reduced costs
  • Increased clarity
  • Improved accountability
  • Increased motivation
  • Scalability

I am confident that this process will help us to continue to grow and succeed as a company. I’d like to hear your thoughts and feedback on this proposal.

Head of PMO shares his concerns

As the head of PMO, I care deeply about the success of our projects and our company’s compliance with regulatory requirements. Our project managers are focused on delivery and compliance. Give us a scope, a deadline, and resources, and we’re prepared to go through fire to deliver on those terms.

Of course, our company will continue to manage projects even if they are not visible in the feature factory picture. We must honor the contracts we have signed with customers who have paid large sums of money for customized solutions. If we fail, we risk our brand and reputation.

If we don’t meet the regulatory requirements of the authorities, we can be fined and, in the worst case, banned from doing business. Nothing is more important than avoiding this.

While the proposal is good, I see some risks.

  • It is difficult for us, as project managers, to prioritize the work of our resources, since the teams plan and track their own backlogs.
  • Projects become more difficult to monitor and evaluate. Teams break down all work into small pieces and mix work from multiple projects into a common queue.
  • By breaking down the work based on organizational departments, it becomes difficult to coordinate across these silo boundaries. This leads not only to ambiguities about integration points but also to unnecessary misunderstandings and conflicts.
  • The absence of overall transparency in the projects makes them less traceable. What decisions have been made and by whom? Without that information, we will not be able to hold anyone accountable when deliveries fail. Even worse, a lack of transparency unfortunately opens up risks for corruption and irregularities.

I want to remind you all that project management is essential for the success of any organization. Project managers play a critical role in ensuring that projects are delivered on time, on budget, and within scope. We also play a vital role in ensuring that organizations comply with regulatory requirements.

Head of the PMO’s key message

  • Progress monitoring is aggravated by fragmented and distributed work breakdowns.
  • Misunderstandings and conflicts follow from a decrease in overall transparency.
  • Project precision matters.
  • Meeting regulatory requirements ensures avoidance of fines and bans.
  • The company’s reputation is at stake when tier-one delivery is late.

Agile coach shares his concerns

As an agile coach, I care deeply about our teams and their intrinsic motivations. These 500 people are highly educated and experienced in their respective fields. We leverage their expertise by organizing them into cross-functional, semi-autonomous teams. This is what it takes for us to be successful as a company.

So, I’m glad your suggestion starts with agile teams. However, I also have some concerns.

  • We know that intrinsic motivation comes from things like autonomy, mastery, purpose, growth, and social interactions. These factors trump carrots and sticks.
  • Our teams need to own their own processes, of course, within certain guardrails. Otherwise, they’ll be prevented from continuously improving the way they work.
  • The technical solutions we deliver are often impossible to describe in detail in advance. Teams must learn by experimenting with different approaches.
  • Prioritization can’t just come from the top in the form of large feature breakdowns. Only the teams can warn us about and address technical debt. They, not the managers, are also experts on the optimal technical solutions.
  • We also need to listen to the teams when it comes to estimating work. No one can better guess how long it will take and how complex the tasks are than the people who will be doing the work.

I’m not saying that a feature factory is a bad idea in principle. However, I’m concerned that it would be a step backward for our teams and our company.

I urge you to reconsider this proposal and work with the teams to find a solution that preserves their autonomy, mastery, purpose, growth, and social interactions.

Agile coach’s key message

  • Agile teams are key to success.
  • Autonomy, mastery, purpose, growth, and social interaction drive teams’ intrinsic motivation.
  • Teams should own their processes to improve continuously.
  • Technical solutions may emerge through experimentation.
  • Teams are experts in estimating their work effort and technical solutions.

Head of product shares her concerns

My product managers always think about the customer first. Our products should be easy to use and solve the problems that customers face. It’s a sign of the times that companies can’t keep delivering specific solutions to the highest bidder. With popular products, we can reach many more people. Together, they may pay more than a single tier-one customer.

  • The static slicing of teams easily results in a bunch of component and platform teams that have difficulty relating to the customer’s reality. I would like the slicing to be based on the business — that is, customer types or product types.
  • Just because we improve our ability to churn out features doesn’t mean we’ll get a consistent customer experience. Customers will get lost, and longer flows in their work will require manual steps.
  • All the roles, levels, and sync meetings described in the feature factory picture might lead to longer lead times. We want a hyper-fast loop based on build-measure-learn. Our product people are awesome at doing market research and learning from our experiments.
  • Feature factories tend to focus on specs and forget about the big picture. They churn out features without considering what customers want or what competitors are doing. This can be a recipe for disaster. Just look at Nokia. They were once the world’s leading mobile phone manufacturer, but they fell behind when they failed to keep up with the latest trends. Now they’re a shadow of their former selves.
  • I can’t see that we’ll be measuring anything other than the amount of output in a feature factory. For us, it’s more important to measure customer satisfaction and business value. We want to see a paradigm shift from tech-focused proof-of-concept to proof-of-value.
  • Tech-driven development is a solution that looks for a problem. It may impress some people that we can intercalate bleeding-edge technology, but it doesn’t help our customers. And it’s actually the customers that we should keep closest to our hearts if we want to be successful.

Several of these problems stem from the fact that a feature factory creates a gap between the development department and the product managers.

Head of product’s key message

  • Products should be easy to use and solve customer problems.
  • Teams should be sliced by customer or product type.
  • Feature factories focus on specs and forget about the big picture.
  • We should shift from tech-focused proof-of-concept to proof-of-value.
  • Market research and fast experimentation feedback are needed.

Head of strategy shares her concerns

As the head of strategy, I care deeply about our company having a long-term and coherent strategy. I also care that everyone knows the strategy and that it has an impact on the work done in the company. Another of my passions is that the company should be a learning organization.

I am concerned that the feature factory would lead to:

  • Incoherent product portfolio. The scattered focus on individual features is organizational multitasking. Successful strategies require us to believe in them persistently.
  • Strategies being sidelined. The strategies we have developed are sidelined by the execution in the feature factory. The dual command, execution versus strategy, confuses the staff. The result is usually that the implementation of the strategies is sacrificed, which puts the whole company in a risky position.
  • Lack of risk analysis and management. As you surely remember from examples from our company’s history, a lack of risk analysis and management has led to catastrophic product launches. Let’s never let that happen again.
  • Lack of learning. Our governing documents state that we should be a learning organization. We will never be able to “sharpen the saw” if everyone works in their own little silo.
  • Lack of broad competence development. Our employees are asking for broader competence. This is also a clear industry trend. What is the use of developing broad competence if the work still revolves around a small, recurring problem area?

I see a general risk with feature factories that they prioritize urgent over important. Yet, we know from our own experience that the more time we spend on firefighting now, the more time we will need to spend on firefighting in the future. Without proactive work, what was important yesterday becomes urgent today.

Head of strategy’s key message

  • The company needs a long-term and coherent strategy.
  • Everyone should know the strategy, and it should impact the work.
  • The feature factory may result in a lack of risk analysis.
  • The company should be a learning organization.
  • Employees are asking for broader competence development.

CTO is disappointed

I’m disappointed. I was hoping for more passion, more willingness to change, and more of a winning instinct. While I can understand some of your concerns, I find it hard to accept the one-sided whining. We are a team working for each other towards a fantastic goal, aren’t we?

With the attitude you’re showing today, I might as well ask Stella for feedback. She’s only seventeen and has no work experience at all. But with those genes, I’m sure she’ll recognize a good idea when she hears it.

Stella, what do you think about the idea of modernizing the development department into a state-of-the-art feature factory?

Stella tells about the duck and the ants

Eighteen. I’m eighteen years old.

(Ten seconds of silence may sometimes be perceived as ten minutes.)

Have you heard of the Digesting Duck? It was a sensation in its day.

The life-size duck was made of copper, gold, and steel. It could flap its wings, quack, and even appear to eat and digest grain. French eighteenth-century inventor, Jacques de Vaucanson, achieved this by using a complex system of gears, levers, and springs. However, the “digestion” was actually fake: the grain was stored in a hidden compartment and released at an appropriate time.

Contrast this system of a mechanical duck and its master with a self-organized ant colony with tens of thousands of individuals.

When an ant finds a food source, it leaves a pheromone trail on its way back to the nest. Other ants then follow this trail to find the food source. In this way, ants can collectively carry home a dead lizard that is many times heavier than any individual ant. The ants achieve great things together, despite lacking centralized leadership.

Does our 500-person company resemble the master and his mechanical duck or the decentralized ant colony?

(It seemed like a rhetorical question that was supposed to be answered with the second alternative. But it was not.)

Actually, both! And it’s not by design. It is dictated by the laws of complexity science. Let me explain.

Stella’s key message

  • Digesting Duck had centralized control and fake sophisticated capabilities.
  • An ant colony is a decentralized system that creates complex outcomes.
  • Each ant operates based on a simple set of rules.
  • Dual nature: A 500-person company may resemble BOTH the duck and the ants.
  • Dual nature emerges from the laws of complexity science.

Stella defines the company as a complex system

When 500 people work together toward constantly changing goals, they interact with each other many, many times, and in many different ways. No one here can predict in the morning all the interactions they will be involved in during the day. Most interactions happen in completely new ways that have never been done before, anywhere. (Numerosity)

Some meetings are planned and go more or less as we planned. However, most interactions are not centrally coordinated or controlled. They arise from unexpected combinations of previous interactions. (Diversity)

The interactions are therefore influenced by the results of previous interactions. Feedback is built into the system, and the system continuously adapts to new conditions. It never ends. (Feedback)

Exactly what we will engage in is partly or wholly not knowable in advance. This imbalance is rooted in the fact that the second law of thermodynamics applies only to a closed system. Our company is an open system. We will never stop being influenced by competitors, customers, laws, economic conditions, and other things that add energy from the outside. (Non-equilibrium)

Regardless of how much we add in terms of hard process rules, our company will still be partly self-organized. The past will be part of the future, and people will always adapt to any new reality. And, actually, we should take advantage of that spontaneous order. How do we do that? By creating fertile soil that focuses these emerging forces in a common direction. An elevated purpose makes our whole more than the sum of our parts.

Stella’s key message

  • Numerosity. Many people interact many times in many different ways.
  • Diversity. Many meetings, decisions, and analyses are not centrally controlled.
  • Feedback. Employees will never stop adapting to new conditions.
  • Non-equilibrium. Our company is constantly influenced by external factors.
  • Self-organization. We are partly self-organized, and we should leverage that.

Stella supports both our CTO and the team’s feedback — Whining is opportunities

I support George’s feature factory model, even though the word “factory” leads us astray. Neither we nor our office are machine-like. A machine cannot change its behavior when the environment changes. Our level of creativity is incredibly important when markets, customers, suppliers, and distributors are constantly changing.

I also support the feedback that all of you gave to George. Even though it is partly biased, it is relevant and based on experience. Instead of dismissing the feedback as whining, we can see it as opportunities.

A complex system is nested. At the micro level, our employees interact and self-organize, although they will never possess all valuable information. The impact is the great achievements that emerge on the macro level.

The feature factory is a framework for executing what we have already decided to do. It may help us deliver quickly, with high quality, and at low cost. Unfortunately, that’s not enough.

We also need to align and re-align our company’s energy with the most important long-term goals, even though our surroundings never stop changing. Since the feature factory model does not address this, it must be complemented by a flexible, sensing, and uniting strategy process.

If you allow me, I would like to propose an addition to the feature factory. My proposal addresses most of the concerns we have heard here today. It would also make the development department more resilient.

Stella’s key message

  • She supports both feature factory and team feedback.
  • However, the word “factory” leads astray. We are not machine-like.
  • A feature factory focuses on execution, however…
  • …the feature factory does not address the most important long-term goals.
  • The proposal must be complemented by a flexible, sensing, and uniting strategy process.

Stella talks about guiding stars and traffic lights

Ants have the natural instinct to survive and reproduce. This instinct drives them to cooperate in large groups to search for food, build nests, and protect themselves from danger.

Similarly, even though our goals may change over time, we also need to agree on our common overall goals.

Why do we need to set goals?

  • It is strategic for our company. We begin with the end in mind, thinking before acting.
  • Combining overall alignment and decentralized self-organization is a challenge when 500 employees deliver value together. We want our people to be a focused force, with maximum value, without micromanagement. And we can achieve this combination with shared goals.
  • We want to influence our operative prioritization. What initiatives and epics contribute to our long-term goals?

Note that this is not about measuring our performance, designing our solutions, managing our scope, or planning our resources. There are other tools that are better suited for doing those things.

So don’t think of a red-amber-green traffic light. They show us whether we are currently ahead of or behind the tactical plan. However, they say nothing about how to act next.

Instead, think of a guiding star that helps us shape our tactical plan. Regardless of where we are right now, the guiding star always illuminates the direction in which we need to move forward.

Guiding stars are essential for any successful company. They provide a sense of purpose and direction while giving our people the freedom to self-organize.

Stella’s key message

  • Ants naturally cooperate based on shared goals for survival.
  • Shared goals are strategic — they begin with the end in mind.
  • Guiding stars are goals that help us prioritize operative work.
  • Guiding stars are not for tracking performance.
  • Guiding stars give purpose and direction while allowing for flexibility and self-organization.

Stella dives into the importance of hierarchy

Dictating goals from the top is a recipe for disaster. However, hierarchy still plays a crucial role in our success.

Think of complex challenges like a chess game. Agility trumps the brute force. Military strategist John Boyd described the information process as a loop: observe, orient, decide, and act (OODA loop). If our loop spins faster than competitors’, it’s like getting two moves in chess for their one.

Here’s the surprising part: when the entire company participates in the OODA loop, we become faster, and our goals become more accurate.

  • Everyone observes. We gather more information and insights from a wider range of perspectives. We might, for example, catch market shifts, solution glitches, and innovative ideas earlier.
  • Everyone orients. This diversity of experience protects us from blind spots and biases that plague top-down companies.
  • Everyone decides. Take away decision-making power, and not only do decisions get worse, but our employee’s intrinsic motivation will plummet. Who wants to wait for orders if they can’t contribute their ideas?
  • Everyone acts. We hired these 500 amazing people for a reason, right?

The challenge is aligning our company in the last two steps: deciding and acting. There are endless good things we may pursue, but scattering our energy won’t get us anywhere. To truly thrive, we must focus in a unified way.

Listen closely now because here’s how we can achieve that.

Stella’s key message

  • Top-down goal setting doesn’t work in complex systems.
  • Hierarchy still matters, since joint outcomes matter.
  • Faster OODA than competitors’ is like getting two moves in chess for their one.
  • Everyone should contribute to the OODA loop for speed and accuracy.
  • Shared goals align decisions and actions across the company.

Stella explains how insights may flow up and down, across the organization

Information and insights must flow freely, up and down, across departments. In this way, we make our decisions collaboratively, with a strong foundation built from all corners of our office.

I’m proposing that we use the popular goal-setting framework called OKR, combined with a process inspired by the Japanese hoshin kanri. However, we will not do it by the book.

One month before our quarterly planning, the hoshin kanri process kicks off. You, George — our CTO — start by presenting your draft OKRs to our portfolio managers. You ask them if they have questions or reflections about these goals and welcome feedback. Then, you ask them to come back with their own OKRs.

There are some properties they have to consider regarding their OKRs:

  • Inspired or local? Some OKRs are inspired by the level above, while others are specific to their portfolios.
  • Shared or owned? The same OKR might appear on multiple peer lists. It makes collaboration easier when everyone’s rowing in the same direction. Other OKRs might be unique to a single portfolio.

Most often, some OKRs are inspired and some are local. Some OKRs are owned and some are shared.

This process then continues both upwards and downwards through the organization — all levels. Don’t forget upwards! The feedback might reveal that something’s missing at a higher level. After a few weeks of discussions, we can finally say we’ve nailed down the strategy for the next three months.

Note that goal horizon and review cadence are two different things. Higher levels in the hierarchy tend to have longer strategic horizons. The whole development department might have goals spanning three to five years, while teams might focus on two-week sprints. But that doesn’t mean that top levels can’t revisit and adjust — even swap out — their OKRs every quarter.

A hierarchy can work hand-in-hand with agility and participation. Managers own and represent the goals on their own level. However, accountability is shared. By letting information flow freely and involving everyone in the entire OODA loop, we will be a powerful, united force that achieves remarkable goals.

Stella’s key message

  • Insights should flow up, down, and across the organization for better decision-making.
  • Using a modified version of OKRs and hoshin kanri for goal-setting.
  • Inspired, local, shared, owned — OKRs have a mix of these properties.
  • Goals are set through discussions at all levels, including feedback going upwards.
  • Hierarchy can coexist with agility when managers own goals and share accountability.

Stella introduces a new kind of OKR: guiding star OKRs

We will not do OKRs by the book. Traditionally, OKRs have been used to put pressure on and blame individual managers. Research shows that this approach is flawed. It only demotivates our people. My strong recommendation is not to connect OKRs to incentives or appraisals.

Guiding star OKRs are different. Rather than measuring our performance, they emphasize a shared vision for the future and then align our work toward that vision.

A guiding star OKR starts with an engaging story about the future, for example, “Easy to buy.” We call the story an “objective,” that is, the “O” in OKR. Our objective is also supported by two to five measurable parameters, which we call “key results.” Together, our objective and our key results describe two things:

  • Our current state.
  • Our desired future state.

There are also several things that do not belong in a guiding star OKR:

  • System solutions for reaching future goals.
  • Activities that take us to our future goals.
  • Features and deliverables that are necessary for future goals.

Thus, we set the goal before we consider the plan; strategy drives execution, not the other way around. If a guiding star can be achieved in only a single way, then it is too specific and too short-term. It doesn’t really serve any purpose. We need to think bigger and further away.

Note that our guiding stars cannot be prioritized against each other. When there is a need to prioritize, then we have too many guiding stars. Typically, a team, a product manager, a portfolio owner, or our CTO has one to three guiding stars each at a time — never more. We say that we select in strategy and prioritize in execution.

Stella’s key message

  • Guiding stars are used for shared vision, not measurement.
  • Guiding stars describe the current and the desired future state.
  • Guiding stars are not system solutions, activities, or features.
  • Guiding stars makes strategy precede execution.
  • Guiding stars should be limited to avoid prioritization conflicts.

Stella dissects the objectives of guiding star OKRs

Don’t think for a second that we will be able to derive everything we do here at the company from our guiding star OKRs. Guiding stars illuminate what is important but not yet urgent — what we need to start today, saving us from putting out fires twelve or eighteen months from now. We will still do incidents, operations, maintenance, and other things that keep our lights on. Don’t worry that those tasks will disappear from the radar. Our OKRs are guiding stars for transformative work and investments in completely new capabilities.

If we start with the objectives, they are qualitative and free from numbers. Here are some characteristics to strive for in our objectives:

  • Share a short campfire story that everyone can understand and like.
  • Represent future outcomes that are valued by customers, users, or other business units, not just by those who contribute to this guiding star.
  • Describe things that we have a lot of influence over, not, for example, financial goals or market positions.
  • Mark substantial differences between the current state and the future target state.
  • Are not multiple goals merged into one.

You may think of the objectives as principles that we return to when we have to choose between multiple options. The question we ask ourselves at those times is: Which option takes us closer to our guiding stars?

Stella’s key message

  • OKRs illuminate important but not yet urgent tasks that focus on new capabilities.
  • Objectives are short campfire stories focused on customer-valued outcomes.
  • Objectives focus on outcomes that we can influence, not just on financial or market goals.
  • Objectives show a clear difference between the current and desired future states.
  • Objectives help guide choices by aligning decisions with the guiding star.

Stella dissects key results of guiding star OKRs

We illustrate each objective with two to five key results.

Unfortunately, it is not difficult to cheat to achieve all key results but still not moving towards our objective. Therefore, consider key results as examples, not proofs. Our overall goal is to achieve our objective, regardless of whether we achieve the key results.

A key result is a variable X with a current state X = A and a target state X = B. For example, “Maximum number of seasons per year in the customer’s clothing store” is four today, and the goal is eight:

  • Current state: X = 4.
  • Target state: X = 8.

Other properties of key results

  • Measure the state, not the effort spent.
  • Never contains verbs such as “launch,” “create,” “develop,” or other action words indicating tasks.
  • Use numbers, not Boolean values “true” and “false.”
  • Trackable continuously, if possible, offering proactive insights.

I can’t emphasize enough that key results are only tangible examples of the future state, not evidence of success.

Stella’s key message

  • Key results illustrate the objective, but achieving them doesn’t guarantee success.
  • Key results focus on the measurable state of the objective, not the effort invested.
  • Key results lack verbs like “launch” — they aren’t about tasks.
  • Key results use numbers to define the current and target state — not just true/false).
  • Key results should be trackable continuously to provide proactive information.

Stella shows how guiding star OKRs are customer-centric

Guiding stars do not focus on our current products and services. Of course, our company works in other contexts with improvements, growth, and operation of our current offering. However, guiding stars describe completely new capabilities — things our customers could not offer their customers before.

We tend to be too nearsighted. Even our customers’ customers have a job-to-be-done (JTBD) — a fundamental task or goal they aim to accomplish in a given situation. Our customers’ customers will achieve better results by operating in new and better ways. Therefore, the objectives in our guiding stars are not tech solutions. However, they may indirectly generate scope in tech solutions. You have heard it before today: strategy drives execution, not the other way around.

The key results in guiding stars are derived from opportunities. They are examples of how the customer’s customers would like their realities to be. Key results are missing pieces that help them achieve their desired outcomes. Whenever our customer’s customer complains, we have an opportunity to translate the whining into key results.

As you know, we develop data warehouses for retail businesses. Imagine that their customers, the consumers, want to buy the lipstick they usually use — they couldn’t care less about features in our software. Their JTBD is something like: “I’m buying my (essential) lipstick.” Let’s listen to what these lipstick consumers complain about:

  • “I can’t find anything on this shelf. It’s overstocked.”
  • “I am unable to find what I want and inspire myself!”
  • “I don’t feel confident that I’ll get competitive prices or that I’ll get rewarded for coming back.”

See, there we have three opportunities that we will translate into measurable key results.

The outcome they seek is in line with “Easy to find, easy to understand, easy to buy.” Let’s use that as the “objective” in our guiding star OKR.

This is what it means to be customer-centric. Rather than unreflectively implementing many cool features in our products, we point out a direction that gives our customers’ customers new behavior.

Stella’s key message

  • Entirely new customer needs, not incremental improvements to existing products.
  • Our customers’ customers don’t care about our features. They want their job-to-be-done to be achieved.
  • Strategy comes first — guiding stars set direction, not solutions.
  • Key results are derived from our customers’ customer pain points.
  • By making things easy for our customers’ customers, we drive new behavior and create value.

Stella explains a process for guiding star OKRs

You are probably familiar with some of the common barriers to success in strategic work:

  • Strategies are intended to be implemented alongside, rather than as an integrated part of, execution.
  • Strategies are created top-down and, therefore, do not reflect all of our knowledge, nor do they speak the language of the teams.
  • It is unclear which goals are relevant at the moment.
  • Strategies are derived from our execution plans rather than driving execution.
  • Strategies have a backward-looking follow-up at the end, rather than continuous review and adaptation.
  • Strategies are only synchronized at formal meetings by selected delegates.

To address all of these obstacles, I envision a process inspired by hoshin kanri but with relevant additions. Hoshin kanri originated in post-war Japan but has since spread to the U.S. and around the world. The words “hoshin” and “kanri” mean “direction” and “administration.” We might say “compass management.”

I previously described how guiding stars are set and owned at each level through conversations organizationally upwards, downwards, and sideways. It is not about who decides but about synthesizing insights from all levels. We call this process catchball. I throw the ball and see if it is caught.

Since our company has a quarterly rhythm for planning our scope to implement, the catchball process starts one month before our quarterly planning. Then, one week before the quarterly planning, the agreed guiding stars are communicated to everyone in what we call strategy broadcast. For everyone to understand, we also arrange lean coffee sessions in connection with this, where we hope that unexpected questions and thoughts will come up. The earlier we learn, the better.

Transparency is necessary for our employees to feel confident in our guiding stars. There should never be any doubt about what the latest version is. Therefore, guiding stars must be available in a central location that is accessible to everyone. Private presentations are not original.

By having catchball first and then strategy broadcast well in advance of quarterly planning, both teams and product managers are influenced by our guiding stars when planning the scope for the coming quarter.

Guiding stars are exactly what the name says: continuous support during execution when we have multiple options to choose from. That’s why we have guiding stars check-ins fortnightly. In the first half of that meeting, we ask ourselves whether our key results are still relevant — are they still tangible examples of our objectives? If the answer is “yes,” then we review their movement since our last check-in. We dedicate the second half of our meeting to lean coffee.

Regular formal meetings are important. The decisions that we come up with in those meetings are our official version. Alongside that story, we want new, exciting thoughts and insights to flow more informally through the organization. That’s why we arrange open space for one hour every Friday morning. Everyone is invited, but presence is not mandatory. This is where unknown unknowns might be uncovered, and new acquaintances are created across silo boundaries.

Stella’s key message

  • The guiding star process is inspired by hoshin kanri to address key strategic obstacles.
  • Guiding stars are defined collaboratively through the catchball process for insights across the organization.
  • Guiding stars are transparently communicated through strategy broadcast and lean coffee sessions.
  • Strategy influences quarterly planning sessions.
  • Guiding stars drive decision-making during the execution phase, with regular check-ins and open space sessions.

Stella rushes off

“This is amazing!” George exclaimed with a broad smile. “Where did you learn all this?”

“I visit companies. Talk to people. Read books,” Stella answered. “That kind of stuff.”

Stella glanced at the clock and gasped. “Oh my gosh! I’m talking too much. I have to hurry to my next lecture.” She grabbed her bag and hurried out the door without saying goodbye.

The heads of PMO, product, strategy, and our agile coach were left sitting in the conference room, as well as our CTO, George.

What do you think crossed their minds at that moment?

--

--

Staffan Nöteberg
The Pragmatic Programmers

🌱 Twenty Years of Agile Coaching and Leadership • Monotasking and Pomodoro books (700.000 copies sold)