OKRs Are Not Strategy: Understanding the Difference

Many executives emphasize Objectives and Key Results (OKRs) as though they alone define strategy. This mindset often leads to a critical misstep: confusing operational objectives with the larger strategic vision. While OKRs are potent tools for tracking progress and setting measurable goals, they are not a substitute for strategy. OKRs are not strategy; they are a tool to support it.

Why the Confusion?

The confusion often arises because OKRs are not strategy; they are designed to be practical and results-oriented, making them feel like they encompass all a business needs to succeed. The problem is that OKRs tell you what you need to achieve, not how to achieve it.

Executives sometimes think assigning objectives and letting teams figure out the details creates a strategic approach. However, this way of working often bypasses a crucial element—the strategic decision-making underpinning those objectives.

Imagine a nonprofit organization with the objective to increase donations by 20% compared to last year. This is a clear, measurable objective that could be part of an OKR. But what about the strategy? Should the nonprofit focus on cultivating relationships with major donors, or should it diversify its efforts by increasing the number of small donors?

Each path involves a different set of tactics, risks, and opportunities. Without defining the strategy upfront, simply setting OKRs leaves too much room for scattered efforts that might not align with the organization's broader mission. OKRs are not strategy because they do not define the strategic choices required to achieve the objective.

OKRs and Strategy: A Complementary Relationship

OKRs are not strategy, but they are excellent for execution—they turn strategy into specific, actionable goals teams can work toward. However, their power only comes into play when a solid strategy is already in place. Think of OKRs as the bridge that translates high-level strategic thinking into day-to-day operations. They are a way to articulate and measure the effectiveness of your strategy.

Consider a company launching a new product line. The strategic question is, which market segment should we target? Once the segment is decided, the OKRs can be set—perhaps, "Reach 10% market share in six months" or "Onboard 5,000 new customers in Q1." The strategy dictates the focus, and the OKRs provide the measurable pathway to achieve it. OKRs are not strategy, but rather the means to execute it.

Making the Distinction Clear

To make the distinction between OKRs and strategy clear, it helps to break things down into Goals, Objectives, Strategies, and Tactics (GOST):

• Goals: The broader ambition or end result you want to achieve.
• Objectives: Specific outcomes that support achieving your goals. These are measurable and time-bound, often forming the basis of OKRs.
• Strategy: The plan or roadmap that outlines how you will achieve your objectives and reach your goals. This includes your choices about resources, focus areas, and competitive positioning.
• Tactics: The actions taken to execute the strategy effectively.

Adviso has create a helpful infographic to explain the difference between Goals, Objectives, Strategies, and Tactics.

Final Thoughts

OKRs are not strategy; they are an invaluable tool, but they are only as effective as the strategy that supports them. Before you set OKRs, invest the time to develop a clear strategic foundation—a plan that considers where you want to play and how you want to win. Only then will your OKRs effectively guide your teams toward impactful results.

By understanding that OKRs are not strategy, but a mechanism to execute your strategy, you can ensure your business stays on track to achieve its overarching goals.