In an environment as volatile as the business world, companies that clearly see their goals, objectives and ways to achieve this have a great competitive advantage. Strategic Planning is a great tool for any company that wants to prepare and advance in multiple situations, becoming proactive when facing its challenges. In this post we will tell you a little more about the history of this tool and some more benefits of its implementation.

When it started

If today, even with so much access to information, witnessing considerable changes in a short period of time, many companies still follow with plastered management models, with fixed and very inflexible structures, how did they organize themselves eighty years ago?

Some studies report that the first signs of strategic planning appeared in the 1950s, with a single focus on the financial pillar of the corporation. However, even if the market was not as volatile as it is today, at that time, in response to the market, companies also saw the need to evolve. In the sixties and seventies, long-term thinking began to consolidate, discussing and analyzing pillars beyond the financial one. Even from the seventies, the word strategy was incorporated into the concept of planning.

Over the years, following the advances in technology, the concept of strategically planning has evolved, consolidating itself from the nineties as a strategic and competitive management.

Nowadays

Packed by the information age, some of the competitive strategic management models have expanded their fields and forms of application due several inovations and kept up with market changes. In this way, however much they may have been structured in another time, their capacity for adaptation has meant that these methodologies are still used worldwide. Within this context, we can highlight two models: OKR and BSC.

BSC (Balanced Scorecard)

Created in 1992 by two professors from Harvard Business School, the Balanced Performance Indicators (properly translated), are a set of objectives that allow all employees a clear and comprehensive view of the company’s strategy.

Initially, the two teachers published a survey exposing the disadvantages of using only financial indicators to measure the success of a business. Fortunately, they were pleasantly surprised, and the results of their research culminated in a new tool that became known worldwide. In this way, we can define the BSC as a model of management and organizational performance. The application of this tool focuses on determining in a balanced way, the cause and effect links present in the companies’ evaluation indicators, which in the BSC’s perspective are:

  • Financial perspective
  • Market Outlook
  • Perspective of Internal Processes
  • Learning Perspective

OKR (Objectives and Key Results)

Even older than BSC, and paradoxically, one of the most current for the current job market scenario, the OKR methodology (Objectives and Key Results) appeared to the world in 1983, at Intel.
We can summarize OKRs in a sentence by John Doerr, author of the best-selling book on OKRs, “Assess What Matters: How Google, Bono Vox and the Gates Foundation rocked the world with OKRs”:

I will _____, which can be measured by _____.

This sentence demonstrates the structure of an OKR, composed of an Objective (I will), accompanied by Key Results (… which can be measured by).

By creating clear and aspirational goals and defining how we are going to measure data to find out if we reached that goal, an alignment in the company between strategy and execution is created. Each employee knows the objectives that the company has and how they can be achieved. Due this, they will have a direction to follow and carry out tasks that will bring the company closer to the target objective.

Practical application and its benefits

Are you interested in learning about a practical example? Here at Roads, OKRs are essential for maintaining our success and leveraging our growth. The first major reason is the clarity that OKRs generate for all employees. Everyone on the team has access and should be aware of what the team and company objectives are.

Another advantage of using OKR is the understanding of how each sector is contributing. When you know what another team is doing, you can contribute with more assertive ideas and suggestions. Decreasing the guesswork and opinions that often do not contribute to the company’s growth.

What is the secret?

Employees’ sense of belonging! Believe me, this is one of the main reasons for the success of this method: when employees know that their day-to-day actions, that their opinions and experience are impacting the company’s results. They are more engaged and feel part of the construction, feeling like business owners!

Another important point is the simplification of the business strategy. There is no need for a gigantic action plan where only those who were present in the construction know how to interpret. OKRs are simple, clear and straightforward. Everyone who looks knows the path that the company wants to trace and, mainly, where it wants to go.

Believe me, these are just a few benefits that using the methodology has brought us! Would you like to learn more about OKR? We prepared incredible material telling you everything you need to know about this methodology!

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