Tight versus Loose Alignment

There's widespread agreement that alignment is one of the strongest features of the OKR framework. When OKRs are properly aligned, individuals can clearly see how the work they do as part of a team delivers impact to the overall purpose, and makes working with cross-functional teams and remote coworkers easier. Everyone is moving in the same direction.

However, a question that's often asked is, “Should I have tight or loose alignment across my OKRs?”

In other words, should cascading goals follow a strict adherence from one level to the next, or is it ok if goals are loosely supported?

First, let’s define each option.

Tight Alignment

In the popular OKR book Measure What Matters, John Doerr focuses on tight alignment, where a company-wide key result becomes the objective for the next level down. This has also been called the “Duality” model.

With tight alignment, cascading happens strictly and directly.

For example, an objective at the company level might be Earn customer love and trust, with a key result around retention.

Note

• Company Objective: Earn customer love and trust.
  • Company Key Result: Increase retention rate to 99% in Q4.

Using tight alignment, Jane, the VP of Customer Success, directly inherits the company key result of retention, and it becomes her top level objective. From there, she'll set three key results in order to reach that objective.

Note

• Jane (VP, Customer Success) Objective: Increase retention rate to 99% in Q4.
  • Jane (VP, Customer Success) Key Result: Implement customer improvement plan for 100% of at-risk customers by December.
  • Jane (VP, Customer Success) Key Result: Increase NPS score from 7 to 8.5 in Q4.
  • Jane (VP, Customer Success) Key Result: Increase customer engagement from 1x a month to 2x a month by December.

Because this objective requires the support of other team members, the key results continue to cascade down in the same fashion to other team members.

For example, the key result of “Implement customer improvement plan for 100% of at-risk customers” will now become one of the objectives for Nick, the Director of Enterprise Success. Nick will then identify three to five key results that help him measure whether he reached his goal.

Note

• Nick (Director of Enterprise Success) Objective: Implement customer improvement plan for 100% of at-risk customers.
  • Nick (Director of Enterprise Success) Key Result: Reduce customer response time from 72 hours to <24 hours.
  • Nick (Director of Enterprise Success) Key Result: Increase total amount of completed quarterly business reviews (QBRs) from 88% to 100%.
  • Nick (Director of Enterprise Success) Key Result: Develop an action plan with three improvements and implement this quarter.

Loose Alignment

The other OKR alignment approach is to cascade goals in a similar manner, but without repeating the OKRs verbatim, giving sub teams more freedom in defining how they'll support company objectives.

For example, let’s start with the same objective at the company level--Earn customer love and trust, with a key result around retention.

Note

• Company Objective: Earn customer love and trust.
  • Company Key Result: Increase retention rate to 99% in Q4.

From here, Jane has the freedom to write her own OKRs, which loosely support the overall goal of increasing retention, such as Improve Customer Satisfaction.

Note

• Jane (VP, Customer Success) Objective: Improve customer satisfaction.
  • Jane (VP, Customer Success) Result: Reduce customer response time to <24 hours.
  • Jane (VP, Customer Success) Result: Resolve 90% of open cases.
    • Jane (VP, Customer Success) Initiative: Develop customer advisory board.
    • Jane (VP, Customer Success) Initiative: Identify top three drivers causing friction and implement corrective action.

In the same way that Jane has created her OKRs in support of the larger mission, Nick can collaborate and align with Jane to write his own OKRs in support of her objectives.

Viva Goals Recommendation

It is our recommendation that companies use the Loose Alignment model.

In his book OKRs for All, Viva Goals CVP Vetri Vellore states, “Tight alignment has received its fair share of praise and criticism, and it has served many successful companies well. However, for the modern, distributed, and often more matrixed organization, this is much more rigid than is appropriate.”

Here are some reasons why:

• Using tight alignment, the key result of one level becomes the objective of the next level. The challenge with this approach is that the very definition of OKRs quickly gets muddled. In other words, key results are focused, measurable, metrics based on outcomes. When that KR becomes the Objective below it, it still contains those measurable metrics, instead of being aspirational goals.

• With tight alignment, the first draft of the company’s key result, which becomes the objective for the department/team below it, was written by the CEO. Then it's edited by the department’s objective owner. With loose alignment, the department objective is drafted by the department that will own it, and agreed upon by the CEO. It’s a subtle shift, but loose alignment helps drive more bottom up alignment and sense of ownership.

• The strictness of tight alignment can often be too cumbersome to adhere to throughout an entire organization, whereas loose alignment allows for more flexibility. With a loose alignment structure, departments and teams have the flexibility to directly cascade a company key result into a new objective, but they can also choose to create a new second-level objective that aligns directly to the company’s top line objective.

The most important note here's that this is a collaborative process in which neither company-wide nor team-level OKRs should be written on islands. There should always be a collaborative dialogue between leaders, departments, and teams.