Every year, retail leadership teams agree their priorities. The thinking is sound, the numbers stack up and everyone leaves the room feeling aligned. Then each leader takes the strategy back to their own team and reads it through their own lens. The commercial director hears margin. Operations hears efficiency. The people director hears capability. Each builds a plan, and each plan makes sense on its own.
By the time those plans reach regions and stores, they look less like one strategy and more like a dozen competing asks. Nobody did anything wrong, the leadership team simply wasn't as aligned as it felt in the room.
Research from MIT Sloan found that only 51% of top teams agreed on their company's strategic priorities. Among the executives reporting to them, that fell to 22%. The sharpest drop happens right at the top, between the leadership team and the people who run its functions.
That gap is costly in any business and retail, it's amplified, for three reasons:
1. Every function lands in the same place: Commercial, operations, people, supply chain, loss prevention and digital all deliver through the store. If their priorities aren't joined up at the top, the store is where they collide.
2. The chain is long: Strategy passes from the executive team through retail, divisional and regional leaders before it reaches a store. Any misalignment at the top gets handed down and multiplied at every layer.
3. The estate is dispersed: Hundreds of stores, often across regions or countries, run by leaders who rarely see head office. They can only be as aligned as the leaders above them.
The result is inconsistent execution: teams, functions and stores interpreting the same strategy in different ways, and results that vary for reasons head office can see in the numbers but can't explain.
OKRs (Objectives and Key Results) are a simple discipline for turning strategy into a small number of shared goals that a leadership team agrees, owns and tracks together.
An Objective names the challenge to overcome or the opportunity to seize, and why it matters. It's clear about what needs to change without dictating how.
Key Results are three or four measures that tell you whether you're getting there. Each has a baseline, a target and a named owner, and measures an outcome rather than an activity.
The real value for a leadership team is that one objective usually needs several functions to deliver it. Here's what that might look like for a grocer focused on availability:
Objective: Customers find what they came for, first time, in every store.
>KR1: Increase on-shelf availability of our top 500 lines from 92% to 97% (Supply Chain Director)
>KR2: Improve stock accuracy from 95% to 99% (Retail Operations Director)
>KR3: Reduce "couldn't find it" complaints from 40 to 15 per store per month (Retail Director)
>KR4: Lift customer satisfaction on availability from 7.1 to 8.0 (Customer Director)
One objective, four owners. Nobody hits it alone, so the conversation at the leadership table shifts from defending functional plans to solving a shared problem. Each function, region and store then sets its own OKRs showing how it will contribute.
Done well, that gives a leadership team one version of the strategy, written down and agreed; transparency, so every leader can see every other leader's priorities and spot dependencies early; shared accountability, with a named owner for every key result and a collective stake in the objective and a golden thread from the leadership team to every region and store.
Most retailers have tried OKRs, or something similar. Far fewer have made them stick and in my experience, the difference comes down to five things:
1. Fewer priorities. Three to five objectives at company level, not fifteen. If everything is a priority, every leader down the line decides what matters most, and they won't all decide the same way.
2. Outcomes, not tasks. A key result says what will change, not what you'll do. "Roll out the new rota tool" isa task. "Cut unfilled peak hours from 12% to 5%" is a result.
3. A spotlight, not a floodlight. KPIs are your floodlight. They keep the whole business visible and tell you whether it's running as it should. OKRs are a spotlight. They pick out the few things that need to change: doing something new, doing something differently, or delivering a step change on last year. Load business as usual into your OKRs and you've swapped the spotlight for another floodlight. Everything is lit and nothing is in focus.
4. Set together, not in silos. The leadership team agrees the company OKRs in the same room. Each function then builds its own against them, and regions and stores help shape theirs rather than just receiving them.
5. A steady rhythm. Regular check-ins, a quarterly reset and an honest review at the end. Goals set in January and revisited in December aren't doing any work in between.
The method is relatively simple, however the more challenging part is the organisation around it, and most of the problems start at the leadership table.
The first is too many priorities. Each function wants its priority in the plan and sets its OKRs in isolation. Before long, stores are juggling twenty goals that pull against each other, and nobody owns the end-to-end result. The second is how they’re used. When OKRs are tied straight to bonuses, or a missed key result turns into a performance conversation, people play safe. They set targets they know they’ll hit and keep quiet when something isn’t working. If a director can’t say so at the leadership table, or a store manager can’t tell their regional manager, problems stay hidden until year end, when it’s too late to fix them. The third reason is neglect. Goals get agreed, shared in a deck and never mentioned at the leadership table again. If the leadership team doesn’t live by them, nobody else will.
OKRs tell a leadership team what needs to happen, they don't tell anyone how to make it happen. That's where most goal setting stops and where much of the value is lost.
Give two leadership teams the same OKRs and they'll get different results. The difference is behaviour: how leaders make trade-offs, how they talk about priorities with their own teams and whether they hold each other to account. An executive team that says availability matters but spends every review on margin sends a clear signal about what really counts. That signal travels down the line faster than any strategy deck.
So behaviours need the same attention as goals. For every priority, it's worth asking what good leadership looks like at each level. For availability, that might mean directors settling the tension between stock and margin in the room, rather than leaving stores to sort it out. Regional managers coaching the routines that keep shelves full, not just checking the numbers. Store managers briefing the team on what matters today and making the right call when a delivery lands late on a busy Saturday.
Goals give a leadership team clarity on the results it needs, but behaviours give clarity on how to lead to get them. Define one without the other and you leave the outcome to chance. Define both, and the strategy reaches every store intact.
Goal setting isn't new, and most retailers have some version of it. The real question is whether it's aligning your leadership team. Ask each member of your leadership team, separately, three things. What are the three things that matter most this year? How will we know we're getting there? What's your part in it?
Then ask the people who report to them. If the answers match, your strategy is in good shape. If they don't, you've found where the gap between strategy and performance starts.
