The STO model is a commonly used 3-layer organization management system. 

STO model – A quick recap

Organization management is divided into 3 layers

  • Strategic
  • Tactical
  • Operational

Strategic [Direction] 

  • company’s vision [Where] – where the company wants to be
  • Missions [What] – what is the plan to get there

Tactical [How]

  • Strategy [how] – the strategic plan to execute the direction
  • Benefits [reward] – the outcome that we want to achieve, the targets and milestones. 

Operational [Do]

  • Deliverables [output] – the tasks and activities to be performed to achieve the benefits

Traditional STO model 

The traditional STO model is a one-direction dissemination that will take 1-2 months year-end to define. Organizations plan a year-end executive retreat, workshops to create the following years’ plan. 

The smoke finally emerges from the chimney…

The executives come out with a plan, raised high. The plan is preached to all departments in a few company wide townhalls. Employees clap, give a rah-rah. The plan is distributed in a nicely printed laminated sheet of paper. 

Employees put them in their drawers and get on with their usual work…

Until next year…

This STO model has worked for many years until the marketp0lace become more global, more agile and chaotic. Constant changes caused companies to adopt a new management style, but hybrid it with the traditional STO model.

Mapping OKRs to the STO model

Organizations begins to adopt OKRs. OKRs can be created at all strategic, tactical and operational levels, but still with the direction of upper management. Top-down dissemination continues.

It might be in the form of department management teams defining their own department objectives and directing their staff to execute it. Staff might not participate in the OKR creation, but just follow direction. The is disseminated further down to the internal sub-departments or sub-groups.

As you see the diagram below, each layer of OKRs are connected top-down, there are no bottoms up or sideway linking