What are OKRs?
Simply put, objectives and key results (OKR) is a framework for goal-setting used to define and track goals more efficiently. Used for mapping high-end company goals, the main benefits of OKRs are:
- Bringing focus by setting up straightforward, strong, and inspirational goals
- Alignment on every work level by embracing transparency and simplicity of the work priorities
- Boosting engagement by sharing strategic company goals and empowering people to determine actionable steps toward vision’s completion
Brief History & Main OKR Attributes
Introduced in the 80s by Andrew Grove, known as the "Father of OKR", the approach of setting up measurable goals had really taken off on the brick of the new century when Google adopted it. Praised for its efficiency in pursuing bold missions by keeping everyone's focus and awareness on the same page - on the most important topics - the OKRs framework is now applied by tech giants such as LinkedIn, Twitter, Microsoft, among many others.
The key to the successful implementation of the OKR framework is having the proper means to measure, track and evaluate the results of the set goals.
Grasping the meaning of OKR implies understanding its main components - "objectives" and "key results."
An Objective is a short and engaging description of your goal. It should motivate your team toward achieving it. Objectives represent an agreement on what the company’s top priority goals are. As per venture capitalist and a leading figure of the OKR movement John Doerr, Objectives should be:
On the other hand, Key Results represent a set of measurements for the outcomes you achieve. Their purpose is to show the progress toward the set Objective, so it's imperative to use quantitative metrics when describing them.
In other words, Key results should be:
✓ Specific and time-bound
✓ Measurable and verifiable
How Agile and OKRs Work Together?
Numbers indicate 60% - 90% failure rates when it comes to strategy execution. The gap between a company vision and its achievement calls for a complementary approach to align teams and individuals towards the same goal.
The Agile processes to project management represent the means and adopted work methods on a team-level. On the other hand, the OKRs represent the value outcomes we aim to achieve and set the path of our business direction. The coexistence of the two philosophies hides the potential to continuously align work with the company’s mission, boost employee engagement, and bring more focus to work.
Alignment with Strategic Goals
Adopting the Agile approach to project management is an excellent foundation to introduce meaningful processes, practices, and principles into our work. Introducing iteration, collaboration, proactiveness, and changes on a departmental and individual level mean we have succeeded in embracing the Agile mindset, and we share its core values. Although Agile successfully aligns our work processes, our goals also need to be shared and embraced by everyone.
We need a way to bring our goals to the attention of individual team members to achieve complete alignment at every organizational level. The OKR framework suggests a simple yet very effective way to do that - transparency across the company. Having shared top goals ensures that people are aware of their work’s business value, collaborate better, feel more responsible and accountable for their work.
Goal Evaluation through OKR Cadences
A great advantage and a vital part of the OKR framework is the regularity of their assessment through frequent cadences. While organizations can tweak these as per their own needs, a common practice is to evaluate high-end goals yearly and team OKRs quarterly. This approach enables organizations and teams to respond more adequately to changes along the way and introduce improvements on the next iteration.
While the Agile mindset calls for the delivery of a working software more frequently, embracing changes and adjusting towards effectiveness, OKRs suggest the same for objectives. By generating more business results in a short period, timely evaluation, and leaving room for improvement in an Agile environment, OKR enables agility in terms of goal setting.
Tracking Outcomes with OKRs
Furthermore, setting up high-end goals or OKRs serves as a compass allowing us to track if we are moving in the right direction. They keep us aware of the state of our progress, as well as measures our business results.
OKRs help Agile teams track progress and make necessary changes along the way and narrow down the focus and team efforts toward a specific objective. Eliminating the potential widening of our goals’ scope is essential in following our set company path.
How to achieve agility with Agile and OKRs?
Just like shifting towards the Agile mindset requires the transition from simply doing Agile to being Agile in terms of thinking and values, adopting the Objectives and Key Results framework calls for an agile approach towards goal setting. There needs to be alignment with a shared goal, transparency, and progress tracking.
One of the most convenient ways to combine Agile and OKRs, is through Kanban. The Kanban method is based on work visualization which helps organizations improve efficiency, understand and manage risks in delivering their services to the customers.
Here is how the Kanban principles and practices can be beneficial.
- Applying one of the core Kanban service delivery principles - “manage the work, let people self-organize around it” empowers people’s engagement and creative input on workflows and their continuous improvement. With high-level OKRs in place and allowing people to self-organize their work, we become more responsive to changes without needing to micro-manage individual team tasks.
- Shared goals and transparency throughout the company are at the heart of Kanban practices. Through visualization of the workflow, introducing feedback loops and multiple boards to connect strategy and work on a team level, Kanban introduces company-wide transparency.
- The Kanban cadences Operations Review and Strategy Review enable a continuous alignment between performance and objectives. With the Operations cadence, teams aim to track their efforts and projects toward the laid out key results, whereas the Strategy Review meetings evaluate and adjust the company’s strategic goals. Applying OKRs makes it easy to track if we are doing what’s needed, understand if efforts align with the strategic goals, and identify room for improvement.
Benefits of OKRs
Why do OKRs thrive in an Agile environment? Introducing objectives and key results (OKR) impacts both business performance and spreads a new organizational culture.
Business alignment at all levels
Setting high-end goals send a clear message to every team member about the company’s aspirations and direction. That creates transparency and serves as a foundation for a constructive discussion about the business outcomes. The awareness of all teams about the company OKRs enables proactive thinking and engagement when it comes to execution and results.
Except for alignment with the organization’s strategic plans, OKRs on the individual team level allow for focusing on short-term actionable goals. This feasible planning with a goal cycle of 1-2 months enables evaluating the performance, identifying milestones, and improving the next iteration cycle.
By encouraging autonomy and transparency throughout the company, OKRs create an environment of engagement and responsibility. Employee involvement not only impacts performance but also sets a tone for a long-lasting mindset transition.
How to Create OKRs?
The key to proper OKR setup is a deep understanding of what their purpose is. While a good set of OKR is strictly dependent on the business domain, among other industry-specific factors, writing effective OKRs can be done by answering a few simple questions.
→ Objectives’ purpose is to communicate a company’s priorities. They should represent a company’s vision. So your Objective should answer the question “What.” Additionally, make sure your objectives are meaningful, clear, and inspirational.
→ Key Results represent the means to evaluate and track the execution of your Objective. As such, your key results should answer the “How” questions. They need to be specific, realistic and you should be able to measure them.
Understanding what OKR is and the framework’s smart implementation into an Agile environment is the shortcut to mapping, tracking, and measuring our business outcomes.
Applying the Agile mindset with the OKR framework enables achieving business agility through:
- Employee engagement by letting people self-organize
- Enhanced transparency by using visualization techniques
- Goal alignment by regular evaluation of the results