For fans of agile methodologies and Objectives and Key Results, there are good news: OKR and Agile can work very well together. In this article I would like to demonstrate it, highlighting what are the advantages and methods of integration.
OKR and Agile: together for change
Ameliorative change (i.e. innovation), OKR side and ‘economic change’ Agile side. The first link I want to start from is this.
As you know, agile methodologies offer the advantage of reducing costs in the event of a program change. This is possible because Agile planning is timed based on regular reviews, such as Scrum Sprints, which allow you to:
- Check the progress of the planned process
- Assess the risks and the context (e.g. market conditions, regulatory requirements, and competition)
- Make changes based on the data collected
Any timely modification allows the organization to adjust the process frames with a view to saving resources before the costs of the changes become too onerous.
The OKRs are able to give another kick. The weekly check-in and the division into Quarter for the implementation of key results, linked to the objectives, allows you to understand what needs to be adjusted with a view to improving change. The OKRs, in fact, aim to add value to the process.
Check out these examples and case studies of implementing OKRs for business growth.
How to use OKR and Agile?
If you use agile development in your organization, OKRs can come in handy as a tool for aligning goals with business strategy.
Each objective should support the corporate mission and be multiplied in an aligned manner on short, medium, and long-term objectives. It is at this point in the development of the business management methodology that you can try to start with OKRs: to link the business vision to quarterly or annual OKRs.
The approach based on objectives and key results allows you to indicate an important and ambitious direction and, at the same time, to find the measures to ‘count what matters’. This is how OKRs were theorized by their father, Andy Grove at Intel way back in 1975:
- O = direction or ambition
- KRs = steps to be reached in order to progress
They do so by detaching themselves from other MBO (Management By Objective) methodologies because we are in the presence of a growth framework, not an evaluation tool with a view to rewards or punishments. The ultimate goal for corporate OKRs and OKR teams is to achieve an improvement, which is strategic for the purposes of innovation and business development.
Within an agile organization, OKRs are used to create a common mindset. Every modification and every course adjustment always has a clear and communicated direction as a reference. Each important milestone reached has as its purpose to progress towards the goal and, consequently, improvement.
Progressive alignment towards the greater goal is the secret to successfully using OKRs: they are the compass that guides you towards significant results and not towards the definition of performance bonuses.
It is in this way that the OKR culture creates an environment prepared for collaboration and innovation: individuals empowered by commitment (the commitment made to the organization) are motivated and prepared to raise the bar for increasingly challenging goals.
What are OKR objectives?
I will not dwell on what the Objectives and Key Results method is in detail (I have talked about it extensively here). I will only make a few points because this will make it easier for you to use OKR and Agile together in your organization.
- The goal is the beginning and the end
O (Objective) indicates what you want to achieve at the end of the path. For this reason, you will have to think backward: start by thinking about arrival, not how you get there. That will come later.
- The goal is relevant
Finding a strategic and impacting goal is one of the most difficult steps of the OKR methodology. Without a thorough knowledge of the reference context, there is a risk of setting objectives that are not specific enough. To begin, data and information on the type of users, competitors, the regulatory landscape, and market trends are essential.
- The objective is clear
Clear communication of objectives ensures transparency and promotes alignment. If everyone knows where they are going and why they will also know what to do to make their contribution.
Remember to profile objectives in realistic terms over the reference period (Quarter). This will allow you to progressively raise the difficulty level. If teams have realistic OKRs in the quarter, they will focus on that portion of progress. And that will be helpful in achieving the challenging long-term goals.
Short-term goals provide a way to schedule revisions that are useful for realignment.
What are the Key Results OKR?
The key results measure the improvement towards the goal. They are not actions to do, they are not tasks or to-do lists. They are what you decide to measure as important. I want to give you an example.
A software company runs a job search platform. Many errors have been detected in the functioning of the system which is an obstacle to growth. The goal is therefore clear and shared:
O = Reduce the number of errors in the system
The development team proposes some key results. Such as:
KR 1 = Reduce the number of transactions that cannot be automatically fulfilled by 20% in the next Quarter
KR 2 = Lower errors reported by users by 30%
KR 3 = Please release the new 7.0 patch by the end of the fourth Quarter
Analyzing this OKR more in-depth, I notice an error in the methodological approach. The third key result is indeed measurable, but not so relevant in terms of progress towards the goal. We cannot know if the release will impact the reduction of errors. We will only know if it will be released in time. In practice, it looks more like an output than an outcome. Conversely, the other two are pertinent to O: two stages that bring us closer to the goal. If I were part of this development team, I would propose to take the KR 3 and transform it, for example, into a goal related to customer satisfaction.
OKR and Agile: why does their integration work?
OKR and Agile work synergistically in the definition of objectives, in the alignment of results, and in the evolution of the growth-oriented mindset.
I enter into the merits and take you within a Scrum team. Let’s say that I was assigned the role of Line Manager, who manages the development path of the team.
We decide to set only one goal and 3 related key results, to keep our focus high. We set up an OKR Canvas Model, in which O is defined, the relative KRs, plus any initiatives in charge of the individual Owners (promoters of the initiative).
At the end of the quarter, we find ourselves for the OKR grade, an evaluation scale that will show in the next image. We verify that some results were achieved at 80%, others at 60%, and still others at 20%.
The team leaders, by virtue of their know-how, exhibit the analysis of the technical data obtained from tracking, that is, from the tracking of OKRs. As a Line Manager, I make sure that the teams are aligned and ready for self-assessment. The questions that are answered are: “What have we learned?”, and “To what extent have we created value?”. Missed results are questioned and can be modified, or re-proposed in the next Quarter if deemed still valid for progress.
OKR and Agile: an extraordinary example
Let’s allow ourselves a little lightness. I wondered if there were any examples of OKR in cinema. In reality, there are several, but one more than the others has the right elements for a fitting analogy.
Here is a very brief synopsis.
A team has a super ambitious goal. Each team member must achieve a result, in mutual alignment to progress towards the goal. The film in question is ‘Ocean’s Eleven’.
O = Robbing the most impenetrable Las Vegas casino vaults ever robbed by anyone before
Having recruited the best team to achieve the goal, the Line Manager, Danny Ocean, organizes an initial brainstorming to share the OKRs: obstacles are identified and team members are allowed to ask questions.
Then, once consensus is reached, each team member becomes the Owner of a key result and related activities. Each KR included in the plan is timed and closely linked to that of the others.
I do not list all the individual KRs in the film, which I recommend you look at from this unusual point of view, but I invite you to a final reflection. During the preparation of the plan – close to the day set for the strike – Ocean’s gang is forced to change the plan of action by an unexpected event. In full agile mode, it keeps O fixed, so as not to waste the resources used and adjusts the KR.
Conclusion on OKR and Agile
Before concluding, I would like to make a clarification. Why did I mention OKRs as a goal-setting method in Agile and not another framework? As you know, there are several and all, properly evaluated and implemented, can work.
OKRs are experiencing a period of great popularity and this cannot be accidental. The changes at the macro and micro levels, experienced in recent years, have meant that the OKR mindset emerged with all its revolutionary strength. More and more people want to have purpose and feel part of a community. Regardless of the working methods, in the presence or in Smart Working, and the role. The purpose must convince and motivate them. In organized companies, as well as in startups, the simple execution of tasks, disconnected from a broader vision, is sterile.
The OKR method helps organizations to make the direction clear: the goal is common and strategic, but also inclusive and engaging. Everyone is able to measure how their contribution supports progress towards the goal. This pushes people to leverage their skills, but also to stretch outside their comfort zone. Without the danger of penalties!
The change in mentality from the MBO standard is significant. We go from: “You have to do this to get that reward” (see bonuses in traditional goal evaluation methods), to: “We want to move that bar forward and this is why it is right to do so“.
Who am I and why am I talking about OKR and Agile?
I am Luciano Castro, founder, and CEO of Castro & Partners, Anomadic Business and Anomadic. I eat ‘bread and business strategy’ because I am an entrepreneur and a Product Manager (president of the Product Manager Alliance). As a consultant, I help managers and entrepreneurs to maximize their operational efficiency. Also thanks to the skills of the professionals of my team, I am able to follow projects in different areas of expertise:
- Remote Team Building & Leadership
- Lean & Agile Project Management
- Digital Products & Marketing Strategies.
If you are looking for a way to create extraordinary digital products, improve your organizational strategy and grow revenues, get in touch with me!