OKR vs Agile? Is the OKR methodology compatible with Agile? And if so what are the advantages and possible contraindications? These are urgent questions. Especially for managers and entrepreneurs who have spent years implementing the Agile methodology in their organization and then (almost suddenly) were overwhelmed by the phenomenon of Objective and Key Results.
That’s why I want to focus on how to combine OKR and Agile.
If you too have already become an OKR Jedi and are looking for ways to use this method in Agile teams, this article is for you.
What is the Agile Methodology?
The first publication of the Agile Manifesto dates back to the 90s of the twentieth century. The urgency to which it responded and responds now is to find a new approach to meet the needs and requirements of the software development market. A landscape that has become exponentially fast and competitive.
The Agile Project Management methodology was created for iterative management and divided into phases of the project/product (intended as a software model). The phases, called Sprints, produce workable results. Since the Sprint is short (typically 2 weeks), it allows self-organizing teams to release process segments as they are completed.
This periodic output also makes it possible to verify that the segments released are those expected. If not, teams are committed to quickly correcting errors segment by segment, that is, bit by bit. Such timeliness reduces the chances of failure on a larger scale: the control is not only continuous but also adaptive according to needs and contingencies.
In this perspective, it is entirely legitimate to consider Scrum and Kanban as two subsets of the Agile Methodology.
What are OKRs?
The OKR Methodology is nothing new. Yet only a few years ago has it begun to attract the curious glances of those looking for innovative business management methods.
The beginnings of OKRs (an acronym for Objectives and Key Results) date back to the 1970s and their creator is Andy Grove. We owe him the first phase of testing the OKR method at Intel. But it was thanks to John Doerr that OKR became what we know today. In 2014 Google revealed how this methodology has revolutionized the business management system since 1999, thanks to Doerr.
This is why in recent years there has been a real boom in the OKR Methodology, today is happily used not only by Google but also by Amazon, Microsoft, Spotify, Twitter, LinkedIn, Zalando, and other big companies.
If you’re interested in how LinkedIn, Microsoft, and Google use OKRs, read here.
OKR vs Agile: Strategy vs Execution
Since we are talking about two of the most popular and innovative business management methodologies, the question is: how to implement them in synergy?
Each philosophical theory proceeds from the previous one by contrast (total rupture), or by evolution (continuity). Our task is therefore to understand if and what are the points of contact and divergence between OKR and Agile.
If the ideas are antithetical and the functionalities coincide, or vice versa, is it still possible to find a way to make the two methods compatible? It is an intriguing question, which requires a non-superficial answer.
OKR vs Agile: focus on goals
Let’s break down an organization, for example, a business organization, into the four atomic elements that make it up:
- Business strategy
- Executive action
Each of these levels is pervaded by a higher level: the objectives. For this reason, we find corporate culture objectives (mission), strategic objectives (vision), tactical objectives, and operational objectives (output).
Generally speaking, corporate-company objectives such as mission and vision are set by leaders and managers. Then with the cascading process, they go through the entire hierarchical pyramid. Doing so, however, risks a connective short circuit: over 90% of the members of the company organization are potentially cut off. And even if they are made aware, most of the time they ignore the motivation of the corporate strategy choices. In summary, their executive action remains unrelated.
Connecting culture and strategy to execution levels requires a change of mentality. This new mindset is the basis of the latest generation of company management methodologies. It is at this exact point in the process that OKR and the Agile Team meet.
OKR what are they and why are they strategic?
OKR is a management framework for key objectives and results. Their functionality is focused on the implementation of the business strategy. The teams work together for a common goal, previously set and clearly communicated.
In the outcome process, the alignment of objectives takes place from an individual level to an organizational level. Each member of the organization always knows exactly what he is doing and why. And equally, each team is aware of what the other teams are doing.
OKRs have two basic components that answer two questions:
- Where do we want to go?
- How do we get there?
The answer to the first question determines the Objective: it is the goal-setting to be achieved, which defines aspirations in qualitative terms.
The answer to the second question determines the Key Results: they are the milestones, the useful and necessary steps to get closer to the goal. As results they are measurable and quantifiable.
Why does Agile work for the efficiency of the process?
The Agile Methodology increases the efficiency of teams in the complex and innovative design/production process.
Agile is the answer to ‘cascade’ management methods and although it has been formalized in the field of software development, it is functional in any area.
In essence, the Agile Methodology focuses on the final results and ‘explodes’ the strength of the good OKRs that are focused on corporate objectives.
The OKR method implements the Agile process
The OKR methodology is a powerful tool that organizations, teams, and individuals have at their disposal to align based on ambitious goals.
The Agile Methodology, on the other hand, allows organizations to structure themselves to achieve objectives.
The synergistic application of the OKR framework and Agile ultimately allows you to set goals, decide which features to develop and make sense of the priorities defined.
How is this integration process carried out? When working in an Agile environment, teams run the risk of over-focusing on what they do – that is, focusing solely on task-defined work. OKRs can rebalance this process not only by communicating multi-level goals with absolute transparency but also by telling the stories associated with them.
The Agile team, thanks to the OKR Method, focuses on the reasons for the decisions made and on the measured weight that these choices have in relation to the metrics of the results.
OKR methodology: compatibility of the paradigm
The OKR Method and the Agile Methodology can combine in a symbiotic relationship and support each other. Indeed, it can be said that OKRs are so compatible and tolerant, that they have the potential to become the main management paradigm. Thereby invalidating the synergy with other business management methodologies.
Let’s take an Agile team: at the beginning of the quarter, the team finds an agreement on the result to be achieved. This result corresponds to the KR (Key Results). In this way, the key results become somewhat similar to the Acceptance Criteria rather than to the milestones of progression towards the goal. An important step is an agreement on OKRs: in an Agile environment, teams are self-organized and empowered. It follows that it is the team that sets up and writes the OKRs, possibly under the supervision guidance of the Product Owner.
Equally, a point of contact between OKR and Agile is in the concentration of focus. If on the one hand, the Agile process limits the WIP (Work In Progress), on the other, the OKR Methodology requires a contingent number of Objective and Key Results: a single objective and from 1 to a maximum of 5 KR associated with it.
OKR methodology and Agile Leadership
One aspect that differentiates OKR and Agile is the concept of leadership.
The leader in Agile Methodology is responsible for removing obstacles along the way so that teams can unleash their entire workforce on the product. The effectiveness and productivity of the Agile team bring benefits to all levels of the organization: the removal of obstacles allows you to move more easily in response to changing external factors.
The leader in OKR Methodology defines the destination and is responsible for setting the strategy to get there. In the OKRs implementation process, teams don’t just ‘follow orders’, they know how to choose the right thing to do. The team aligns its objectives, depending on the areas of specialization and competence, with those of the other teams. In this way, everyone makes their own contribution to business improvement and progress towards the strategic goal.
Sprint Agile and Super Sprint OKR
The Agile Sprints have an average duration of 2 weeks, while for the OKRs we speak of Quarter, or quarters (= 13 weeks).
A Super Sprint which in any case is fractional and which leads to a moment of revision. Just like it happens in the Agile Sprint.
During the quarter, the OKR work teams monitor the processes in place every week, maximum every 2 weeks in order to:
- Understanding where the team is
- Measure the results obtained
- Focus on the priorities that emerged and the benefits obtained
- Identify areas for improvement
- Align team members internally (member by member) and in relation to Work Teams
Agile and OKR together for value creation
I started this article from the assumption that OKRs are a compatible methodology that can be integrated with other MBO (Management By Objectives) systems. The answers given so far comfort me in my initial hypothesis. In particular, the OKRs integrate some gaps found in Agile and its subsets (such as Kanban and Scrum).
The Agile process is all about managing the team’s realistic results. The holistic view of the final goal is not contemplated and the risk is to lose sight of the broader context. The OKR method, on the other hand, starts from the final strategic objective and measures the required outputs accordingly. A point of contact and alignment with the feedback-oriented Agile process.
In the OKR Methodology, success is not 100% of the result and not even 70%, or 65%. The percentage number (or any other unit chosen to measure the milestone) is important, but it is not the ultimate purpose. OKRs are a method to learn also (above all!) From failures to growth and progress at all levels of the organization.
The added value is the real purpose of the OKR Methodology. Through the Agile implementation of transparent and shared objectives, you can focus on creating value and enabling autonomous OKR and Agile teams.
OKR methodology and compatibility with other methodologies: my considerations
The change of mentality is the most pressing and at the same time most revolutionary point of contact between Agile and OKR.
On the one hand, the community of Agile developers argues that the organization is the more effective the more resilient. A company that is able to adapt quickly and effectively to changing contingencies has greater opportunities for growth.
However, the new mindset alone is not enough. We also need practical actions that affect business processes and products. An OKR Agile team knows how to take advantage of process agility thanks to the framework of the objectives. This is how the two methodologies actually complement each other, filling their respective gaps.
The new OKR Agile Methodology allows the organization to have scalable management and a transparent system.
As you can see, the possibilities of having strategic business management are many. Finding the right methodology is what makes the difference in the final result.
In my experience as a consultant and entrepreneur, I was able to follow the growth and development of various types of organizations: start-ups, professionals, and companies. In each project, the focus was on finding the appropriate approach to plan from strategy to action.
The technical skills and mentality of the professionals of the Luciano Castro & Partners Team made up of experts in Scrum, Waterfall, Design Thinking, and Lean (PMP, Agile, ISTQB, ITIL, and Microsoft certified), allow us to evaluate together the best possible path.
FAQ OKR Methodology vs Agile Methodology
Can I use the OKR Method as the only management paradigm?
OKRs are not an absolutist framework, nor do they conflict with traditional management methodology for KPIs (Key Performance Indicators) or Agile. The key is that OKRs become the management paradigm of your Agile organization, in a synergistic, complementary, and aspirational way.
Is the OKR methodology compatible with Agile and other MBO methodologies?
Yes OKR and Agile work together. The OKRs in fact fill gaps in the Agile toolkit, such as the too-limited horizon: they give clarity on the final goal rather than focusing on the slightest changes. This also increases the autonomy and awareness of the Team.
What are the advantages of the OKR Agile Methodology?
The advantages of a combined OKR Agile Methodology are linked to the potential to ‘blow up the reagents’ for overall improvement. The ultimate goal is not so much the achievement of the Team’s objectives as the creation of value in business processes, through an agile and resilient organization.