Objectives & Key Results - Instrument for modern Leadership and agile objective Management.

Everybody is talking about the Leadership Principle Agility these days. However, what is it all about? What do you need to work agile within your team or maybe within the whole division? We talked to Hartmut Mueller – CTO Daimler, VP Technology & Cross Functions. He is responsible for about 6.000 employees. His idea: to transform the entire division regarding OKR (Objectives & Key Results). In the following, he explains what OKR means, how to face a transformation like this and what advantages that involves.

It′s not easy to act agile with about 6.000 employees - why did you plan to do it anyway?

Take a look at the rapid pace of innovation in IT (Information Technology). Almost in every work field and process, IT solutions are essential today. Times where IT was an option are over. No matter, if you think of application development or infrastructure platforms – today it is all about to launch customer orientated, valuable and useful solutions. IT must become a core skill of a company - an overall competence and capability.

The return to the Agile Manifest of 2001 is key: Foster Agility for more co-creation with the customer, more self-organization and more reaction to changes then following a plan. This cultural change drives me.

Why do you think is it important to work agile – what value do you expect?

Talking about it is easy, to really do and implement it is significantly harder. If you have for instance a reduced budget, it is even more important to know the value of every single order. Transparency is key. Just when we know how efficient and effective things are, we can prioritize accordingly.

Agile cooperation models integrate business and IT, reduce administrative roles and processes, deliver results quickly and eventually safe money. You work effectively and in the end together more efficient. Automatically a failure culture occurs where we give up things, learn and start from the beginning.

OKR (Objectives & Key Results) became famous because of Silicon Valley – Google was the first company that implemented it. But what is it all about?

On one hand, OKR is a strategy implementation and operationalization on all kind of levels. Processes become transparent. The goal is, to give any employee the chance to see their contribution and to make the strategy perceptible. OKR aims a “bottom-up” process. Due to transparency, you are able to discuss every topic. You can bring in new ideas and different opinions across hierarchies and silos. According to the principle “four eyes see more than two”, we can minimize double work and organizational conflicting goals. Transparency fosters cooperation and finally increases effectivity. That′s why OKR is not only an agile working method, but also a driver of cultural change. In my opinion, it combines Leadership Principles Agility, Empowerment, Purpose, Co-Creation and Pioneering Spirit.

Why is it worth to work at Daimler on OKR? What′s the benefit?

“We must realize —and act on the realization — that if we try to focus on everything, we focus on nothing.” - John Doerr

With the help of OKR, we can already identify future skills and competences, today: But for the future, we need more than that, that′s for sure. However, the “more” is still largely unknown. Because the scope of the team becomes more flexible on an operational level, OKR helps to identify the unknown. (Honestly, even today, “masterplans from the top” do no longer work. The competences and experiences of the employees are irreplaceable.) Additionally, OKRs help to prioritize and focus. So you can improve issues that are important now (“the right”).

How do you implement OKRs? Where do you start and how?

There is no one-size-fits-all-solution. You have to check the conditions first. In order to meet the big portfolio of our organization we chose a 40/60–solution. 40% top-down and 60% bottom-up. The commitment of the management is a key factor for success. That′s where we started. We used the role model effect and in this way we gave the subordinated the chance to connect. The process is similar to a cultural change – it doesn′t happen overnight. The aim is to grow systematically, organically, and consequently to implement OKRs sustainably. Discussions and joint decisions are essential to get everybody onboard and not to lose someone. Open communication and transparency is already very important when you implement it.

How is the development within your team so far? Where do you stand?

By the end of 2019 we closed the first OKR-set and just before Christmas we invested one day in the leading team to review the last quarter, to evaluate the numbers and the cooperation. The goal was to learn from good and bad experiences and to integrate the learnings into the next sprint. That’s exactly what OKR stands for: Continuous development because of reflecting and learning.

Which success stories can you already celebrate? Did you meet any obstacles? If so, which ones?

We started the transition process in our Management Team and are already seeing the desired impact in the teams. Many teams on all levels accept the invitation to try OKRs. That also shows that the organization is interested and recognizes the benefits.

However, this was a long way to run and lots of declaration was required. You have to understand a strategy before you implement it. You need to convey the understanding in the team with the help of storytelling and by explaining the “why” and “what”. When it comes to implementation, you have to integrate operational topics. Of course, it helps to improve the “proven” – but the decisive balance has to play in first. With this balance, we create free space to be more efficient in the future.

Besides all the positive aspects, there is one thing that probably may challenge you in the first place: For many employees it is unfamiliar to have so much room and freedom given to the top management. This room needs to be filled. In this journey, it is all about individually taking over responsibility. Therefore, it needs a neutral perspective and the willingness to accept and try as well as having the skills to handle management and leadership.

What’s the feedback of your team?

In total, it is very positive. We do it and keep doing it in the future. However, there are issues we have to work on. Thinking in short cycles is very new for us. We have plenty of visions and phantasies what we could do. However, it is challenging to adapt them in a way that they fit to the organization′s 3-month cycles. Furthermore striving for efficiency is strongly anchored. Effectivity is currently a major topic. Efficiency comes afterwards and more or less automatically. It is important to experiment and to allow making mistakes. That’s not a common practice yet. If we set challenging goals, it has to me ok to not reach 100%. And finally we have to “ease“ our communication. When we want to focus, saying ?no“ is legitimate even necessary and required. I think we really have to do that.

 If you had one wish, what would it be?

I wish, privately and professionally, that we live an open failure culture, where you don′t blame people, learn from mistakes and make them transparent. So that others can learn from them, too. For me, that concretely means, we have to practice and fail more to start again and sharpen competencies. It′s not only a personal culture but an inner mindset that everybody has to evolve.

 Can you tell how to integrate the Leadership Principle Agility fast and effective into daily routines? Let′s say a quick-win?

Definitely trying out OKRs and Canban. Every team can test and start immediately. Starting agility is a matter of mindset and culture and depends on competency and comprehension, too. Agile rituals like Daily Stand-up, Retrospective, Program-Increment-Planning and Inspect & Adapt are perfect for starting. Last but not least: Openness and transparency. This creates reality and it′s an easy starting Point.