What are OKRs and How Do they work in Agile Organisations?
Agile principles are a set of values and practices that guide the development and delivery of software in an iterative and incremental way. They were first outlined in the Agile Manifesto, a document created by a group of software developers in 2001 as a response to traditional, rigid software development methodologies.
OKRs (Objectives and Key Results) is a framework that is used in Agile project management to align, measure, and track desired outcomes. It provides autonomy to agile teams by allowing them to set their own objectives and key results. OKRs are measurable goals that can be used to track progress during the project and provide a metric for success.
With OKRs, teams choose objectives that will help them reach their desired outcome for the project, then break those objectives into measurable key results. To illustrate this, let's consider an example from our company, inPositiv . One of our core goals, as part of our North Star (long-term goal 10-15 years), is to be a "people-first business." To support this goal, one of the objectives is people development. The Key Result for this objective could be that the entire team obtains a SAFe-related certificate. In this case, the objective outlines the broader aim of fostering people development, while the Key Result provides a specific, measurable target for the team to achieve, thereby demonstrating progress in realizing the "people-first business" goal.
The objectives define what needs to be achieved while the key results identify how much of it needs to be done. This allows teams to track progress on their projects in an efficient manner. By setting and tracking OKRs, Agile teams can focus on completing specific tasks and achieving their desired outcomes as efficiently as possible.
OKRs have become an essential part of Agile project management because they provide teams with a framework for setting goals and tracking progress towards those goals. They also allow teams to stay focused on the most important tasks while providing a clear measure of success. By using OKRs, Agile teams can ensure that they are making progress toward their desired outcome while staying aligned with the overall mission of the project.
What is OKR in Agile Methodology?
OKRs help measure the progress of specific objectives that align with company goals, creating a sense of business agility that helps teams stay on track and move quickly toward achieving their desired outcomes.
By setting specific objectives and key results, OKRs create an environment where team members can quantify the progress they make toward those objectives, giving them a clear indication of how well they are doing.
OKRs work well in agile methodology because they give both management and team members visibility into whether or not their efforts are producing the desired outcome. With the ability to easily measure progress against set objectives, teams can stay focused on delivering value in a timely manner.
How do OKRs Work in the Agile Environment?
The OKR framework fits seamlessly within a scaled agile framework (SAFe), as it enables each team to understand how their individual efforts contribute to the company's overall success. This is particularly beneficial for larger organisations with multiple teams working on different projects. With OKRs and agile, teams can swiftly adjust their objectives to align with the changing needs of the organisation while still being able to track progress throughout the development process.
In the context of managing OKRs within an agile environment, you can have a sprint to OKRs and it's essential to separate OKR sprints from product development sprints and planning. This allows teams to focus on their respective objectives without hindering the product development process. By incorporating sprints specifically for OKRs, teams can periodically evaluate and adjust their goals, ensuring they remain on track to achieve the desired outcomes.
Moreover, the combination of OKR and Agile methodologies facilitates enhanced collaboration, innovation, and flexibility when tackling challenges. By integrating Agile methods with OKRs, organisations can ensure they are making consistent progress toward their goals in an efficient and effective manner.
Benefits of using the OKR methodology
Now we will tell you 4 keys that will give you the use of this methodology in your company or venture to increase profitability and evolve actions and focus on results.
1-Transparency
One of the values of this method is transparency, an essential characteristic in the company/collaborator relationship and increasingly valued in the market. The focus, in the OKR method, is the success of the whole and, therefore, sharing the objectives in a transparent way with the whole team is essential, showing how each one is contributing to the achievement of the result.
2. It will increase profitability and productivity
You will noticeably see how to increase profitability and productivity . Being focused on particular objectives will generate a much more productive dynamic .
2 – Easy teaching tool
One of the main positive points is that the OKR is didactic and easy to put into practice. You do not need specific training or a technical team to be able to apply it in your organisation. With training it is possible to achieve the effectiveness of the method quickly.
3 – Agility
The OKR is an agile methodology and allows the breakdown of larger objectives into smaller ones to arrive at the result. For example, you can break the goal for a whole year into quarters. In this way, it is possible to evaluate the results obtained so far in each period, helping to increase everyone's productivity and agility.
4. Clear path for work and strategies
Having a correct implementation of the OKR methodology will give us a clear path of work to the team. Which will make the efforts be better developed and with a clearer and more real focus.
The formulation and monitoring of OKRs is important. From the results that the proposed actions throw, it is that changes can really be established and decisions made .
We invite you to use this methodology to evolve your company or venture. If companies that are now enjoying success and best practices have implemented them, what are they waiting for to implement them in your initiative? Don't forget, success is an OKR away.
OKRs Vs Kpis: Difference Between Okrs and Kpis?
Based on the definitions, it is difficult to understand the difference, but it is there and it is significant. The main difference is that Objectives & Key Results are used for change and disruption management, while KPIs are used for process management ( run ). To put it simply, the first one plans and measures the challenges, and the second one - is the current project activities.
领英推荐
The purpose is not the same
While OKR goals are more bold and audacious, they are usually attainable and the result of an ongoing process or initiative.
Indicators have a variety of uses, including gauging staff performance, assessing an ongoing project or endeavor, and gauging a program's effectiveness.
However, OKRs encourage workers to be aspirational so that the business can advance, rather than measuring success.
Your success is measured differently
While achieving the expected result in the KPIs is positive, in the OKRs it is not so much. Conversely, if it is very easy to meet the OKRs it means that they were not ambitious enough to have an impact and you should rethink them.
Reasons for use
Companies use OKRs to set goals and improve the overall performance of their employees. On the contrary, they use KPI as a metric that reflects numerical data about how employees perform. In addition, KPI is a measurement tool that businesses use to manage employee performance. OKRs allow employees to focus on their goals by creating the smaller outputs employers expect them to achieve in order to achieve the goal.
Frequency of change
Another difference between the two is the frequency with which companies change, modify, or create new OKRs and KPIs. Department leaders often change OKRs on a quarterly basis, while KPIs are more likely to stay the same for a longer period of time, usually a year or more. For example, if a company has a two-year purchasing cycle, they will keep their current KPIs until the end of the purchasing cycle and then adjust accordingly.
KPIs are vertical and OKRs are horizontal
OKRs can come from a specific task and can even be used in personal life; they are not forced from executive roles on the basis of your business. Each of them has a unique OKR. KPIs are only developed by executives to track success in this instance.
In summary, the OKRs are a Strategic Framework and the KPIs are the Measures within that framework, which can be part of the Key Results.
Examples of successful implementations in different industries
When it comes to successful implementations in different industries, there is a great example of using OKRs (Objectives and Key Results) to lead. This goal-setting system provides a framework for companies to set strategic objectives that they want to accomplish, along with measurable key results per objective.
For instance, a sales team may have something strategically important downgraded to a KPI. By using OKRs, the team can then track progress towards achieving that goal, as well as identify any areas where improvement may be needed. This makes OKR frameworks strategically important to your organisation as it allows for greater focus on achieving desired goals. With this system in place, businesses can ensure that their teams are always working towards what matters most and remain productive and efficient.
KPI examples:
OKR examples:
Key Results:
2. Objective: Streamline internal communication and collaboration
Key Results:
3. Objective: Increase customer satisfaction
Key results:
The combination of Agile and OKRs can immensely benefit organisations in achieving their goals. Agile provides a flexible framework that allows for iterative, collaborative and incremental delivery of products while OKRs offer a clear vision and focus on what needs to be achieved. Together, they foster a culture of transparency, alignment, and accountability that drives success for teams. By creating a set of measurable goals that are aligned with the organisation's objectives, OKRs allow teams to track progress and make necessary adjustments to meet targets.
In summary, Agile and OKRs are complementary approaches that enable teams to work effectively towards achieving their objectives while fostering a culture of learning, innovation, and continuous improvement. It is important to note that OKRs are not just about setting goals but also about measuring the impact of those goals. Therefore, organisations must recognize the importance of OKRs in driving team success and adopt them as a standard practice.
Find out how to effectively implement OKR and achieve your goals with our expert guidance. Get your free checklist now by clicking here.