Why OKRs Are Essential to an Agile Transformation

Why OKRs Are Essential to an Agile Transformation

Objectives and key results (OKRs) are often considered fundamental to the success of a modern organization. After all, Google famously makes extensive use of OKRs, so the rest of us should too, right? But are they always advisable as part of a transformation toward Agile ways of working?

The answer is, “yes, but it’s far from the full story.” In my experience with talking to coaches and managers, if you ask them about OKRs that are not implemented effectively, you’ll often hear negative opinions such as “they’re just another management fad” or “another minimally useful tool to tick off the list.”

But if you implement OKRs in the right way, team members tend to discover how truly powerful they can be when it comes to uniting teams, boosting autonomy, and avoiding wasted time. OKRs hold important opportunities across teams, while not necessarily at the level of every individual topic or area of work. Teams need to follow a few basic rules to best leverage OKRs—below are some tips to make that happen.

?The “why” and the “how” of OKRs

Many companies embark on a transformation with the central goal of increasing agility—their ability to successfully respond to change. This change can be in customer needs, market conditions, or the technology available to build products, solutions, and services.

Typical steps in this journey include forming new team structures, fostering Agile leadership behaviors, revamping technology platforms, and introducing Agile frameworks like Scrum or Kanban. Organizations are also likely to turn to OKRs, but many of these organizations struggle to achieve the desired benefits.

Fundamentally, OKRs help teams or individuals to deploy a strategy that is designed to deliver concrete actions. As an example, a human resources department might set a strategic priority to become a highly attractive employer for top talent. Accordingly, the department could define an objective as increasing employee wellbeing with these key results:

??Quarterly wellbeing survey receives more than 90% participation rate and a Net Promoter Score (NPS) of more than 75%

??Sick leave per month reduced from 2 to 1

??More than 90% of snacks in common areas are considered healthier food options

It’s important to separate implementation from outcome—in other words, understanding the difference between “why,” “what,” or “how.” This can lead to greater autonomy and motivation across teams, as well as greater innovation in terms of what teams do to reach their goals.

OKRs at the team level

Given the popularity of OKRs, the art of effectively writing them at a team level is typically well understood, but still challenging. The grammar is simple: one qualitative OKR with generally one to three quantifiable key results.

A strong OKR is the basis for a team to start thinking about actions they can take to achieve their goal—which is why generic objectives are ineffective. OKRs should be motivational and apply to your business specifically—recycling aims such as “increase revenue in x sector” provides little value.

Neither objectives nor key results should be simple lists of tasks. An objective is more complex and an evolving set of “why” principles: the key results help clarify where you want to go, and whether you are on the right track.

Scaling OKRs from adaptation: Alignment enables autonomy

Scaling Agile ways of working means applying Agile principles beyond a single team to multiple teams or teams of teams—possibly hundreds of them. In a scaled setting, the need for alignment is obvious, and scaled structures such as tribes and roles—tribe leads and chapter leads—and scaled processes such as increment planning have emerged.

Additionally, scaled governance mechanisms such as annual or quarterly business reviews are typically defined to ensure both high autonomy of teams and clear alignment between them. OKRs can play a key role in creating the crucial autonomy and alignment required across multiple teams and organizational units.

Below are six key factors for successfully embedding OKRs in a scaled Agile transformation journey:

1.?OKRs need to be integrated. They cannot just be the icing on the cake or handed down from an upper management layer and simply enforced from the top down. To implement, you must take the teams on the journey to define OKRs together on the levels of alliance, tribe, or team.

2.?Ensure transparency around how OKRs across the various levels are tied together, but avoid strict hierarchical breakdowns. Avoid situations where teams are working toward different objectives. This is common when teams don’t discuss OKRs adequately or don’t separate them from tasks and specific activities.

3.??Encourage your teams to invent and live their OKRs. Determine if the OKRs are helpful for the teams to chart their course. Ask questions such as, “are they being used daily or weekly to guide our actions?” or “are the OKRs clearly understood by the whole team?”

4.?Review and refresh your OKRs regularly. Quarterly reviews are commonly the most useful period and should be the norm, regardless of any substantive changes in the business. OKR reviews should be an opportunity to inspect and adapt.

5.?Your journey toward OKRs should be guided by Agile principles. Never expect the first OKR set to be perfect; Agile coaches understand it’s a journey and adjusting as you learn is common.

6.?Stop using other competing planning methods as they become obsolete due to new OKRs. Delete them and set people free by reducing non-value-adding governance mechanisms.

Keeping these principles at the center of your OKR journey will ensure your teams can effectively scale and unlock major Agile-centered benefits that go far beyond simply compiling a list of tasks in the most efficient manner.

When executed with autonomy and intelligence, the use of OKRs can provide the missing link that unites structure, leadership, and technology in the most forward-thinking Agile organizations and deliver superior outcomes.