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How You Can Improve Organizational Alignment with OKRs

  • Publish Date: Posted over 1 year ago
  • Author: MATRIX Agile Practice

How You Can Improve Organizational Alignment with OKRs

Listen to the latest episode of The Agile Reformists podcast from MATRIX Agile Coach Todd Sussman below, or keep reading for a summary. Subscribe to The Agile Reformists podcast on Spotify to keep up with our episodes released every other Tuesday.

Objectives and Key Results (OKRs) are a collaborative goal-setting tool used by teams and individuals to set challenging, ambitious goals with measurable results.

Why should you care about OKRs? Because you should care about the all-important alignment between business and IT, which is critical for success with your Agile initiatives.

OKRs have been around for a while, having first been used by Intel in the early to mid-90s. But it wasn’t until 1999 when John Doer introduced OKRs to Google that they began to gain widespread interest.

Driven by a desire to realize greater alignment between “The Business” and IT, Google realized that there was a need for shared goals to help keep them aligned strategically, while still allowing smaller groups to remain autonomous at the same time.

They had a vision, and that vision was supported by the outcomes they were driving towards, and if you think about objectives, they are just outcomes you want to realize.

Defining the OKRs you expect to see is another great example of test first or shift left. It is by collaboratively defining the measures, that everyone gets to share in a common understanding of the expectations for each group in the organization.

A few years back, I was at a conference and the speaker said something that really stuck with me, It was along the lines of “Our beliefs define our values, our values form our principles and that impacts how we behave”.

The odds are the Agile values are reflective of your belief system, and as such I thought it would be interesting to look at how the evolution of those values became the principles and practices behind OKRs.

Individuals and Interactions over Process and Tools

OKR is not a methodology, it’s a framework. Reading a book will not give you a step-by-step guide to succeeding with OKRs. This is something you must understand and comprehend, so you can customize it to meet your needs. Like most frameworks, there are guidelines to help keep you safe, but in the end how you internalize it will dictate how well you take advantage of it.

Working Software over Comprehensive Documentation

Remember the definition of OKRs? Objectives will be supported by key results. Three key results is a good starting point, and the outcome is measurable. Capturing extensive details about the objective does nothing if you fail to execute.

Customer Collaboration over Contract Negotiation

Discussing OKRs should not feel like you are simply negotiating the measures. This is a bi-directional activity with mutual collaboration going on. Look at the organizational objectives and define how you can impact that outcome. Then discuss and set your OKRs keeping in mind that like anything Agile, you can revisit them.

Responding to Change over Following a Plan

The sweet spot for key results is to achieve somewhere between 70 – 85% of the target. If you find yourself delivering 100% of your objectives every quarter, then perhaps you aren’t aiming high enough.

Another way to look at this is through the lens of Roof Shots and Moon Shots.

A Roof Shot is something that more often than not, is binary. It is done or it is not done. While a Moon Shot is much more ambitious and riskier. They tend to be uncomfortable because they are nearly impossible to achieve with 100% success.

You must understand that some of your objectives are truly aspirational, and the plan behind them will change as you discover more about what you can influence.

OKR Principles and Practices

Like most frameworks, OKRs have a set of principles and practices that give them further structure.

  • Nested Cadences: Some goals are strategic. They anchor the direction the company will take. They are described in high levels and tend to be stable enough that they might not need to be revisited that often. But more often, OKRs represent tactical approaches, and those objectives should be set on a shorter basis, perhaps as short as a quarter.

  • Measure the Systems, Not the Goal: It is Goodhart’s Law that reminds us when a measure becomes a target, then it is ceases to be a good measure. The key result is not what you measure your progress against, you must measure the systems that influence the result you are after. For example, the goal of a professional sports team is to win every game. But if all you looked at was the scoreboard, you might know if you had won or lost, but not why.

  • Be Transparent: OKRs should be public information. It is that shared understanding that keeps teams and individuals aligned and accountable to each other.

  • Regular reviews, with the ability to re-calibrate: Just like objectives need to be challenging, key results must be measurable. And as with most things IT related, results can be separated into two main categories.

    Activity Based: The ability to measure the completeness of activities and tasks. These can be binary at times. We completed it, or we didn’t. Examples might include things like:

    • - Achieve Monthly Releases

    • - Generate X Number of Leads or Signed Contracts

    • - Complete Training on Something New

    • - Implement CI/CD

  • Value Based: Value-based key results speak more to the outcomes and expressing an understanding of the value they deliver:

    • - Improve conversion rates from X% to Y%

    • - Increase customer upsell from X to Y

    • - Decrease reliance on Paid Traffic Generators

At a minimum, you should review your progress biweekly, but I’ve seen many companies that look at these weekly.

While it is critical to treat OKRs as extremely important, it is also important to remember to separate OKRs from annual or quarterly reviews. They might be an input, but if they become the primary measure of success, then you return to a situation where the target becomes the measure.

Want to learn more about OKRs? Call MATRIX.