Building an Agile Culture with OKR

Building an Agile Culture with OKR
www.leanperformance.com

The traditional
model is broken

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32%of employees in the U.S.
Gallup Daily Tracking, January 2016
13%worldwide
Only
Are engaged in
their jobs
and

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55%of managers
Only
Why Strategy Execution Unravels, HBR - 2015
company priorities
1 of 5could name

Although we are using Agile
tactically,
we are using waterfall for
strategy and goal setting

Jeff Immelt
Interview for McKinsey
Publishing in Oct/2015
“In the digital
age, sitting down
once a year to do
anything is weird,
is just bizarre.”

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Top-Down
Unidirectional
Irreversible Flow
No Feedback Loops
Ends Crashing on the Rocks
Cascade (or waterfall):

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Laszlo Bock
VP of People Operations, Google
“Research agrees with your
intuition:
Having goals improve
performance.
Spending hours cascading
goals does not.”

What is the greatest
challenge to executing
strategy?

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30%Failure to coordinate
across units
Why Strategy Execution Unravels, HBR - 2015
40%Failure to align

We have to use Agile on all
layers of management

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Strategy
Tactics
Operations
Culture
Goals
Waterfall Development
Big non-validated bets,
long feedback cycles
Annual Static
Planning
Top-Down,
Command & Control
Cascading
(Waterfall)
Goals
The Traditional Stack

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Strategy
Tactics
Operations Agile Development
Lean Startup +
Lean Prod Mgmt.
Culture
Goals
Half-Baked Agility
Cascading
(Waterfall)
Goals
Annual Static
Planning
Top-Down,
Command & Control
Waterfall Legacy

The Waterfall Legacy is in
direct conﬂict with Agile

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Strategy
Tactics
Operations Agile Development
Culture
Iterative, Hypothesis-
Driven Planning
“Silicon Culture”
Goals
OKR
(Goal
Agility)
Full-Stack Agility
Lean Startup +
Lean Prod Mgmt.

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Silicon Culture’s 6As
Agility Iterative, incremental, fast feedback
Autonomy Self-managed teams
Alignment 360º Alignment (between teams)
Accountability Focus on delivering value
Assumptions-
Driven
Data driven, hypothesis validation,
experiments
Authenticity Purpose, consistent values

When properly used,
OKR is a tool for cultural
transformation

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How Silicon Valley
sets goals?

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OKR: Objectives and Key Results
•OKR is an Agile goal setting framework.
When used properly, it helps expand agility.
•Created by Intel and adopted by Google in
1999.
•Used by LinkedIn, Twitter, Dropbox, GoPro
and several other companies.

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Objective:
•Aspirational.
•Memorable – Simpler, shorter, remarkable.
•Qualitative.
OKR: Components
Key Results:
•2-5 per Objective.
•Quantitative & Measurable.
•Metrics (recommended) or Milestones.

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Key Results:
•Increase average weekly visits to 3.3 per
active user
•Reach a Net Promoter Score of 52%.
•Increase non paid (organic) trafﬁc to 80%.
•Reduce revenue churn to 1%.
•Increase engagement (users that complete a
full proﬁle) to 75%.
Objective: Delight our customers
OKR - Example

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•Goal Agility: Instead of using an annual
static planning process, OKR uses shorter
goal setting cycles (usually every quarter).
•Simplicity: In order to enable frequent goal
setting, the process is extremely simple.
OKRs are simple and easily understood.
What is unique about OKR

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•Dual Cadence: OKR understands that
strategy and tactics have two different
rhythms:
•A strategic cadence with high-level longer-
term goals for the company.
•A tactical cadence with shorter-term OKRs
for the teams.

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•OKRs Don’t Cascade: OKR uses a market-
based approach that is simultaneously bottom-
up and top-down, creating horizontal
alignment between teams and reducing
interdependencies.
60% of the OKRs are set bottom-up, deﬁned by
the teams and aligned with the company goals.

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Seeking ambitious goals is a key principle in
OKR:
•Stretch Goals: Goals that are just beyond the
threshold of what seems possible and make the
team rethink the way they work.
•Separation from compensation: Decoupling
goals from salary and promotions is key so
that the team may go for hard and aspirational
goals.

How OKR complements
Agile and Lean

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Agile Engineering Doing the product right
Lean Startup Doing the right product
OKR For the right goals

Doing right the right
product for the right goals

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1.OKR helps create a results-focused culture.
2.OKR enables Agile Transformation by
replacing predictability with results.
3.OKR gives autonomy to the team.
4.OKR enables self-organizing teams.
5.OKR helps prioritize the backlog.
Complementing Agile

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1
OKR helps create a
Results-Focused Culture

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Agile was created as an alternative to
waterfall for managing software development
projects. As such, it is focused on managing
deliverables (user stories or features).
The Agile Manifesto itself refers to working
s o f t w a r e a n d v a l u a b l e s o f t w a r e
interchangeably. But they are not the same.
There are several methods for estimating
value in Agile, but none to track actual
business results.
From Features to Value

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For example, there is not a single event in
Scrum for tracking results.
It’s the “ship it and forget it” mindset.
OKR helps to change the mindset of the team,
creating a culture that is focused on
measuring and delivering business value.
From Features to Value

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“OKRs help Reframe the
situation from output
(features on roadmaps) to
outcome (business
results).”
Marty Cagan, Silicon Valley Product
Group

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2
OKR enables
Agile Transformation by
replacing predictability with
results

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One of the main barriers for Agile adoption is
the fear of losing control and predictability.
OKR helps overcome that by replacing the
perceived predictability of a Gantt chart with a
commitment to deliver pre-deﬁned business
results.
Instead of committing to deliver X by Y date,
the team commits to iterate towards the
agreed results.
From predictability to results

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3
OKR gives autonomy to the
team

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OKRs enables team autonomy by changing the
mindset.
•From: “the role of the team is to deliver the
features the customer/management wants”
•To: “the role of the team is to achieve the
success criteria as described in the Key
Results and agreed with the stakeholders.”
Enabling Autonomy

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4
OKR enables self-
organizing teams

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Self-managed teams
need direction
A set of OKRs will
give them that

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OKR helps prioritize the
backlog
5

“If a feature idea doesn’t
speak directly to one of the
top KPI’s [Key Results] on
the product scorecard
[OKRs], it’s generally off the
list.”
Marty Cagan, Silicon Valley Product
Group

Further Reading
Agile Goal Setting with OKR
www.infoq.com/articles/agile-goals-
okr

Building an Agile Culture with OKR

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