In any organization, large or small, a defined strategy and tireless accountability are essential to making sure all teams are aligned and focused as they go about their day-to-day work. For a company operating in a scaled agile environment, where teams are empowered to make decisions, strategic context must be crystal clear to create a trusting environment where teams can do their best work and drive business results.
OKRs, shorthand for objectives and key results, are a popular tool for companies to set strategy and hold their teams accountable for business outcomes. The concept of an OKR was created by Andy Grove at Intel in the early 1970s as an evolution of Peter Drucker’s management by objectives concept. But more recently, OKRs have been made famous by Google, who made it part of their organizational fabric back in the 1990s, when they were a 30-person company. Many point to OKRs as the strategy that helped Google become the successful, market-leading company it is today.
What are OKRs?
OKRs comprise two basic parts:
- The objective is qualitative and defines what you want to do
- The key results are quantitative and define how you’ll know if you have achieved the objective
How do I set up OKRs at my company?
As simple as OKRs sound, they are implemented differently at every organization. Google has shared their beliefs on getting the most from OKRs: much of their approach is based on the concept that there’s nothing worse than setting a goal too low and hitting it, and that all OKRs should be stretch goals. Key results should be gradable on a scale of 0 to 1, and you should be looking to hit somewhere around 70 percent.
They go on to stress that the OKRs are meant to be a focusing tool. Too many objectives leads to a diluted focus. Likewise, each objective should be accompanied by two or three key results.
Furthermore, Andy Grove stressed the key results (KRs) should be in balance with one another. For example, if there’s a chance that pushing for a particular result will compromise quality, you should identify a second key result that will safeguard quality. In other words, KRs should be paired to measure both effect and countereffect.
What’s different about OKRs in a scaled agile environment?
When operating in a scaled agile environment, alignment across teams and at different levels of the organization is essential. Team-level agile is an effective way to organize a group of people on a team (usually five to ten people) around common goals. Moving to the team-of-teams level (sometimes called programs or Agile Release Trains), the paradigm shifts to aligning 50 to 125 people to common goals. With more people to align, more work is needed to achieve that alignment.
Full enterprise agility involves aligning thousands of people. When OKRs have been fully deployed at companies like Google, Oracle, Slack, LinkedIn, Spotify, Twitter, and here at Atlassian, they’ve served as an amazing tool for company-wide alignment.
Unfortunately, a common misconception is that OKRs cascade down the org chart like a royal decree. The reality is that top-down, cascaded OKRs are too slow and kill autonomy. When goals are set at the top of the organization and handed down in one direction to lower levels, it creates a blocker at lower levels of business units, portfolios, programs, and teams. In this top-down model, the process of setting goals can take four to six months, which is inherently non-agile.
By making organizational goals clear and transparent, you’ll inspire convergence at all levels and surface areas of divergence. The beauty of implementing OKRs is that you can start anywhere.
Implementing OKRs within a SAFe context
OKRs are incredibly powerful as a focusing and learning tool. The same is true when it comes to using them in SAFe (Scaled Agile Framework, a popular model for enterprise agile and agile/digital transformations). You can define, link, and leverage OKRs at every level and grow an organizational coherence from them. OKRs are particularly useful at the following levels:
Crystallize your strategic themes and investment objectives around OKRs, and embed OKRs in every portfolio epic. OKRs owned by the Portfolio should demonstrate the contribution of epics towards desired outcomes, and will help you with investment decision-making.
Portfolio-level OKRs should serve as inspiration as the agile release train (ART) considers how it can best contribute. OKRs both assist with vision setting and provide context as ARTs unpack epics looking for features that will contribute to the defined objectives. For the product management perspective, ARTs sometimes set OKRs for high-priority initiatives, which provide laser focus to product management as they have for features that will make them.
Establishing OKRs for each feature provides great discipline when articulating outcomes rather than solutions. The important thing to remember is that you don’t have to do it all to get value.
Example: Aligned OKRs at every level
In this example, you can see a set of OKRs that are aligned to a company’s (fictional) mission to grow space tourism. Each level tracks a different objective, with the feature contributing to the program objective, and the program objective contributing to the portfolio level.
Each example also allows teams the flexibility to prioritize and decide on work that can contribute to their objective. If landing gear isn’t going to deliver an improved landing experience for the spacecraft, they can adapt and prioritize different work that can have an impact on the objective.
While the benefits are obvious, the truth is, wherever you start, you’ll see value and you’ll learn. It’s also possible for OKRs to live in different timelines. At the program and team level, program increments (PIs) tend to be the current timeline for setting and measuring OKRs. But as you move higher in the framework, you’ll find yourself with longer timeframes for achieving your OKRs.
Curious to hear more about how OKRs can help focus your organizational strategy and drive alignment on an ongoing basis? Learn more from SAFe fellow and AgileCraft advisor Mark Rix and Jira Align Product Manager Kyle Byrd in our webinar.