Agile Transformation OKRs: Driving Agile with Success

So, how does it work? Read on to learn how to use Agile transformation OKRs in your organization.

First things first: OKR stands for “objectives and key results.” The concept of OKRs was originally developed in the early 2000s by John Doerr, a venture capitalist working with Google. OKRs are a part of the Scaled Agile Framework (SAFe) and have since been widely adopted beyond the tech industry and applied to a variety of sectors.

You can split OKRs in half with two questions:

• Objective: Where are we going?
• Key Results: How do we get there?

Broadly speaking, OKRs are a set of goals for an organization that are specific, measurable, and time-bound or pinned to a specific deadline. Objectives should hit a sweet spot between ambitious and achievable, while key results should encompass data that shows trends over time. To break it down further, here’s what each half should include:

Objective:

• Ambitious: Goals should be big-picture and make a big impact
• Qualitative: Defined verbally in concrete terms (saving quantitative definitions for the KRs)
• Actionable: This is the flip side of ambitious – goals should be big, but achievable in the current business environment
• Time-bound: A deadline should be inherent in the objective itself

Key Results:

• Measurable: This should speak directly to the qualitative part of the objective, as something that can be measured in quantifiable terms
• Specific: The KRs should be granular, easily defined, and clearly understood
• Time-bound: Like the objective, Key Results should be defined by a set timeframe
• Verifiable: Like any good scientific process, key results must be repeatable and traceable – teams should be able to see clear cause-and-effect relationships through them

For companies pursuing Agile transformation, OKRs are a particularly well-suited way of thinking about change. That’s because Agile principles and OKR guidelines share many common features. When used together, they help align the work of individual teams with larger organizational goals and strategies.

On a team level, Agile OKRs ensure that delivered work is purposeful and serves the long-term aims of the organization. On an organizational level, Agile OKRs close the gap between strategy and execution, creating actionable plans and accountability.

What’s more, OKRs help organizations achieve business agility by guiding them through the core principles of Agile, including:

• Empowering employees to self-organize and determine the best way forward for their individual teams
• Increasing transparency through a common goal-setting process, with widely shared results and open feedback
• Providing opportunities for rapid feedback and course correction based on leading indicators
• Providing clear alignment to strategic goals through regular assessment of results and adjustment of objectives when needed

Put together, OKRs for agile transformation help organizations achieve better—and faster— outcomes while promoting collaboration and efficiency. Let’s take a look at how OKRs specifically empower agile transformation.

Alignment around strategic goals

OKRs and Agile both prioritize aligning individual goals within teams, as well as aligning teams with larger company goals and strategy. Across the organization, teams, and leadership must agree upon and embrace the same objectives. This keeps everyone in the organization rowing together, eliminating costly silos while facilitating alignment.

However, Agile alignment isn’t a one-and-done process.

Keeping Agile work processes well-aligned is easiest when they’re used alongside OKRs that track progress and provide transparency.

Better work prioritization

When competing goals pile up, organizations can struggle to determine the best (and most profitable) way forward. OKRs for Agile transformation solve that problem by creating a system for effectively prioritizing work, focusing on what matters most right now without losing sight of the long game.

Consistent feedback and transparent metrics are also crucial to reprioritizing work as needed. Put together, Agile transformation OKRs provide better understanding of current priorities and how to deliver real customer value.

Track important outcomes more easily

OKRs rely on data in order to make goals, track progress, and determine whether the goal has been achieved. The key results of OKR are often leading indicators of what’s working and what isn’t.

Pairing OKRs with Agile’s emphasis on experiment-and-fail-fast method makes organizations better equipped to test new initiatives – and determine which initiatives are driving business value.

Faster feedback and course correction

At its core, Agile is a quick and nimble feedback loop – as its name suggests.

If something isn’t working, it’s fixed quickly before it can cause further issues. OKRs, with their dependency on continuous stakeholder input, provide the perfect framework for getting feedback into an Agile system. Put together, they facilitate faster feedback and course corrections.

This speed is critical to business success. OKRs for agile transformation make it easier to identify when something goes wrong and to pivot accordingly.

Let’s look at how companies use Agile transformation OKRs. But first, learn how to maximize the success of your Agile transformation. Download the “Why Agile Transformations Fail” eBook to see how you can avoid common pitfalls that undermine your transformation efforts.

Using OKRs to accelerate Agile transformation requires a commitment to organization-wide goal alignment, as well as a transparent process for feedback and course correction. The most important first steps to lay a foundation for Agile transformation OKRs are:

• Make goals clear and adaptable. Alignment across teams can only be achieved through maximum visibility of goals and KPIs. Hidden agendas and competing silos are counterproductive to OKRs in Agile – everyone needs to be working on a common set of goals, with a clear understanding of each team’s contribution. Additionally, this level of clarity fosters the accountability and open communication required to quickly adapt goals to changing conditions or negative feedback.
• Prioritize work and increase focus. Some goals are necessarily more urgent than others. And yet, focusing on immediate gains at the cost of future growth is the downfall of many previously successful businesses. Agile transformation OKRs can help organizations navigate the balancing act between short- and long-term goals, by prioritizing objectives appropriately. If something is out of order, the key results will quickly highlight it and force stakeholders to refocus their energies.
• Enable continuous improvement and feedback at the strategic level. Instead of envisioning Agile as a linear process, think of it as a loop – by consistently gathering feedback, organizations can refine their goals, improve their outcomes, and gather more input to assess the success of the process. OKRs allow success criteria to be clearly defined, as well as pointing to areas of improvement. At a strategic level, executives can refine goals more quickly and effectively when both OKRs and Agile are working in concert.

How to set OKRs in an Agile organization

Some organizations might already be using Agile processes, but they’re unfamiliar with how to set OKRs. Fortunately, OKRs can be easily integrated into Agile transformation projects, and the OKR framework lends itself to any company that wants to become more Agile. It’s a strategic two-for-the-price-of-one move.

Before setting OKRs, it’s critical to have a clear understanding of the organization’s mission and vision. OKRs should point directly toward purposeful work that will deliver immediate gains while shoring up long-term strategic goals.

Additionally, it’s important that OKRs are created by the people who do the actual work that they impact. That’s because they’re the ones who sit closest to the key results, and they should have the clearest vision for them. It’s the role of stakeholders to review OKRs and ensure that they’re linked to larger organizational objectives and strategies.

And finally, OKRs for Agile transformation will change frequently – and that’s a good thing! The iterative nature of OKRs leads organizations to clearer focus, better alignment, and a stronger commitment to purpose-driven work.

Organizations clearly have an appetite for adopting Agile practices, as well as reaping the promised benefits of quicker time to market and faster, more effective pivots away from failed iterations. And OKRs seem, theoretically, like a good fit for making Agile transformation actionable.

But what does a partnership between OKRs and Agile transformation look like in real life?

Here are some examples of how OKRs and Agile practices combine to create more capable teams, leaders, and cross-functional partnerships.

Agile team capabilities

Agile transformation OKRs exist most critically on a team level, where processes are most granular and susceptible to needless slowdowns. Getting buy-in on a team member level can truly fulfill Agile’s promise of leaner, more effective teams that are capable of quick pivots and huge results.

Here’s a hypothetical example of what OKRs might look like on an Agile team level:

Objective: Our teams collaborate effectively, work transparently, and quickly integrate feedback in support of strategic goals.

1. Key Result: The number of teams using Agile product portfolio management solutions to track their work increases from 65% to 73%
2. Key Result: Percentage of team leaders who report enhanced collaboration among their employees with the implementation of Agile processes increases from 35% to 55%
3. Key Result: Time to market for emerging products is reduced by 27% compared to pre-Agile timelines

Leadership buy-in and participation

Tone at the top is crucial to the success of any organizational change, and Agile transformation is no exception.

Increased leadership engagement with Agile processes can vastly multiply their potential impact, and have downstream effects across the business.

Here’s what a potential set of Agile transformation OKRs could look like for leadership buy-in and participation:

Objective: Leaders provide strategic direction to teams during the process of Agile transformation, and communicate clear goals and transparent feedback as they work to guide processes.

1. Key Result: In an anonymous employee survey, 89% say they’re confident they have a clear grasp of overall business goals
2. Key Result: The number of employees who would describe their manager’s style as Agile and responsive increases from 61% to 79%
3. Key Result: The number of teams who say they have consistent and actionable feedback from executive stakeholders rises from 53% to 66%

Business and IT collaboration

Cross-functional teams are at the heart of the most effective Agile collaborations, and IT is an essential partner in facilitating this level of collaboration.

Information technology teams can have a powerful impact on how the business functions, empowering it with tools that make work quicker, clearer, and more effective. Thus, IT is a necessary enabler of Agile processes and a key place to apply OKRs.

Here’s what OKRs for Agile partnership between IT and cross-functional business teams might look like:

Objective: IT and business development teams communicate clearly, build trust, and work toward continuous improvement together.

1. Key Result: Managers report decreased IT ticket resolution times, down from 3.5 days to 1.5 days on average, when employees are encouraged to follow preferred reporting guidelines as outlined by IT leadership
2. Key Result: The number of teams who self-report as cross-functional in critical business areas increases from 40% to 60%
3. Key Result: Internal iteration timelines for product development decrease by 13% organization-wide, signaling greater efficiency and quicker pivots

For organizations that are looking for a strategic approach to implementing Agile values, Agile transformation OKRs are the perfect complementary framework.

OKRs for Agile transformation highlight alignment on strategic goals, prioritize collaboration and focus on the most impactful projects, and encourage a transparent and flexible working environment. OKRs in Agile organizations can supercharge the adoption of Agile practices within an organization, by making them actionable and easy to assess.

Combine Agile speed with concrete OKRs. Register for the on-demand demo of OKRs in Planview® Portfolios and discover how you can drive Agile transformation successfully and on your timeline.