Bart den Haak is a lean software development consultant. He helps his clients and their teams to deliver more and higher levels of value, amongst others through better alignment of strategic Objectives and Key Results. For the Workpath Magazine Bart explained how the OKR framework can close the gap between strategy and agile teams to drive employee engagement and performance and what role organizational structure and culture play here.
At the Agilia Budapest in 2017 you talked about “The missing link” between company strategy and agile teams. How and why can OKRs close this gap?
Every company should have a mission. There should be a reason why the company exists. Connected to this company mission there should be a vision. A world picture of how we see the future in the coming 5 years or so. The company strategy define then the broad priorities to accomplish (part of) the vision on an annual base.
According to my case studies, I noticed that the latter is often missing: a solid annual company strategy. Without a solid strategy you cannot have clear Objectives for the year and/or quarters. But if you have a strategy, Objectives are perfect for slicing down your strategy to a quarter or month. This approach is very known under current management practices (e.g. MBO, Balanced scorecards) where you use goals to achieve your annual strategy. However, it doesn’t say how you get there.
Here the OKR fits in very nicely. It connects the company Objectives (what) to Key Results (how). This is the missing link
Current Agile/DevOps teams struggle to find their ‘purpose’, define their sprint goals or to see their impact within the organization. Focus, accountability and alignment are often missing. That is because the day to day operational work cannot be linked to the (often vague) annual or quarterly goals. Here the OKR fits in very nicely. It connects the company Objectives (what) to Key Results (how). The teams can influence the Key Results by creating epics and stories that will move the needle closer to the Key Results. This is the missing link. Because of this alignment, teams will get focus, transparency, accountability and increased employee engagement.
What role does organizational culture play here?
Based on a model of Dr. Ron Westrum, there are three types of organization cultures: pathological (power-oriented), bureaucratic and generative (performance-oriented). When you want to introduce OKRs the first time a generative culture might have the best chance for adoption. Companies with a bureaucratic culture could start experiment with OKRs, but it will take longer for the acceptance. It might even change a bureaucratic culture towards a generative culture if done right. When a company has a pathological culture, then OKRs will not work at all. First you need to establish a culture of trust before any goal setting tool can work. Do some analysis on your corporate culture first, before introduce OKRs or any tool in that matter.
Does organizational structure have to change when companies introduce OKRs? What about the function and responsibilities of leaders?
I’ve seen how OKRs can flourish inside a matrix organization e.g. Spotify or flat structures (sociocracy based like Holacracy). However, in traditional organization structures they can fit as well. It could even help to bring down the traditional model, because it helps with transparency, accountability and engagement.
Let teams deliver OKRs to their leaders.
Independent of the organizational model, leaders need to set constraints for their teams. In a traditional organization their might be more constraints. This again has to do with the company culture and the level of trust. OKRs are the perfect tool for setting constraints and goals by the leaders of those organizations. But it is very important to also have a bottom up approach incorporated. Let teams deliver OKRs to their leaders. They need to take them into account when setting the OKRs for the next quarter.
How can we teach agile collaboration and planning? Is it enough to just give teams enough autonomy?
Some teams might be more agile mature than others. Based on their agile maturity, leaders can give more or less autonomy. Giving teams too much autonomy can lead to moving into the wrong direction. Giving not enough can cause unmotivated and less accountable teams. It is critical to align teams with the company strategy. OKRs help with alignment of the company goals and the team goals. With a regular cadence of evaluating and setting your OKRs you can achieve collaboration between teams. Teams should be able to plan their work related to their OKRs.
What is different when using OKRs in software development? What did you learn here?
Most of the OKRs implementations I was involved with are related to software development. I noticed that on team level not many teams do measure their outcomes. And if they do, the Key results are still very much based on milestones (product X is live) and linked to their incident or requirements/planning tools (e.g. Jira, Service Now). OKRs help to slice work down and deliver business value in small increments.
What gets measured is what you get.
I believe we can make huge steps within the software space to work more data-driven. Within a marketing and sales departments this is very common. As a consultant I often help software teams with defining the metrics they can use to measure business value. But it stays an art in itself to come up with metrics that matter most to the team. “What gets measured is what you get”.
How can OKRs help to create high-performance teams? What do we need besides and beyond OKRs?
To create high-performance teams, OKRs are essential! Often they are missing. But when you add them, teams will get more focus and will become outcome oriented. When teams are outcome oriented they will do everything to optimize “the system” that is producing value. To optimize the system teams will use lean principles and techniques (basis behind DevOps) will be used.
It comes down to one thing: discipline!
Like with any framework (Scrum, XP, OKRs) it comes down to one thing: Discipline. When teams and individuals have the discipline to set goals and evaluate them on a regular cadence, it will help them tremendously. If not, you will probably fail and blame the framework “OKRs doesn’t work for me”.
In every organization there a doubters and skeptics - sometimes with valid concerns. How do OKRs show their usefulness and benefits most visibly, so I can convince these groups of people?
There is a soft side to OKRs (the Objectives are qualitative, inspirational) that people can experience as uncomfortable or vague. This is the same with agile for example. Often people say they ‘are agile because we have implemented Scrum’ or they ‘do goals setting by using OKRs’. But it should be a mindset. A different way of thinking. When those frameworks fail, they blame the system. But it often comes down to discipline to make these framework succeed. But OKRs also have a ‘hard’ or scientific side. They are called the ‘Key Results’. Based on facts and data. Most critics I’ve encountered like the fact of using metrics to drive success and outcomes.