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Building an Agile Culture with OKR

Although we have been using Agile mindset and processes tactically, when it comes to strategy and goal setting the waterfall command&control mindset is still the norm.

Most organizations are still using an annual, waterfall, top-down process to create a static set of goals that conflicts directly with Agile. The process is even called "cascading goals" - you can't get more waterfall than that.

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Building an Agile Culture with OKR

  1. 1. Building an Agile Culture with OKR www.leanperformance.com
  2. 2. The traditional model is broken
  3. 3. @meetfelipe 32%of employees in the U.S. Gallup Daily Tracking, January 2016 13%worldwide Only Are engaged in their jobs and
  4. 4. @meetfelipe 55%of managers Only Why Strategy Execution Unravels, HBR - 2015 company priorities 1 of 5could name
  5. 5. Although we are using Agile tactically, we are using waterfall for strategy and goal setting
  6. 6. Static Annual Planning
  7. 7. 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.”
  8. 8. Goals Cascade ?
  9. 9. @meetfelipe Top-Down Unidirectional Irreversible Flow No Feedback Loops Ends Crashing on the Rocks Cascade (or waterfall):
  10. 10. @meetfelipe Laszlo Bock VP of People Operations, Google “Research agrees with your intuition: Having goals improve performance. Spending hours cascading goals does not.”
  11. 11. Cascading creates silos
  12. 12. What is the greatest challenge to executing strategy?
  13. 13. @meetfelipe 30%Failure to coordinate across units Why Strategy Execution Unravels, HBR - 2015 40%Failure to align
  14. 14. There has to be another way
  15. 15. Full-Stack Agility
  16. 16. We have to use Agile on all layers of management
  17. 17. @meetfelipe 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
  18. 18. @meetfelipe 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
  19. 19. The Waterfall Legacy is in direct conflict with Agile
  20. 20. @meetfelipe Strategy Tactics Operations Agile Development Culture Iterative, Hypothesis- Driven Planning “Silicon Culture” Goals OKR (Goal Agility) Full-Stack Agility Lean Startup + Lean Prod Mgmt.
  21. 21. @meetfelipe 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
  22. 22. When properly used, OKR is a tool for cultural transformation
  23. 23. @meetfelipe How Silicon Valley sets goals?
  24. 24. @meetfelipe 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.
  25. 25. @meetfelipe Objective: •Aspirational. •Memorable – Simpler, shorter, remarkable. •Qualitative. OKR: Components Key Results: •2-5 per Objective. •Quantitative & Measurable. •Metrics (recommended) or Milestones.
  26. 26. @meetfelipe 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
  27. 27. What is unique
  28. 28. @meetfelipe •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
  29. 29. @meetfelipe •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. What is unique about OKR
  30. 30. @meetfelipe •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. What is unique about OKR
  31. 31. @meetfelipe 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. What is unique about OKR
  32. 32. How OKR complements Agile and Lean
  33. 33. @meetfelipe Agile Engineering Doing the product right Lean Startup Doing the right product OKR For the right goals
  34. 34. Doing right the right product for the right goals
  35. 35. @meetfelipe 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
  36. 36. @meetfelipe 1 OKR helps create a Results-Focused Culture
  37. 37. @meetfelipe 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
  38. 38. @meetfelipe 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
  39. 39. @meetfelipe “OKRs help Reframe the situation from output (features on roadmaps) to outcome (business results).” Marty Cagan, Silicon Valley Product Group
  40. 40. @meetfelipe 2 OKR enables Agile Transformation by replacing predictability with results
  41. 41. @meetfelipe 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
  42. 42. @meetfelipe 3 OKR gives autonomy to the team
  43. 43. @meetfelipe 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
  44. 44. @meetfelipe 4 OKR enables self- organizing teams
  45. 45. @meetfelipe Self-managed teams need direction A set of OKRs will give them that
  46. 46. @meetfelipe OKR helps prioritize the backlog 5
  47. 47. “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
  48. 48. Further Reading Agile Goal Setting with OKR www.infoq.com/articles/agile-goals- okr