How OKR work in Agile

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Feb 03, 2023

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What Are OKRs?

In simple terms, objectives and key results (OKRs) are a framework for setting goals that help companies measure and track performance more efficiently.

Brief History and Main OKR Attributes

  • Andrew Grove also known as the “Father of OKR” introduced the objectives and key results (OKRs) around 1980 in order to set the goals. This method was later adopted by Google which made it more popular. OKR method can be used to keep everyone’s focus and awareness on a common goal. Now, many famous organizations like LinkedIn, Twitter and others have adopted the OKR's framework.
  • It is imperative that you should first understand the meaning of OKR first, which involves comprehending its two main components - objectives and results.
  • Objectives include the target to be achieved, it should be concrete, inspirational, and significant so that the team can work towards it effectively.
  • Results are the fruitful outcome of hard work, a result should always be logical, specific, and verifiable.

How Agile and OKRs Work Together?

Different sources indicate that about 60-90% time the reason for failure is poor strategy execution in an organization. A company’s vision must be aligned with its achievement to encourage collaboration between individuals and teams. An Agile project management approach represents the mechanisms and methodologies that a team uses to accomplish uniqueness.

Whereas the business goals and the direction of the business are decided by the OKRs. It is possible to boost productivity and create engagement among employees by combining OKR and Agile Project management philosophies.

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Alignment with Strategic Goals

  • If you want to do excellent and remarkable work then using the Agile approach in work management will prove to be a great deal of help. Agile approaches include collaboration, proactiveness, meaningful processes, and logical practices all these qualities contribute to a successful mindset.
  • It's necessary to find a way to get every team member to understand and accept the organizational goals to ensure complete alignment. Agile is an effective way to align the work processes, but the objectives must also be common for everyone.
  • In an established organization it is imperial to bring every individual’s mindset together to attain a proper alignment. The key to success is well explained in OKR’s framework transparency among the teammates in an organization, in a simple yet effective way.
  • This is because people are more likely to be aware of the business value of their work, collaborate better, and feel more responsible and accountable when their top goals are shared.

Goal Evaluation through OKR Cadences

It is crucial to keep evaluating OKRs at regular intervals through their frequent cadences, which is one of the advantages of OKRs. Organizations can adapt this based on their specific needs, but generally high-level goals are evaluated annually and team OKRs are evaluated quarterly. In subsequent iterations, organizations and teams can introduce improvements based on changes along the way.

Agile project management calls for more frequent delivery of working software, embracing change, and adapting towards effective outcomes. OKRs can therefore thrive in Agile environments if they are aligned with Agile project management principles.

Tracking Outcomes with OKRs

Establishing OKRs keeps us informed of our progress and measures our business results so that we know if we are moving forward in the right direction. It is essential for our company to eliminate the potential widening of our goals’ scope by using OKRs (Objective-oriented Key Results) to track progress and make necessary changes along the way.

Why OKRs Can Support an Agile Transformation?

The OKR framework aims to resolve the issues through its inherent enhanced visibility and transparency, as reported by the State of Agile Report. Achieving synchrony between strategy and execution is also another challenge when adopting Agile project management and scaling Agile across the organization. Let's observe how we can achieve the perfect goals with the help of OKR’s framework.

Clear & Adaptive Goals

In terms of strategic planning, agile thinking aims to simplify and speed up the work process. It promotes action-oriented, measurable, and concrete company goals. As a result of complete transparency of the strategic goals, all stakeholders can clearly see what the company wants and be able to contribute to its achievement on a daily basis.

On the other hand, when you collaborate with your internal teams and customers, you are able to respond to the changes without any inconvenience or stress.

Greater Focus & Work Prioritization

The purpose of Agile is to allow time to be allocated for value-added activities instead of upfront planning. By using OKRs at the strategic level and with a proper review, you can ensure the objectives and key results are in synchronization with the emerging market trends at the right time. This in turn allows greater focus on customer value when you combine the two approaches when defining your high-level goals.

Continuous Feedback & Improvement

An agile approach is built on the principle of being receptive to changes throughout the project’s lifecycle. Being open to change allows you to adapt to new demands and satisfy them. Some factors like an abrupt shift in priorities may invite workflow chaos, in order to avoid that, an environment should be created where market conditions or client requirements are flexible.

Achieve Agility with Agile and OKRs through Kanban

Agile practices such as visualizing work bring company transparency on the one hand while creating a positive environment for setting focused and reliable OKRs. Agile and OKR’s coexistence fosters alignment between strategy and execution because they introduce feedback loops and focus on customer needs.

Bringing transparency, efficiency, and continuous improvement under the same roof can be achieved by using a method such as Kanban.

Enhanced High-Level Visibility

Kanban is a system that focuses on gaining visibility and improving workflows. In addition, it delivers a simple way to visualize work not just in teams but across the entire the management team as well. From an OKR perspective, this is achieved by setting up a network of related Kanban boards with a management hub at the top that visualizes both company and team-level results.

All stakeholders can stay on top of the organization's strategy and execution by mapping objectives to key results and their implementation. This allows high-level transparency an essential part of any strategic planning process.

Limiting Work in Progress

Focus is of utmost importance to the OKR method. Rather than trying to set everything at once, OKR requires us to focus on the most important things. Kanban prevents overburdening distraction, and interruption of your work rhythm by limiting your work in progress.

Establishing Regular Feedback Loops

The Kanban cadence provides a great deal of help to form regular feedback loops and solutions for the teams and management. Objectives are the result of creativity, hence they imply feedback exchange. Implementing strategies and team OKRs completely rely on the inputs.

Meeting outcomes serve as a basis for company-level meetings, such as strategic OKR reviews. In order for a company to be able to respond to necessary changes promptly, it is imperative that teams and management are aligned closely.

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Benefits of OKRs

  • By setting high-end goals, the company's aspirations and direction become clearer to every team member.
  • Individual OKRs enable teams to focus on short-term actionable goals without being aligned with the organization's strategic plans.
  • Creating an environment of engagement and responsibility is made possible by OKRs, promote autonomy and transparency throughout the company.

How to Create OKRs?

It is important to understand the purpose of OKRs in order to set them up correctly. OKRs are influenced by many factors, including the industry domain. Framing objectives and key results properly are the key requirement which is also a game changer.

In Summary

You can Map, track, and measure the business outcomes by understanding what OKR is and implementing the framework smartly into an Agile environment. With an OKR framework and an Agile mindset, businesses can achieve business agility by:

  • Engaging employees through self-organization
  • Using visualization techniques to enhance transparency
  • By regularly evaluating results, goals can be aligned

To understand OKR in Agile, one needs to know agile first. Enrol in StarAgile’s SAFe training,  the most trusted institution for SAFe certification. Learning agile methodology will help you to understand OKR in agile better.

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