OKRs - Surfing the wave of digital transformation
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This document discusses Objectives and Key Results (OKRs), an agile corporate strategy execution method. It defines OKRs as setting ambitious qualitative objectives and quantitative key results to measure progress. OKRs provide radical clarity on goals, create an aspirational pace with quarterly focus, and ensure goals are localized and aligned across teams. When done properly with regular tracking, OKRs motivate teams more effectively than traditional management-by-objectives and allow for learning and agility.
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OKRs - Surfing the wave of digital transformation
- 1. OKRs Surfing the wave of digital transformation 2018
- 2. 2
- 3. 3 Introduction What’s the reason for outperformance? 0 2 4 6 8 10 12 14 16 18 20 22 24 Burrow Payne Ibelli Gudauskas Andlino Igarashi Medina Florence Slater Smith Fanning Wilsonq Flores Younr Toledo Andre Bourez Buchan Parkinson Kerr Zietz Wilkinson Coftin Dantas deSouza Ferreira Freestone Kennedy Floravanti Santos Asing Callinan Melling Pupo Source: http://www.surfinglines.com/uncategorized/ultimate-guide-surf-stats/ EVERYTHING I’VE EVER ACCOMPLISHED IN THE OCEAN HAS STARTED WITH THE QUESTION “WHAT IF?” JOHN JOHN FLORENCE
- 4. 4 Introduction Strategy needs to evolve faster and employees must understand it and engage faster in this digital age Of people don’t understand the company strategy and how they contribute 92% Of companies’ current business models will not remain economically viable 93%
- 5. 5 Introduction More PowerPoint decks and meetings don’t create more strategic agility and speed If it takes 4 months to do the plan, 8 months for people to understand it, then the year is lost
- 6. 6 Headline The Objectives and Key Results method enables you to achieve amazing results A successful system needs only to answer two questions: Where do I want to go? The answer provides the Objective. How will I pace myself to see if I’m getting there? The answer gives us Key Results. Andy Grove, former CEO of Objectives and Key Results (OKR) is an innovative, agile corporate steering method to successfully execute strategy at all levels of the organization Strategy Execution Method What are OKRs
- 7. 7 What are OKRs Make your strategy a reality with Objectives & Key Results Objectives What is success? What do you want to accomplish? Definition: Objectives are ambitious qualitative team goals providing the organization with clarity on intention, focus and direction Example: Organizations thrive or die on the effectiveness of their management decisions - we will thrive Key Results How will you know when you get there? How will you measure it? Definition: Key results are quarterly defined quantitative metrics tracking team progress towards objectives Example: Present 3 innovative proposals to the Board which are approved
- 8. 8 This technique and approach provide… Radical Clarity Clearly and objectively define real success – it’s an accelerant. The time lost from lack of clarity can never be recovered.
- 9. 9 The technique and approach is… Aspirational and inspirational The most probable result is never the best possible result. Aim for greatness, not mediocrity predictable or probable victory achieved best possible result
- 10. 10 The technique and approach is… Localized, aligned and transparent. Cascade and coalesce; localize to the nouns and verbs of each team. A perfect OKR is “an elevator speech” on value.
- 11. 11 The technique and approach create… Fast, Focused Pace Quarterly OKRs and weekly attention drive sharp focus on best results. Learning and iteration is designed in so we’re more agile.
- 12. 12 What are OKRs OKRs are more popular than MBOs because they are a better way to more efficiently and effectively motivate teams 0 10 20 30 40 50 60 70 80 90 100 1/1/20101/1/2004 1/1/20161/1/2006 1/1/2008 1/1/2012 1/1/2014 1/1/2018 1/1/2020 OKR MBO
- 13. 13 What are OKRs OKRs answer the magic question: “What are you working on and why?” We‘re working on X Because Sam said it‘s important We‘re done when Sam is OK with it We‘re done when we don‘t feel like it anymore We‘re working on X. Beacuse we feel like it We‘re working on X. Because we think it‘s going to give impact Y, which matters to the company because of Z We‘re done when the metrics have moved Business Intent & Value Ideas Analysis In Progess Shipped Value & Outcomes achieved % $ # % $ Agile Development Objectives & Key Results
- 14. 14 What are OKRs OKRs are a mindset, methodology and tool Well designed OKRs are ambitious, have input from relevant people, and provide people with clarity and focus Keep regular track No “set and forget” mindset – OKRs are regularly tracked and used to resolve problems Proper tools OKRs are integrated into enterprise systems – we recommend dedicated OKR management software Full commitment Management lead by example – OKRs are not viewed as a “nice to have” but critical Align properly Direct link between top management priorities and the teams delivering. Align horizontally too
- 15. 15 What do you want to accomplish in the next 90 days?
- 16. 16 THE TEAM PHILIPP SCHETT MARC WAGNER BRADLEY KALGOVAs STEFAN WILHELM
Editor's Notes
- Hi Everyone, thanks for making the time to come today. The purpose of this presentation is two fold. Firstly, there have been a pleathora of business framework to assist decision makers in the digital age. OKRs are the first framework to unite all these perspectives. Secondly this provides us with a chance to share with you some on the ground stories and advice from implementing OKRs at our clients.
- You might have noticed my tan (OK let’s its faded now) but last week I was actually in Mexico. Yes that’s me in the photo. Now you might be wondering what surfing have to do with OKRs and you’d be right. Well while I was out on the waves, most people would be thinking about the next wave or the reef underneath or anything else. I started thinking about thinking about the what makes a great surfer.
- I mean there are plently of good surfers, but what differentiates a good surfer from a truly amazing surfer. As the chart shows, there are plently of very good surfer, but as you can see on the chart, Florence really leads the pack by a mile. What makes him different from the rest? reigning 2x World Champ John John Florence
- Unfortuantely this attitude does not seem to be reflected back on land with corporations citing that 92% of companies’ current business models will not be economimcally viable and within these companies only 7% actually understand the strategy and how they contribute
- However, it’s not really about more storytelling or more motivation that is needed (well that is not what is needed most). In this digital age, implementing strategy is still stuck in a 1987 era with powerpoint and excel gannt charts. If it takes 4 months to do the plan, 8 months for people to understand it, then the year is lost
- OKRs are something which is new which consists of two parts: An objective – a qualitative aspirational statement describing what success looks like and key results, quantitative metrics which track progress towards these objectives. Objectives and Key Results (OKRs) are composed of two parts: Objectives - single sentence qualitative aspirational statements which define success and Key Results - quantitative metrics which determine that you are heading in the right direction OKRs were originally developed by Intel and popularized by Google and are now being adopted by many organizations for the following reasons
- SO here’s an example : go to last line
- Clarity focus on smart meters We are all busy people and we all have a lot on our plate. It’s important that we focus on the things that really matter. This exercise clarifies this for us and then enables us to have an educated discussion when additional tasks/ items arise about whether they should really be our focus and if so, what should we reprioritize
- This is about being aspirational and also team based. For example, an objective is “We are the team of best mountain climbers in the world” and the KR on how we measure would be “We climb Mount Everest 10 times in the next 90 days. Why 10, because it takes 9 days to go up and down safely as team. Not 11 because that is impossible, not 2 which is what you ma have done last quarter which is the most likely. There might be bad weather and you only go up 8 times, but you can still declare victory at 8 because you would never have got even close if you had set the target at 2.
- EDMI put OKRs in an Australian context… The objectives and key results that you set should be in the nouns and verbs that make sense for your team – and don’t need to be in management speak. They are a communication device for you to tell everyone about the successes that your team has had so it’s not uncommon for people to be logging into Workboard everyday to update everyone on their status and successes.
- This is a very agile approach to goal setting – this isn’t about setting the plan for the rest of the year and then reflecting at the end of the year on how it didn’t reflect reality or wasn’t useful. The process of setting and reviewing the OKRs happens every 90 days so you can see progress fast.
- OKR have risen in popularity. This is US data where OKRs have just overtaken MBOs this year.
- OKRs complement agile and help teams define and align business outcomes for products they build How will the value of ideas be assessed? “Shipped” does not equal “valuable” Feature factories: Told what to do and incapable of deciding. Build what piques their interest until it doesn’t… Value driven teams: Identify the potential business value, then build until value is created…