By adopting the OKR methodology, Agile Lab goes beyond the well-known limits of most organizations which are based on a command-and-control model.

As a matter of fact, most of the traditional organizations deal with slow decision-making processes, difficulties in keeping a high level of innovation, and a lack of employees' commitment and ownership.

What are OKRs?

OKR

OKR (Objective and Key Result) is a goal-setting framework conceived to spread the company's strategy among employees and to support the efficiency in the execution of tasks with a transparent and collaborative approach.

From a historical point of view, the OKR method is generally attributed to Andrew Grove, who introduced it to Intel during his tenure and later to John Doerr at Google.

As the name suggests, an OKR is made of an objective and some key results

• the objective describes the company priorities in the short term, consistently with the company purpose and the long-term vision. This is the outcome of the process since it explains "what" we want to achieve.

• key results are a list of results that must be numeric, measurable, and linked to the objective. They show how near the company is to the objective. They are the output of the process since they explain "how" the goal will be achieved.

As a rule of thumb, a company should have no more than 2 OKRs per cycle. This will lead to the choice of real priorities. Ideally, one objective could be more aspirational and the other one more technical.

The cycle should last from 3 to 6 months.

A good objective should be:

• feasible in one cycle
• shared among the organization members
• inspirational and not numeric
• clearly in line with the company business
• challenging, but realistic
• under the team's control
• in the form "verb + what do you want to reach + why + the application field"

Good key results should:

• be measurable on a weekly basis
• not be binary
• not exceed the number of 3-4 per objective
• clearly show how close the goal is
• be limited to the only ones useful to reach the target
• represents 100% of the objective
• not be influenced by external actors and dependencies
• in the form "verb + what will be measured + the extension of the result [owner]"

This is an example of a good OKR:

• OBJ: Increase the employees' digital skills to sustain the ongoing digital transformation process of the company and to reduce costs by the end of June
• KR1: Write a gap-analysis document with x pages comparing the internal skills to the ones of the reference market [owner: Training]
• KR2: Reduce digital experts' turnover from x% to y% [owner: Peopleops]
• KR3: Hire x digital experts [owner: HR]
• KRn: ...

Cascading OKR

One of the most powerful aspects of the OKR framework is the ability to align each employee's effort and decision, from the front line through the most operational areas to the company strategy.

This is possible because a key result of the higher level becomes an objective of the lower level. These are called cascading OKR

Company OKRs are at the top level and Team OKRs are at the lower level.

Every company should choose the correct number of cascading levels according to their cultural and organizational patterns: some organizations use more OKR levels, others can choose to not use cascading OKRs at all.

Types of OKRs

Many organizations (e.g. Google) divide two types of OKRs: committed and aspirational. They have different purposes and they can be designed, interpreted, and acted upon in different ways.

• Committed

  These are goals that have to be reached in order to achieve the objective.

  Everyone at the organization and at the team level recognise that they must be met in full. In general, committed OKRs are to be achieved within a set time frame.

  For example, if the objective states "To become partner of a vendor" and the vendor requires at least a minimum number of certifications, the "achieve 10 certifications" is a committed OKR because it must be totally achieved.

• Aspirational

  On the other hand, aspirational OKRs reflect bigger-picture, higher-risk and more future-tilting ideas. They show how we’d like the world to look. They are sometimes called 10x goals or moonshots.

  Regarding aspirational OKRs, Larry Page said "If you set a crazy, ambitious goal and miss it, you’ll still achieve something remarkable.”

  With aspirational OKRs, there is no clear path to get there—and no real knowledge of what resources will be required.

  The expected success score of an aspirational OKR is 70%.

The relative weighting of these two types of OKRs is a cultural question.

OKR process in Agile Lab

There is no ‘one size fits all’ OKR process that works for each company. Therefore, Agile Lab adopted the framework crafting its own process and improving it cycle after cycle.

The Agile Lab/OKR Champion is in charge of the process milestones, timelines and outcomes.

This is a 10.000 foot-view of the OKR cycle timeline:

• The CTO and the CEO define the short-term strategy
• Objective(s) disclosure
• Definition of KRs (OKR weeks)
• Execution and monitoring with weekly meetings
• Review
• Retrospective

Objective(s) disclosure

One of the superpowers of the OKR framework is the alignment of all employees with the company strategy. As a matter of fact, every OKR cycle starts with the disclosure of objectives and their underlying reasons.

The OKR Champion collects employees' willingness to participate in the core parts of the process and communicates the objectives to the whole company along with the OKR weeks period. OKR weeks meetings are planned in the OKR group calendar with adequate notice.

OKR weeks

During the OKR weeks most employees can contribute to the company strategy by crafting key results in a collaborative way. The OKR weeks start with a kick-off meeting during which objectives are recalled and explained throrougly by Agile Lab CEO and CTO.

Please note that the OKR weeks timeline can be slightly different from one cycle to another, because the OKR Champion can decide to use or not cascading OKRs to keep the process as simple as possible.

Scanario 1: OKR Weeks with cascading OKRs

This is a sample timeline of a typical OKR Week with a single objective, when cascading OKRs are used:

Scenario 2: OKR Weeks without cascading OKRs

When we want to achieve more than one objective, it is often better to avoid cascading OKRs to streamline the process. In this case, everything related to team-level KRs is not explored in depth and when Company KRs are created in the first week, the OKR team starts to work on the second objective.

Basically, meetings from day 6 to 9 are replaced by a new round (repeating the timeline from day 2 to 5), except for the fact that the OKR team works on the second objective (if a second objective exists)

This is a sample timeline of a typical OKR Week, when cascading OKRs are not used and two objectives are there:

OKR Team composition

The OKR Champion is in charge of creating the OKR Team and its groups.

Even if no exact formula exists to create a proper team, still there is a pattern that can be used to have a skilled and engaged group of people working together with an homogeneous skillset in each group.

For efficiency reasons, the OKR Team consists of a limited number of people so that brainstorm meetings can take place effectively. This constraint given, members are chosen either for their role or their willingness to participate in the OKR weeks (a survey is often used for this purpose).

As a rule of thumb, this order of precedence is considered:

• people leading or working in Circles relevant to the objective
• people who express a clear willingness to participate
• people who express a not-so-clear willingness to participate
• people leading or working in Circles non-relevan to the objective

End of the OKR weeks

In any case (with or without cascading OKRs), the last meeting of the OKR week performs a feasibility check of KRs and the KR owner are asked to buy-in their KRs.

After the OKR assignment, each KR owner acts as a project manager.

For example, (s)he:

• creates a project team undertaking all tasks related to his/her OKR ensuring that the people with the right skills are involved
• identifies dependencies with external teams and plan tasks
• assigns an owner to each team OKR
• tracks the progress of all team OKRs linked to his/her company OKR
• asks the OKR Champion the needed budget
• tracks tasks progress on Holaspirit
• attends status update meeting communicating his/her OKR progress and issues with the proper level of detail

Execution and monitoring

Efficiency in the execution stage is one of the framework pillars. Therefore, after the OKR week we start tracking the progress of the OKRs projects in weekly status meetings.

These are vigorous conversations where OKR owners both explain the updates to be tracked and highlight roadblocks. That will keep everyone focused on the top-priority tasks.

During these meetings, each OKR owner gives thorough details of:

• Progress: the percentage of OKR completion
• Confidence level: to be labelled as "Healthy", "Need attention" or "Unhealthy". The owner can talk about roadblocks or issues he/she is encountering.
• Week priorities: the list of priorities he/she will be focused on in the following week to meet the objective. The goal is to inform people about the main issues that they should be aware of.
• 4 Weeks events: the list of the OKR-affecting events that could happen in the following 4 weeks. This is useful to keep the whole team on the same page.

Review and retrospective

At the end of the cycle, the OKR Champion organizes a review, and a retrospective meeting to understand what went wrong and how to improve the process.

An objective is achieved if the raw goal score is at least 70 percent. This numeric value is used to state if the object is reached in a "yes or no" fashion. A good retrospective cannot be based only on a numeric value, since it might hide a strong effort and extenuating circumstances, or weak management and procrastination of the activities till the last days of the cycle.

A useful tool the OKR Champion can use to drive the retrospective process is the scoring and assessment variations tables. Here is how an OKR can be filled in in the retrospective (in real case you'll have one row for each OKR, we report the same OKR just to show different scenarios as an example).

Columns meaning:

• OKR: the name of the OKR
• Progress: the objective value that state the percentage of completion of an OKR. If the progress is >= 70%, we succeeded in the work. Otherwise, we failed it.
• Self-assessment score: the self-evaluation score that the OKR owner gives to himself/herself and to his/her team. It is a subjective score that can summarize several aspects: the team's commitment along the cycle, how significant that team's result was to achieve the goal, etc. During the discussion in the retrospective session, this value can be confirmed or changed.
• Self-assessment comment: verbose explanation of the Self-assessment score column. "Why did we give a score of 0.9 despite the OKR failed?", "Why did we give a score of 0.5 despite the OKR succeeded?", "Was our result really relevant for the objective?", "Was the team's engagement consistent and well planned throughout the cycle?" These are some of the topics we want to clarify here.

If the OKR is achieved or not is still stated only from the progress column.

Keep in mind the only purpose of the table is to add contextual information to the final review. A 60% okr can bring more value to the company compared to a 90% okr just because the second result was set too low at the beginning of the cycle. This value brought to the company should be explicit. In this case, you'll have

How to track hours spent on OKRs

OKR is a tool that helps employees to:

• find out what are the most important results to achieve strategic company goals
• achieve these goals in an efficient way

To achieve results, each department/Circle must undertake one or more project defined in the OKR cycle, but from a financial point of view these projects are linked to the department/Circle.

For this reason:

• hours spent in OKR meetings (kick-offs, OKR weeks brainstormings, status update) must be tracked in the "YYYY Agile - GCC - OKR" issue
• hours spent by a department in OKR-related initiatives must be tracked in a proper department-specific issue

Credits

• Measure what matters [John Doerr]
• Radical Focus [Christina Wodtke]
• OKR Performance [Francesco Frugiuele, Matteo Sola]
• https://www.whatmatters.com/