Implementing OKRs

Implementing OKRs

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Implementing OKRs

In our previous posts we talked about avoiding common pitfalls and errors when adopting OKRs and how to get started with OKRs. Now, let’s see how to succeed implementing OKRs.

In this blog post we will see how to embed your strategy into your daily operation by implementing cadences, synchronization and delivery alignment.

In order for the Lean organization to work, it is essential that value flows without drama. Cadence and synchronization are two basic mechanisms to ensure value is continuously flowing in alignment with customer and business needs. We also want to make sure we are doing what we said we would be doing and we want to adapt quickly to market changes.


Cadence is the use of a regular, predictable rhythm within a process.

From basic Lean literature we know the benefits of cadence in improving flow of value:

  • Transforming unpredictable events into predictable events
  • It prevents variability from accumulating in a sequential process
  • Humans appreciate rhythms in their lives and work and the rituals within these rhythms
  • It helps improve predictability, planning and coordination

So, you must establish some basic feedback loops to make sure the plan is alive, you are learning and improving and you can quickly react to changes in the market.

If you don’t know where to start from, we suggest the following cadences.

Every feedback loop receives input and provides output to the longer-term feedback loop. This way everything is interconnected and there is a continuous flow of information, knowledge and learning.

Annual Cycle

Always taking into account the long-term vision that we have agreed for our organization, each year we will establish the main challenges and indicators of success that will bring us closer to that vision.

We have to be clear about:

  • Which are the strategic areas
  • Challenges for every strategic area
  • Indicators to see if we are going in the right direction

For this, we need the executive team or those who are responsible for deciding the direction of the company.

Here it’s up to you and your context to what extent you involve everyone else in the organization. There are pros and cons for every approach.

After agreeing on the top OKRs, together with every Division or Product we will agree on the goals for the first quarter, which include:

  • Defining a target for each indicator
  • Define key initiatives and/or experiments that will lead to achieving those goals

Identify Strategic Areas for a successful OKR Rollout

In our previous post, we provided you with some tools to help you in identifying your strategic themes.

Now, let’s imagine you are a recently created technology consulting firm and you have to define your strategic areas for 2019.

You could think of the following areas:

  • Brand awareness – You are just starting, so your main focus should be on increasing awareness of your brand
  • Team growth – You see a potential growth in business so you want to focus on team growth for the next few months
  • Revenue – As you are starting and you don’t know whether your products and services have traction you can focus on revenue initially. This is a lagging indicator, but it will provide you with some basic guidance because you have to pay invoices and keep a business running

Challenges and indicators for each area (OKRs)

Within every strategic area there will be challenges to be tackled. And, for those, we need to answer to the question: How the heck are we going to do this?

These challenges can be more or less specific and quantitative but either way make sure you define indicators to know if you are progressing and if you are getting closer to the goal.

Following up on the example, for the strategic area “Brand Awareness”, the challenges could be:

  • Customers are calling us for specific services
    • >= 5 leads calling us directly
    • 20% of new projects out of those inbound calls
  • People talk about us
    • +20,000 unique visitors to web site
    • +10,000 followers in twitter
    • Customer Viral Coefficient = 1.50 (Every customer brings 1.5 new customers)
  • We are able to attract our target audience to a public event
    • >= 50 people
    • 10% lead generation

Quarterly Cycle

At this point the management team has set strategic areas, challenges and indicators. Every quarter teams must determine targets or objectives for each indicator and what projects, experiments and activities they have to do to meet those challenges.

As we explained in our previous post talking about catchball, the decision circuit will go from management to the teams and vice versa on several occasions until everyone has a shared vision about what challenges are addressed and how to attack them.

In the quarter planning, two things must happen:

  • A review of the challenges from previous quarter integrating learnings and looking at final status of indicators
  • Targets for the next quarter and projects, experiments, activities and ideas to tackle in the next three months.

This process can take up to a week. All the information is readily available at all levels, so there is little overheard and people can focus on the learnings and objectives and/or targets for next quarter.

Monthly Cycle

On a monthly basis you can do a global review of the status of the OKRs for the quarter. This would be the equivalent to a mid-sprint review in Scrum to see how the team is progressing towards sprint goal or time out in basketball but for the whole company or division.

The idea is that everyone understands general status of indicators and initiatives, celebrate achievements and ask questions.

Weekly Cycle

This is the delivery review. Here you check the results of your experiments or project increments and this is also the shortest feedback loop to spot problems or to learn things.

We would also recommend that progress is also reviewed at executive level on a delivery cadence frequency.

Connecting Strategy with Execution

By implementing OKRs you already took the first step into eventually getting rid of annual budgeting, project mentality and unrealistic product roadmaps. In other words, getting rid of wishful thinking.

The next step is quite straightforward, anything you deliver must be linked to an OKR. You can call it Epics, User Stories, Themes, Activities, Tasks or Experiments.

This framework is flexible enough to allow product teams to include new activities in the middle of a planning cycle, as long as they are associated to an OKR.

In our next post we will see how the review process works that will allow you to integrate learnings, continuously improve and adapt to market changes.

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