Goal Setting with OKRs: Presented by Adam Asch

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Presented by Adam Asch

If you’ve ever struggled to prove your team is meeting its business goals, you won’t want to miss this session!

Join us for an insightful presentation by our esteemed guest speaker, Adam Asch, who will provide you with actionable ways to apply the Strategic OKR (Objectives and Key Results) Framework at your company. This framework, utilized by industry giants such as Google, Intel, and LinkedIn, has been instrumental in driving their unparalleled success.

In this session on Goal Setting with OKRs, you’ll learn:

What OKRs are and how they benefit companies: Understand the core principles of OKRs and discover why they are a game-changer for businesses looking to enhance focus and productivity. Adam will break down the components of effective OKRs and demonstrate how they can drive measurable progress and innovation within your organization.
How to align all levels at your company around strategic goals: Learn how to create a unified direction by cascading OKRs through every level of your organization. Adam will share techniques to ensure that every team member, from executives to frontline employees, is aligned and working towards common, impactful objectives.
Where and when to apply OKRs: Discover the best practices for implementing OKRs across various departments and projects. Adam will guide you on identifying the optimal moments to introduce OKRs and how to seamlessly integrate them into your existing workflows to maximize their effectiveness.

By harnessing the potential of Strategic OKRs, your organization can synchronize work, concentrate on the most significant aspects, and attain remarkable outcomes. This session will equip you with the knowledge and tools to transform your approach to goal setting, driving your team towards higher efficiency and success.

Don’t miss this opportunity to learn from an expert and take your company’s goal-setting practices to the next level!

Join Adam in an upcoming Certified OKR course.

Transcription

Speaker 2

(0:07) My name is Stacy Louie, I’m CEO of Hyperdrive Agile, and we’ve been doing this meetup for a very long time. (0:18) I want to say, we’re closing on 15 years, and going virtual has been great, we’ve been able to get people from all over the world, it’s been a delight. (0:27) And when we do this, we’re able to pull in some great people like Adam Ash, who is based out of Atlanta.

(0:33) We don’t always get that, when we’re in person, we’re not always able to get people in from all these corners of the world, but being able to bring in Adam is great for a lot of reasons. (0:44) Adam is an expert in OKRs, he’s spent his time working for a wide range of companies and he’s had just an incredible list of clients, including Fidelity and Kraft Hyatt and several others. (0:58) He’ll do a little bit of an introduction on his own, but just to brag a little bit about (1:01) what he’s been helping some of our clients with and helping us as a company with, is (1:08) helping develop the idea of how do you take this vision and translate this vision into (1:13) a strategy and taking that strategy right into a portfolio, a portfolio of work, which (1:20) is where our roadmaps are living, where our product roadmaps are living. (1:24) And through that, we’re able to tie that into the work that we’re planning on a daily basis, on a sprint basis and on a quarterly basis. (1:32) So we’re able to plan all this great work out.

(1:34) But the linchpin behind all this, the common language that we’re using, which has been incredibly powerful for us, are using those OKRs. (1:43) And how does OKRs drive that? (1:44) And this past week, we spent some time in Orlando speaking with a number of Fortune 500 companies.

(1:52) And a common thread that we heard from those clients was OKRs, those of them who are trying to do it, they’re either sitting on the shelf getting dusty or they can’t connect the OKRs with the real work that they’re doing. (2:07) Whatever the nuances, at the end of the day, there’s a struggle with taking these OKRs, seeing that as tied to goals and seeing those goals tied to real work. (2:18) That’s just broken in today’s corporations.

(2:20) What we’re going to learn today and what Adam’s going to help us understand is how does all that fit together? (2:25) Like, how do we take those OKRs and make them more tangible and connect our work to that and connect our goals? (2:31) So with that, I’d like to hand it over to Adam.

(2:34) Adam, Ash, welcome.

Speaker 1

(2:35) All right. (2:36) Thank you, Stacey. (2:36) I appreciate it.

(2:37) Welcome, everybody. (2:38) Let me so let me just say hello. (2:40) I’m not going to add too much to what Stacey said, other than what I’ve really been focusing on for the last bunch of years is this.

(2:48) How do we connect this strategy that we’re trying to achieve with the work and the outcome we deliver? (2:54) I come from years of product management. (2:58) I did a lot of agile transformations, all that good stuff.

(3:01) But as I encountered more challenges as we were trying to apply agility to the whole organization and do all that good stuff, one theme we came back to every time was this disconnect between what our business is trying to achieve and what everyone else is doing to help achieve that. (3:22) And it’s not because we’re trying that we’re not you know, no one’s trying to do the wrong thing. (3:27) It’s just that over time we start drifting away from from those things.

(3:32) And OKRs and our strategic goals helps bring that back in alignment and then provides that thread that goes throughout our organization. (3:40) So we’ll talk about that today. (3:42) If you have questions, we’ll have time at the end.

(3:45) If you have questions that I may forget, you could put them in the chat and then some will tell me. (3:49) But other than that, let me go through the material, I’ll show you what we’re doing.(3:53) And if you have, you know, we’ll make it as hopefully as entertaining as possible.

(3:58) All right, let me share my screen. (4:08) All right, can we see that?

Speaker 2

(4:12) Yeah, looks good. (4:14) And for for everybody who’s online, if you’ve got questions, go ahead and fire them away in the chat and we’ll we’ll pick up those questions. (4:23) And if you want to hop in, just raise your hand and we’ll definitely find a way to follow you.

Speaker 1

(4:27) Absolutely. (4:28) Let’s make it interactive as possible. (4:30) And if you have a question, just ask.

(4:31) And hopefully we’ll answer all of your questions as we go. (4:36) So what is the purpose?(4:37) So the whole part is we’re starting with three major things today.

(4:40) What are OKRs? (4:42) How do we actually align them across the organization? (4:45) And then what is that operationalization look like when we actually get that done?

(4:50) How do we operationalize those? (4:52) And I love saying opera, opera, opera. (4:54) Yeah, you know, it’s a tongue twister.

(4:57) How do we make it work easier? (4:59) Right. (5:00) So just as a just a quick review of what OKRs are, it’s objectives and key results.

(5:07) And the purpose of objectives and key results and is to really make sure we have a shared understanding throughout the organization of what we’re actually talking about, that we’re all talking about the same thing. (5:19) We share how we’re going to measure what we’re measuring.(5:21) We share our goals. (5:23) We make sure we know what the intent of what we’re trying to achieve. (5:27) And I have an example I have of this is years ago I was working in an organization and they were asking to help us align and prioritize what the most important things are to achieve our goal. (5:38) Great.

(5:39) That’s exactly what this is for. (5:40) That’s perfect. (5:41) And so I said to the person I was talking to, which happened to be someone from the product management group, I said, what is your strategic goal?

(5:48) What are you trying to achieve? (5:49) And they say it’s the next project. (5:51) They called it the next project.

(5:53) And I said, what is the next project? (5:55) And they said, well, we’re going to install and enable new e-commerce. (6:02) Hardware and software, so they bought all kinds of hybrids and Adobe software and hardware for 40 million dollars, and that’s part of what they’re going to do.

(6:10) When I spoke to someone in marketing, I said, what what’s your strategic goal? (6:15) It’s the next project. (6:16) They said, what is the next project?

(6:17) And they said one another thing. (6:19) And then I asked someone in the project management group, what is your what is your goal? (6:24) It’s the next project.

(6:25) What is it? (6:25) And it was something else. (6:27) So even though they all had aligned with this idea of this next project, no one really was thinking that it was the same thing.

(6:36) They were all saying it was something else. (6:38) It took me three months to get everyone to agree and and leadership to agree that what the goal was, was to end to double the number of a particular tier of user in three years. (6:55) That’s what the next project was meant to do.

(6:58) But when everyone heard somehow between that outcome that we’re trying to achieve and the next project name, everyone interpreted it differently. (7:09) And so we weren’t aligned, we weren’t sharing the understanding, we weren’t saying the same thing because each of those things didn’t actually help us achieve that goal. (7:18) And I’ll talk about that more as we go through and explain how what we did with OKRs made them align to the right place.

(7:25) But also they found some pretty interesting, surprising outcomes that they weren’t expecting because of it. (7:31) So we’ll talk about that, too. (7:33) So number one, shared understanding, right?

(7:36) Strategy and execution is not always great in organizations. (7:39) So we focus a lot on how we’re going to do things, but not aligning with the strategy and the product or the services or the outcomes that we’re trying to achieve. (7:54) And so if you ask someone at the top, yes, we have a strategy.

(7:58) And then from there, it kind of fizzles away. (8:01) We really don’t know what it is and we don’t know if what we’re doing is actually aligned with that. (8:09) Similar situations, right?

(8:10) We have this all of the time. (8:12) I wish we spent more time collaborating. (8:15) We’re just not moving fast enough.

(8:17) Our strategic planning is painful. (8:19) I wish our funding model was an enabler. (8:21) You know, all this stuff.

(8:22) And I’m sure all of us have similar situations that we’ve been in, but they all come from the fact that we have to think of our organization having one big pot of capability and capacity and we all have to share it. (8:36) And what we really do, what we do in reality is we say, OK, each of our parts of the organization will define what they need to do to achieve their goal this year. (8:47) And then we’ll define what we’re going to do and then we’re going to fight for those resources when we realize that everyone is asking for a lot and we don’t have enough to go around.

(8:57) And so what happens is that we wind up with these misalignments, right? (9:01) It’s the old way of doing things. (9:02) We have these really overly detailed multi-year plans with very detailed expectations of outcomes.

(9:09) We structure things, usually in Waterfall, but it doesn’t have to be. (9:13) It could be in any methodology. (9:16) And that’s the other thing about OKRs is they’re not, they don’t push out a delivery or build methodology.

(9:24) So whether we’re using Waterfall or SAFE or Agile or Scrum or Kanban, whatever we’re doing, it’s OK. (9:30) OKRs are actually a supplement that they’re helping to align those things so we can actually get better outcomes, right? (9:38) Usually we’re planning for months and months and months.

(9:41) We have to have a lot of predictability and stability to make that happen. (9:46) And of course, as always, nothing should change, right? (9:50) Because once we plan, nothing should happen after that.

(9:55) So objectives and key results help us put that together. (9:59) And just like agility and a lot of the other things we’ve been doing for a long time have been around longer than we typically believe or think, OKRs have been around for a while. (10:09) Andy Grove helped develop them.

(10:11) Then we have the John Doerr, the book, I know that Stacey has the book behind him. (10:15) So there’s lots of stuff that that was done over the years to say, how do we find, figure out what we’re aligning to and then how do we measure that? (10:24) And that’s the second most important thing, because stating your objectives and your goals is one thing.

(10:31) But how we’re going to measure those things becomes the challenge because there are two kinds of metrics and we’re going to talk about them and they’re very different. (10:39) And that’s what bogs us up all of the time. (10:41) So we’ll get to that, too.

(10:43) But you can see that this is not super, super new. (10:45) It’s just that we’re bringing it in.(10:50) Objectives are generally what we need to achieve together.

(10:53) It’s not like a secret society that you have to be in. (10:57) It’s conceptually simple. (10:59) We want to state what we’re trying to achieve.

(11:03) And usually what we’re stating is we want to see some outcome. (11:07) This is not a metric that we’re going to measure so much as that we’re going to say we want to see double our client base, increase the number of customers we have, decrease the time it takes to respond to customers’ needs, raise our revenue by 20 percent in the next three years, decrease the cost of delivery. (11:29) That’s kind of how we look at objectives.

(11:31) So it’s kind of those bigger picture things, especially as we are at the very top, we might say organizationally. (11:38) Hey, we want to increase our revenue by 30 percent in five years.(11:43) We want to actually enter into a new market.

(11:47) So those are big things that organizationally want to talk about. (11:51) We have to talk about, great, those are objectives, but how are we going to achieve them? (11:56) We want them to be short and sweet.

(11:58) We don’t want anything to be too long. (12:00) So if you have to, if it takes more than one breath to say it, it’s too long. (12:05) Right, it doesn’t have to be because we’re going to get into detail later, and so we’ll talk about what it really means.

(12:10) So objectives, good objectives, powerful objectives are aspirational. (12:16) That means that we can achieve them, but it gives us a little bit of a push, right? (12:20) If we think we can achieve a 15 percent growth this year, maybe we’ll say, look, let’s try for 18 percent growth and we’ll do that.

(12:28) But the difference between, and we’ll talk about this just a little bit. (12:34) Most organizations have visions and they say we want to be the best whatever in the world, or we want to be like Tesla says, we want to provide the the world with renewable energy. (12:48) Right.

(12:48) That’s aspirational. (12:49) It’s probably something they might be able to achieve in time.(12:52) But the difference between a vision, which is inspirational, we want to be the best in the world.

(12:58) We want to have to see the best things we want to be. (13:01) That’s something that make us proud to be where we are and gives us some purpose in our world. (13:05) But it may not be achievable directly to that.

(13:08) Right. (13:08) The best in the world isn’t necessarily measurable, but aspirationally we can actually say we want to double, increase the number of people or double the number of people we have or increase our revenue or decrease the cost. (13:20) Those are things that we can do.

(13:22) We can attain them. (13:24) They’re clear, they’re time bound. (13:26) We talk about what different horizons of objectives, organizational at the long term and then even team objectives at the shortest term.

(13:35) But the most important thing with all of these objectives is, do they align with what we’re trying to achieve? (13:43) Does it kind of give us a little bit of inspiration when we’re trying to do it?(13:48) Is it clear to what we’re trying to do?

(13:50) And most importantly, objectives are actionable. (13:54) So a vision might be inspirational, but it’s not directly actionable. (14:00) But these things are. (14:01) So these are going to direct us to exactly what we need to do. (14:06) The other half of our objective is our key result. (14:09) So it’s how are we going to measure it?

(14:11) Right. (14:11) So there are different kinds of things we have to measure. (14:15) And so the types of key results we see are leading indicators.

(14:19) Right. (14:20) And those are things like we are going to deliver a new website so we can measure that. (14:25) We’ve delivered it. (14:26) We can say that’s something we’ve defined and delivered. (14:29) It’s easy. (14:29) Right.

(14:30) We delivered this new capability. (14:32) We delivered this new service. (14:34) We built this, enhanced this old feature.

(14:38) Whatever those things are, they’re ultimately things that we could measure. (14:41) So those are pretty good. (14:44) Those tell us what we produced. (14:46) Right. (14:46) They tell us here we’ve built this and done that and delivered it. (14:49) Here’s the problem with that type of metric.

(14:53) It’s the same kind of metric as how many things did we deliver? (14:57) How much money did we spend? (14:58) How many hours did we work? (15:01) All of those are metrics that tell us what we write their outputs, but they don’t tell us or even if we’ve delivered, it’s an outcome, but it’s not directly related to the business value. (15:12) Right. (15:13) That’s the intermediary thing.

(15:14) Right. (15:15) We do this to achieve that. (15:16) So we have this objective.

(15:18) We have this key result. (15:19) This result tells us how to what outcome we’re going to measure. (15:23) And then the lagging indicator, which is the most important thing that we always forget.

(15:28) And that’s going to be something I talk about a lot is the impact metric. (15:33) We built this for the purpose of achieving this objective. (15:38) And so did we achieve that actual outcome?

(15:42) So if I said I’m building this particular new feature or function because I believe it’s going to increase the number of people that use this product, then that lagging indicator I won’t see until later. (15:53) Right. (15:54) So you have to be careful about the fact that we get credit for delivering the thing we built to achieve that goal.

(16:02) But then we also have to as product managers. (16:05) Right. (16:06) And as people are responsible for delivering value, the value is really that lagging indicator.

(16:11) Did what we build do what we said it was going to do? (16:14) So there’s the delivery goal.(16:15) Did we deliver it?

(16:16) And there’s the business goal. (16:18) Did it give us that push that we wanted? (16:20) And then the last kind of key result is kind of a balancing indicator. (16:25) It’s basically saying if we are going to increase the number of servers we have, but we so we can’t but we’re not going to increase the price or we’re going to we’re going to code against SQL injection. (16:40) But we can’t lose time or the the change we make can’t reduce the time of the transaction, whatever those things are. (16:48) So those actually just tell us give us some guidelines around those things.

(16:52) Makes sense. (16:53) So what is a key result is deliver this thing. (16:57) Another key result is we increased by this much.

(17:00) And another one is when we do this, this can’t happen. (17:03) Right. (17:04) And it’s just directly measurable.

(17:08) And the trick for value metrics is measure the value that you’re trying to achieve. (17:14) So when we tend to measure how many people and how many hours and how much money, those don’t tell us what we really want to know is, did we achieve the actual goal? (17:23) So if I want to increase business, that’s what I have to measure.

(17:26) If I want to decrease the amount of hours that a customer support person is live on the phone with somebody, then that’s something I can measure the number of hours reduced because that gives me something tangible. (17:39) Makes sense. (17:41) All right.

(17:42) Yell if I don’t make sense. (17:43) That’s all good. (17:45) So ultimately, what we’re talking about is outcome, impact and output. (17:50) Right. (17:50) So outputs don’t actually have business value. (17:54) Right.

(17:54) It’s just stuff we deliver. (17:55) That’s OK. (17:56) We need to do things right to be able to do our work and build the things we’re building and test them and deliver them and meet about them.

(18:03) There’s lots of stuff we have to do to, you know, to actually get the work done. (18:09) That’s fine. (18:09) So we’re going to have those things.

(18:11) So for this objective, we’re going to improve our digital properties to provide industry leading customer experience. (18:17) That’s a little bit of a push, but, you know, industry leading.(18:20) That’s nice.

(18:21) It’s aspirational. (18:22) It’s good. (18:22) So let’s let’s talk about.

(18:24) So what are we trying to measure? (18:26) Well, we want to increase our net promoter score from six to nine. (18:30) So we’re going to measure that. (18:31) Right. (18:31) We’re going to measure our net promoter score. (18:33) We’re going to have a repurchase rate of our stock from a repurchase rate of customers buying our products from 10 percent to 50 percent.

(18:42) So we’ll increase our repeat customers. (18:44) We’ll lower customer acquisition costs to under 10 months. (18:47) So you get the idea. (18:48) Those are things we can measure. (18:50) The out the outputs, the things we’re doing or the outcomes that we’re doing basically are saying, hey, we’ve launched this thing. (18:56) We’ve redesigned that.

(18:57) We’re analyzing existing UX. (18:58) We’re developing new customer engagements. (19:01) But we’re basically saying, again, there’s no value in the outputs.

(19:05) There’s potential value of the outcomes. (19:07) Right. (19:08) It’s an output until it’s an outcome that we can say, OK, we believe this is a thing. (19:11) But now once we’ve delivered it, we can see that it’s done something. (19:16) So we just want to make sure that when we’re measuring something, we’re talking about the right thing better. (19:28) So now that we have.

Speaker 3

(19:30) No, no, no, no, no. (19:30) I want you to go back and I want to know the answer on the right hand side.

Speaker 1

(19:35) All right. (19:36) So is this are these outcomes, outputs or impact? (19:39) So increase sales by two percent.

Speaker 3

(19:41) Well, that one I’m struggling with a little bit because I view it as kind of it’s it’s an outcome you want, but it’s more on the business impact side for me.

Speaker 1

(19:49) Right. (19:49) So it would be an impact because we measure it. (19:52) So it’s if we’ve delivered something to increase sales, right.

(19:56) A new campaign. (19:58) That’s our outcome. (19:59) Right.

(20:00) The work we did to achieve that goal was our output. (20:04) Delivery was the outcome.(20:05) And the impact is this increased sales by two percent. (20:08) OK.

Speaker 3

(20:09) OK, fine. (20:09) I can do that. (20:11) OK, thank you.

Speaker 1

(20:12) And it’s semantics. (20:13) There’s a lot of semantics of this. (20:14) Right.

Speaker 3

(20:15) So it’s so hard. (20:16) I mean, I went through this with with hundreds and hundreds of people. (20:20) And I ended up with some pretty simple things, just like get some numbers for round one was really hard, you know?

Speaker 1

(20:25) Yes. (20:26) But you wanted simplicity is the key because the more you want to actually be able to measure all of this. (20:33) So part of the one of the challenges we often have is how much stuff we’re doing at one time, because if we’re going to measure better, we have to reduce the amount of stuff we’re doing that’s not actually related to what we’re trying to achieve.

Speaker 3

(20:45) Ah, yeah. (20:46) Good luck.

Speaker 1

(20:48) Yeah. (20:49) And so one of the things that the most important thing about all of what we’re talking about today is the ability to say not now to someone, because if we’re aligned with the goal and we understand what and our OKR is clear and it’s aligned to the things we’re trying to achieve, then if someone wants to add something that isn’t. (21:11) Aligned with those things, it doesn’t track, then we have to say not now.

(21:15) It doesn’t mean never. (21:16) It means not now and saying no, not now or we’re going to stop doing that because it’s not valuable. (21:21) Those are the hardest things we do in any organization.

(21:26) We actually waste more continuing to do things that are no longer aligned with our outcomes than we do doing new things, right?

Speaker 3

(21:35) I would I’m going to add a small little caveat, right? (21:38) You need to keep you need to keep the lights on. (21:41) So there’s always that kind of.

Speaker 1

(21:43) OK, let me tell you, I’m going to go to the next part. (21:47) I’m talking about including things that keep the lights on. (21:53) And new things, right, so you have to those you only have one set of capability and capacity, so I’m basically saying all of the work you do has to have, let’s say, 20 percent of our of our capacity is for keeping the lights on.

(22:08) 20 percent is for enhancing current features and functionality, and maybe another certain percent is for new things or innovation. (22:17) But that’s the idea here, that this helps us to find those. (22:20) So this doesn’t supersede keep the lights on.

(22:23) This is keep the lights on and let’s do this. (22:28) So that’s a great point. (22:29) I like that.

(22:32) So when we want to align to these things, I made some prettier charts. (22:37) At the top of the organization, we’ve defined our mission and vision and values. (22:42) So we basically say and then we start here.

(22:43) OK, so what are these organizational things? (22:47) And those are the things I talked about a little while ago. (22:50) We organizationally want to increase our revenue by 20 percent in three years.

(22:55) We want to be the number one provider of electrical devices, electrical services, electric or power energy services over the next year. (23:06) We want to provide the best whatever. (23:08) So we mark that down.

(23:10) We said, OK, here’s how we want to go. (23:11) And we think about it as how is this going to affect our stakeholders? (23:15) So what are these objectives that align to our stakeholder outcomes or customers?

(23:21) What do we have? (23:22) What of these might align with our financial? (23:25) What what processes internally might we have to fix? (23:29) And then what about our people capability and capacity? (23:32) So we look at those things and say our objectives for stakeholders. (23:34) We want to increase the the number of for customers.

(23:39) We want to increase the number of customers we have for financial. (23:42) We want to increase our revenue here and we want to decrease the cost of delivery there for processes.(23:48) We want to get more efficient at delivering our product.

(23:52) So we wanted to have less waste in our system. (23:54) And for people, we want to make sure that we’re always training people to be with the latest skills, how to do OK, ours, how to do whatever skills we have. (24:03) So those are the big things we think, OK, this is what we want to do at the top.

(24:07) Increase people’s people skills, get more efficient and process to less waste. (24:14) Increase revenue and reduce costs and then increase our customer base. (24:19) So those are a big organizational thing.

(24:23) Now, we actually have to do that. (24:24) So I like to think of these things as let’s say that we have this at the beginning of the year, our organization is now setting our three to five year goals, and that’s what those tier one organizational goals. (24:38) Next, we’re going to basically say, next, we’re going to basically say, what is our yearly plan?

(24:47) Right. (24:48) Because now that we have this three year plan, we want to say, what what are we going to do this year? (24:52) So now we bring it down a level and we say, OK, what are we going to actually say?

(24:56) What is what is technology think they need to do this year? (24:59) What is product management think they need to do this year to align with those goals? (25:03) But again, the difference is that we’re not once we have this this alignment, once we have this understanding of our strategy and OKRs at the top, what we’re doing at this next level is saying, how do we help achieve that that objective out of those key results?

(25:21) So what does technology, what do we think they might need to do or want to do to help increase the number of users or help the finances make their process better? (25:31) And they’ll say those things. (25:32) They’ll say, here are some initiatives and here are the objectives.

(25:36) Here are some product management things. (25:37) Here are some marketing things.(25:39) And so what we’re basically saying is those are always aligned. (25:42) So we say we’re doing this to achieve that goal, to achieve this thing. (25:46) Now, this at the same level, we have this yearly goal. (25:50) What are we going to do?

(25:51) Most of us, not everybody, but tend to do quarterly planning. (25:55) So what we’ll do is we’ll actually say, hey, now that we want to do the year, we break it up by quarter. (26:01) And now each of the.

(26:04) Quarters has something that’s aligned with our yearly goal, that’s aligned with our right, our three to five year look, and those are all with OKRs, they’re all measuring and I’ll go into more detail, but you’ll see the bottom thing says teams. (26:17) And what what I’m saying here is that you can use OKRs for teams, a team can have an objective. (26:23) So if you think about it, the team might have an objective for the quarter.

(26:27) They say this is what we’re going to build and deliver. (26:29) Here’s our quality, the amount, the quality level we want to keep, the defect rate. (26:34) Here is the throughput level and rate that we want to keep.

(26:37) And each team would have their own OKRs based on that. (26:40) What I don’t like to see and I’m going to repeat it a lot because it helps. (26:45) Some people use OKRs and for personal objectives and they make those actually part of your organizational objectives.

(26:53) I don’t have a personal problem with that exactly, except I think that OKRs, you can have personal OKRs with your manager. (27:00) I don’t think they should be directly related to the organizational OKRs because at your team level, it’s more about a performance where at your organizational level, tier one and tier two, it’s actually about business impact and outcomes.(27:14) So we’re measuring different things.

(27:17) Those two are measuring how well is our business delivering what they need to deliver and aligning with the outcomes we’re trying to achieve. (27:24) At the team level, we’re really saying how well are we performing? (27:27) How well do we do our jobs?

(27:28) So we’re measuring different things. (27:30) We’re not, for example, I was at Accenture many years ago. (27:36) I was stationed mostly in Asia and I worked in the Philippines a lot and I was working in the Philippines and I was helping them do a lot of this kind of work and they said, OK, our developers bonus is based on whether the business impact is achieved.

(27:55) And I said, well, did the developers have anything to do with setting the objective? (28:00) No. (28:00) Do they have anything to do with choosing the objective?

(28:05) No. (28:06) So I said, you can’t have people that aren’t responsible for the thing or accountable for the thing being judged by the thing. (28:14) So they can be rated on how well they cope, how well they are consistently keep their quality, how well they maintain what they do.

(28:24) You can’t measure their performance on how much money we made from that tool. (28:30) That’s a product manager’s review. (28:34) So that’s just the idea.

(28:35) Make sure that we’re talking about the right measurement at the right level.

Speaker 2

(28:40) Hey, Adam, that’s really helpful. (28:42) There is some chat going on and there might have been an understanding that you might have said something about OKRs being at individual level and maybe it was a nuance, but did you mean goals or help us out with that?

Speaker 1

(28:57) Yeah. (28:58) So basically what I’m saying is for your own performance objective. (29:04) Like this year, when you’re working with your manager, let’s say you’re trying to get you would like a promotion and you say, what do I need to do to be promoted?

(29:12) And your manager says these things. (29:14) Those could be your personal goals. (29:16) Right.

(29:16) So you could say my objective is to get promoted. (29:20) And here are the things that I need to achieve the key results to be promoted. (29:25) That’s perfectly fine.

(29:27) What I’m saying is I don’t want those your personal objectives aligned with the performance of the business objectives.

Speaker 2

(29:35) Got it. (29:36) So if you so the idea is if you were setting up your own personal goals, go ahead and develop that using an OKR framework, it’s totally good, but that’s wholly independent of anything that has to do with the organization. (29:49) The organization is primary.

(29:50) Set those up. (29:52) And the lowest you really want to go on OKRs is at the team level.(29:55) That’s right.

(29:56) Serving the company. (29:57) And if you have your own personal thing, you can do that off the side and do that independently.

Speaker 1

(30:01) That’s exactly right. (30:02) And that and we see organizations that do individual objectives, OKRs and include that. (30:09) I just don’t think that that works.

(30:10) It just I haven’t seen that be successful. (30:12) And it turns it makes people actually incented to do the wrong thing. (30:17) So it’s it really balances. (30:19) They’re two different things. (30:19) Right. (30:20) And that’s why we separate them.

(30:22) And I’ll talk about it a little more. (30:23) We talk about the cadence and how we plan it.(30:26) What is good about. (30:26) Great. (30:27) Right. (30:27) Thank you.

Speaker 2

(30:29) Oh, go ahead. (30:30) Yeah. (30:31) Thank you for the clarification, because I think this really helps out the conversation.

(30:34) And certainly Matthew was was chatting about it and Bob and. (30:39) Oh, sure.

Speaker 1

(30:39) Thank you for pointing it out. (30:41) That helps. (30:41) And like I said, sometimes I say something that doesn’t make sense.

(30:44) You’ve got to tell me. (30:45) Ask my wife. (30:46) She says everything I say doesn’t make sense.

(30:49) All right. (30:49) So the characteristics of good alignment are it’s this is what the outcomes are of if we do this right. (30:55) We have a strategy focused organization because we all know what it is and it’s communicated across the organization.

(31:02) I want to ask people at any time, in any place, if I go in this like my special (31:07) dream, right, I said that anyone in your organization should know exactly at any (31:12) time what we’re currently trying to achieve from an organization level and what (31:17) we’re trying to achieve from my personal, like my if I’m a developer or a product (31:22) manager or whatever, what we’re trying to achieve, everyone should know because (31:26) anyone can have a good idea, first of all, and that happens all of the time.

(31:30) But the second thing that happens is besides that, you know, it’s that we we have less confusion. (31:36) We all are talking about and walking towards the same goal. (31:40) And so when we have conversations, we can actually in in a very collegial sense, right, say, hey, does that thing really align with this?

(31:50) Maybe not. (31:50) Maybe either we could tweak it to align better or maybe it goes into another place. (31:54) We we said we’re going to do this objective later in the year.

(31:56) That’s that thing. (31:57) So it really helps people have better, more informed conversations. (32:02) It has to be done cross-functionally.

(32:04) And that’s what the difference is. (32:06) What we’re talking about, the other ways of planning is that the strategy can be done, let’s say, by the board or executive team. (32:14) That’s the organizational level.

(32:15) Right. (32:15) They can do that by themselves. (32:18) However, when we do this yearly strategy and we take that long term strategy and make it into a yearly strategy, create our yearly OKRs and then break those down into quarterly OKRs, those need to be done with the people and groups across the organization.

(32:34) So everyone is involved. (32:36) So when we do this workshop and I’ll give you an example of the one where we did that, they bought that forty million dollars worth of stuff. (32:44) We had people from product, project, technology, not so architecture, security, DevOps.

(32:53) We had legal, we had HR, we had marketing, we had sales. (32:56) We had everyone represented in the space because we want to make sure everyone’s aligned with the same thing as we learned before. (33:04) They all thought it was something else because they were going in different directions, even though we were using the same words, we had different meanings.

(33:12) So that’s number one. (33:13) And if I have my way, and I often do, but not always, I want someone who is actually a person who can make decisions, a person who’s a manager and a person who actually does the work representing their group, their team or their group in these planning events. (33:35) And the reason is, and you can imagine if I don’t tell you.

(33:39) When I ask an executive what that person does every day, they don’t really know and they shouldn’t. (33:44) They don’t have to know. (33:45) When I ask a manager what they’re incented to do, they say to drive as much work through the system, not deliver value and quality, right?

(33:55) And the person that’s doing the work is just saying, I’ve just piled on, right? (34:00) And so I want those three perspectives because they each have to take into account the other perspective. (34:06) So we actually have a better system.

(34:09) So in other words, the person at the top understands the manager’s challenge, which is they’re being incented to deliver output instead of impact. (34:19) So we have to change that.(34:21) We have to make sure that everyone’s talking.

(34:22) You never know where people might say, oh, we were building something like that last year, but we put it on the shelf and now we can bring it back to do your thing. (34:30) All kinds of amazing things happen when you bring people together and help do this alignment, which is really, I think, interesting, but also helps a lot. (34:40) Make sense?

(34:43) And the reason that this is important is, and I always tell true stories, even though they may sound crazy, but I once walked into the vice president of delivery, his office, and I said, listen, your backlog, your stuff is really old. (35:00) I don’t think it’s aligned with your current objectives anymore. (35:04) And frankly, I’m not sure we even know where these things came from.

(35:08) And he looked at me and said, Adam, and before he said to get out of my office, he said, Adam, my bonus comes from how much I deliver, not whether it works or not. (35:19) Get him out of my office. (35:21) And he wasn’t being mean.

(35:23) He wasn’t a jerk. (35:24) He was being truthful. (35:27) I am not being incented to do the right thing.

(35:31) And so this is where we have to make sure we’re incented to do the right thing. (35:35) It saves a lot of time and money, too. (35:41) So again, bring it down.

(35:44) There’s tier one OKRs. (35:45) What is our mission and vision? (35:47) Those are the things we want to do when we measure how well we’re doing.

(35:50) How do we actually then bring that down to our tier two OKRs? (35:54) This is what we’re going to do for the year. (35:56) This is how we’re going to execute against our strategy, right?

(35:59) And then tier three is actually how we’re going to contribute and perform against that.(36:05) That’s right. (36:06) Elevate all bonuses.

(36:07) Well, or bonus with the right outcome. (36:10) Like, look, if you deliver more value, then there’s great. (36:15) But you’re right.

(36:16) It’s one or the other. (36:18) So what we ultimately have when we’re done with this, right?(36:21) We find our OKRs at the top.

(36:24) Those are the ones, those are our long-term goals that say we want to be the best in the world. (36:28) We have our tier two goals. (36:30) We say, OK, this is my strategic HR thing, sales things, technology things.

(36:34) The reason we do them together is because HR things will involve people from other parts of the organization. (36:40) Technology things involve people from other parts of the organization.(36:43) We have one, again, one bucket of capability and capacity.

(36:47) So we need to join forces together to work towards those goals. (36:51) When we get to this tier two, when we start to talk about yearly and quarterly outcomes, OKRs, what we’re going to do, that’s when we can start saying, here’s what, right, here’s the impact that we’re trying to achieve here. (37:05) Here’s the impact we’re trying to achieve here.

(37:10) But you can see that no matter what I’m doing, my team’s objective rolls up to an HR objective, which rolls up to an organizational objective. (37:18) So you can see it goes, and that’s what I’m trying to say, that any time you go to someone and say, what are you doing? (37:23) They can tell you, I’m doing this to achieve this goal, which goes to this objective, which goes to this key result, which goes to this.

(37:32) It’s pretty good when you can eliminate the work that isn’t necessary to do to achieve the goal. (37:42) And I think the number one thing I see more than anything else is, and this is now me being in technology for 20 years, 50 to 80% of the work we do is not aligned with the goal we’re trying to achieve most of the time. (38:01) And I’m being kind, because it’s probably higher in a lot of places.

(38:04) But I can say off the bat, immediately, almost half the things in any organization are not directly aligned with the goal we’re trying to achieve. (38:15) And that’s a problem, because we tend to then bring in more people, right, and instead of reducing the amount of work. (38:25) So we spend more money, but we’re not getting more value out of it, because we’re wasting money on this side.

(38:32) So how do we make this work? (38:34) How do we operationalize all this in the organization? (38:37) No, it hasn’t changed.

(38:39) You’re exactly right. (38:40) So that’s the thing about it. (38:43) It changes it locally when we get involved to do it, but globally, it’s really tough.

(38:49) But it’s changing now more because the AI disruption, whatever that turns out to be, has given people more focus on the value they deliver and what’s really important. (39:00) And so this is an opportunity for us to actually help do that. (39:04) And again, I don’t believe AI is going to be the big—it’s big. (39:08) I love it. (39:08) I’m not going to complain. (39:09) But we don’t know what it’s really going to do yet.

(39:11) And so we’re kind of still before the storm, right? (39:14) Same thing with virtual reality.(39:17) Same thing with the cloud.

(39:19) Same thing with the metaverse. (39:20) Same thing with all the things we’ve talked about in the last five to ten years. (39:24) It’s important, and we’re going to figure out how to make it work.

(39:27) But for example, I worked with a large company. (39:30) They were moving from data centers to the cloud. (39:33) I’m talking big companies.

(39:34) So they spent $300 million to move from data centers to the cloud. (39:39) Guess what?(39:39) They didn’t have the first thought about why they were moving from data centers to the cloud, what benefit they were going to get out of it, other than they said, we want to close the data center.

(39:49) But beyond that, there was no—they didn’t understand. (39:52) So when they planned for the moving of applications and capability from the data center to the cloud, they’re like, we’re just going to move this to there. (39:59) But why?

(40:00) You have new capabilities now. (40:02) You have new—you could do new things. (40:03) You have new stuff, new features and functionality.

(40:06) You can actually eliminate half of the things and not even move them because you don’t use them anymore. (40:10) All that stuff is really important. (40:13) And if you’re not aligned like this, they didn’t have that alignment from the top.

(40:17) Everything after that went off track. (40:20) So this really has effects on everything we do.(40:25) This is exactly what I was talking about before.

(40:27) So just at a high level saying, what are we trying to achieve? (40:31) So there’s long-term business objectives. (40:33) Those are the highest level OKRs.

(40:35) Our yearly objectives focused on the portfolio and our products and services, how we’re going to align them with our longer-term objectives, our quarterly objectives of what we’re going to build and deliver at any given time. (40:47) Our team objectives are focused on the team’s contributions. (40:50) So if the team is focused on the quarterly, that’s focused on the yearly, that’s focused on the long-term.

(40:56) And these individual ones, again, those personally between you and your manager, great.(41:02) I wouldn’t link them to those other areas directly. (41:07) You have this OKR cycle where you want to establish this organizational context.

(41:12) This is where the senior leaders establish this, hey, here’s our goals, here’s our strategy, here’s our vision. (41:19) Then we co-create these localized OKRs. (41:22) So that’s that next level.

(41:23) Now we bring everyone together. (41:25) Then we develop action plans, our backlogs and action plan. (41:28) Now we get into more quarterly.

(41:31) And then we have this cadence, monthly cadence, quarterly cadence, and it looks something like this. (41:37) So we have this annual review. (41:39) We deep dive into the multilevel strategy.

(41:41) So do we have to recreate it, extend it, change it, update it? (41:45) So that’s where we’re going to say here our organizational OKRs. (41:49) We’re going to then have quarterly meetings to actually review our progress.

(41:54) Because remember, our end of quarter delivery meetings, let’s say, we’re going to measure, did we accomplish our goal? (42:02) Did we deliver the things we want to deliver? (42:04) Our quarterly review meetings are going to say, what was the impact from the last batch of stuff we delivered?

(42:12) The sooner you can measure impact, the sooner you can make adjustments to your backlog and get work out the door that’s aligned with your thing.

(42:22) Because you have to know, if we wanted this particular feature or function to increase the users of this particular thing, we won’t know until later. (42:32) But once we do, we have to do something about it, address it in some way.

(42:37) Then we have these monthly progress reports. (42:40) We just say, hey, how are these things doing? (42:41) And again, our team check-ins.
(42:43) Our team check-ins can be part of our regular, if we’re doing Agile and Agile cadence, they could be a part of a regularly scheduled meeting. (42:52) But what we’re talking about here in these meetings are our objectives and our key results and how well we’re aligned with them and if we have to adjust to that.

(43:03) I don’t typically create separate meetings for all of these things.

(43:08) Almost every organization already has a quarterly review cadence. (43:12) Sometime a monthly report. (43:14) They’re already planning their yearly review and stuff.

(43:17) So we’re just going to use these methods to do those things. (43:20) We don’t have to throw everything out and change it. (43:24) We’re just going to use OKRs now to do our planning.

(43:26) We’re going to use those metrics to measure our things. (43:30) We’re going to differentiate between outcomes, things we’ve delivered and we get credit for, and impact. (43:37) Hey, it made this business goal change.

(43:44) Ultimately, and excuse me, I’m going to cough. (43:48) Thank you. (43:50) What we’re doing to operate the outcome of this is we have an organization that can do these things.

(43:56) We can use these OKRs in product management and in feature management to go wide or go narrow. (44:04) It depends on where we want to go. (44:05) Are we measuring very small things or big things?

(44:08) We want to make sure we have managing our data. (44:11) We want to know where that is.(44:12) It’s imperative that to have a good OKR strategy, we have to be able to collect the data of the things we’re going to measure.

(44:19) The thing I like about this is we’re not looking for strange formulas or esoteric metrics.(44:25) It’s did we increase the number of users? (44:27) Did we decrease the cost?

(44:29) I mean, we’re not because those are the things that really tell us if something’s working or not. (44:34) We’ll have this planning and refresh cycle. (44:37) And again, if you’re doing scrum, if you’re doing safe, more safe more than anything else, this cadence aligns very well with all of your ceremonies, right?

(44:47) Your planning, your PI planning, all that. (44:50) Again, it’s not meant to supplant something. (44:53) It’s meant to augment what we’re doing.

(44:55) Again, giving us these shared OKRs, understanding how we track our people performance, as well as our business performance. (45:03) And then ultimately, focusing everybody on always asking, is what I’m about to do going to help me achieve my goal? (45:12) And so from there, thank you.

(45:15) So just so you know, if you would like to, and I think this is great, we have this great assessment you could take, how well you’re doing your OKRs, what you might need to do next in your org. (45:27) So I think this is as a follow up to what we’ve done, that really helps start a good conversation about that. (45:35) Also, just so you know, we have other free sessions and other OKR workshops that I actually teach.

(45:42) So there’s some information about that here, too. (45:45) I’m going to send out all of this to everybody or make it available. (45:48) We’ll figure that out so you can all have access to the important stuff.

(45:53) And I know we have a few minutes, so questions. (45:55) Thank you. (54:48) Thank you.

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