OKRs and SAFe Agile

“Growth is never by mere chance; it is the result of forces working together.”

- James Cash Penney, founder of JC Penney

From a farm outside of Hamilton, Missouri to the wealth of Park Avenue, New York, John Penney took a single store in his home state and made it into a multi-million dollar enterprise known throughout the US.

Formerly one of the country’s largest department stores, JC Penney epitomized the very essence of Agile when, in November 2011, CEO Ron Johnson took over and rapidly changed the way the company priced, sold, and went to market. Hopes were high in 2012, with stocks rising 24% at the unveiling of the grand new vision, but by the end of that same year, sales had dropped 32%. It was later referred to as “the worst quarter in retail history”.

But, what went wrong?

Johnson was quick in his alteration of their go-to-market strategy, made fast changes unfettered by process, and sought customer feedback from the large consumer base to decide whether something worked or not. So far, so good. But where Johnson, and JC Penney, fell short was in identifying the right things to change and then scaling them in a way that engaged customers and employees. Instead, the company went against the grain in radicalizing how they priced, alienating lifelong customers, and ignoring crucial customer feedback. They cost themselves employee morale as failed initiatives drove down the company’s value and reputation.

According to the Harvard Business Review, it was not Agile at fault, but a lack of understanding around the “catalyst for transformation, the organization’s underlying quest, and the leadership capabilities needed to see it through.

At the time of this article being published, JC Penney is under new ownership, with a new CEO and big plans to grow.

 

What are OKRs?

 

For those who already know about OKRs, scroll down to see how they fit seamlessly into SAFe Agile.

For those who don’t, Objectives and Key Results, or OKRs, is a goal-setting methodology for organizations to set ambitious goals with measurable results. The Objective is the thing you set out to do, and Key Results are the way you measure the outcome of your actions to attain the Objective.

For a more in-depth explanation, we’ve put together this free guide to show you how they work.

 

What is SAFe Agile?

 

SAFe, also known as Scaled Agile Framework, is one of many versions of the Agile project management approach. Agile is an iterative set of techniques that utilize fast and light continuous delivery to deploy a given value stream and prioritizes small, incremental releases over long, planned launches. Where SAFe differs from the standard Agile approach, is that it centers around enterprise delivery and accommodates a larger number of teams with a particular focus on scaling practices. Moreover, it is a more top-down method to deployment, empowering business leaders to set big visions and map roles in advance. It also comes in four ‘flavors’ depending on your business size, Essential, Large Solution, Portfolio or Full. In a nutshell, Agile focuses on individual teams, whereas SAFe Agile focuses on multiple teams and how you coordinate them.

Building on the meteoric rise in adoption of Agile methods in the 2000s, Dean Leffingwell, creator of SAFe® and Chief Methodologist at Scaled Agile Institute (SAI) recognized the need for an Agile framework that grew as a business increased in size. In 2011, the first iteration of this new approach was released and now five releases later, it is recognized as the most popular scaling Agile framework with over 70% of Fortune 100 companies having certified practitioners. Early adopters included IBM, John Deere, and Nokia. Whilst initially conceived to support only software development, similarly to Agile generally, it can be used to scale and support non-software development initiatives also.

Diagram of Full SAFe Agile configuration

The general approach to SAFe Agile is as follows:

Enterprise strategy formulation - At this stage, a plan of action is created to achieve the mission of the Enterprise, comprised of the below pieces. This will directly affect the portfolio context, development, and continuous delivery pipeline

  • Vision - Defined as a future state that a company wishes to achieve
  • Mission - Current objectives that implement the vision
  • Core values - A belief system that governs company activities
  • Business drivers - Influential industry themes and trends which affect an Enterprise
  • Unique competency - USPs or distinctive capabilities that give a competitive edge
  • Financial goals - Financial or performance-based targets
  • Competitive environment - Competitor analysis of threats and opportunities in the market
  • Portfolio context - Unique opportunities, threats and conditions of individual portfolios

Portfolio context - At this stage, a plan of action has been agreed and portfolios are tied back to business strategy, with set goals and budgets.

  • Strategic themes - Strategic themes are unique objectives that match a portfolio to business strategy. This is a two-way connection, requiring the overarching business to set goals for a given portfolio and for the portfolio to provide portfolio context for enterprise strategy formulation
  • Portfolio vision - The portfolio vision is the intended future state of a given solution or initiative, this is typically aspirational but achievable
  • SAFe Portfolios - A SAFe portfolio is a collection of one or more related value streams or solutions which have a common governance and are usually split by business line, business unit or division
  • SAFe Cross-portfolio initiatives/Epics - Defined as initiatives that cut across the breadth of all portfolios, such as the implementation of GDPR policy
  • Lean budgets - Budgets are apportioned to value streams, not individual initiatives within streams, and includes horizons of investment and participatory budgeting, where roles across multiple value streams collaborate on apportioning budget

Development value streams - At this stage, teams are organized around value streams and follow set principles to deliver the intended value

  • Value streams - Value streams refer to all the people, systems and activities grouped together to progress a given area of the business. Their role is to define, build, validate and release new products within a specific stream
  • Agile Release Trains (ART) - ARTs, defined as a long-lived team of cross-functional roles, are dedicated to delivering a given initiative within a value stream. They are comprised of Agile teams and Agile/ScrumXP specific roles:
    • Agile Teams - Comprised of 5-11 cross-functional roles dedicated to a specific team topology; Stream-aligned teams, Complicated subsystem team, Platform team and Enabling team. Each team has a Scrum Master and Product Owner:
    • Scrum Master - The primary role of a Scrum Master is to remove impediments from team progress and to educate the team around the agreed Agile process
    • Product Owner - Responsible for deciding what to do next, defining what ‘done’ looks like and liaises with stakeholders outside of the immediate team

Additional roles:

  • Release Train Engineers (RTEs) - A servant leader, similar to Scrum Master, responsible for ART events and processes, as well as risks, removing impediments and communicating progress with other stakeholders
  • Product Managers - Decide what gets built, by working with product owners and customers
  • System Architects - Manage overall system architecture and specific non-functional requirements
  • Business owners - Key stakeholders who own the outcomes for the business from ART initiatives, coordinating with other departments and owning ROI, compliance and governance

Continuous delivery pipeline - At this stage, initiatives or solutions are researched, ideated, and delivered on-demand to customers

  • SAFe Continuous delivery pipeline - The collection of processes and assets an ART maintains to deliver solution or value stream
  • Continuous exploration - Defined as the hypothesizing of a new solution or product ideating around the features and capabilities needed, and the decision as to whether it will be a Minimum Viable Product (MVP) or Minimum Marketable Feature (MMF)
  • Continuous integration - The eXtreme Programming (XP) practice of ensuring every change is integrated, built and tested immediately upon being checked in
  • Continuous deployment - A release candidate, fully validated in a staging environment, is promoted to production automatically
  • Release on demand - Promotion to production occurs upon a virtual push-button when the Product Owner deems it valuable. In larger systems deployment is coordinated with other system components based upon business needs and conditions

In addition to the above approach, SAFe Agile 5 recommends organizations have seven core competencies of interrelated behaviors, knowledge, and skills. These are:

  • Lean-Agile Leadership – Agile leadership abilities that drive and maintain organizational change by empowering employees and teams to reach their highest potential
  • Team and Technical Agility – Encouraging group Agile behaviors in addition to sound technical excellence practices such as Built-in Quality, Behavior-Driven Development (BDD), Agile testing, Test-Driven Development (TDD), and more
  • Agile Product Delivery – Creating high-performing multi-layered cross-functional teams that utilize design thinking and are customer-centric, providing continuous development of valuable products using DevOps, the Continuous Delivery Pipeline, and Release on Demand
  • Enterprise Solution Delivery – Manufacturing and growing the world’s largest software applications, networks, and cyber-physical solutions
  • Lean Portfolio Management – Executing portfolio strategy and planning formulation, creating portfolio charters, generating the Vision, Lean budgets and Guardrails, as well as portfolio prioritization, and road mapping
  • Organizational Agility – Aligning strategy to execution by the application of Lean and systems thinking approaches to strategy and investment funding, Agile portfolio operations, and governance
  • Continuous Learning Culture – Continually increasing knowledge, competence, and performance by becoming a learning organization committed to relentless improvement and innovation

Further to the above competencies, similarly to the Agile Manifesto, there are 10 immutable principles to guide and inspire teams in delivering SAFe Agile:

  • Take an economic view - Delivering the highest value in the shortest possible time
  • Apply systems thinking - Understanding the systems in which solutions or products are initiated as well as those within a customer’s organization
  • Assume variability; preserve options - Maintaining multiple versions of a solution or product in parallel in case one does not work out
  • Build incrementally with fast, integrated learning cycles - Constant and quick improvement of a solution or product to see fast results; these will inform future changes
  • Base milestones on objective evaluation of working systems - Relevant business units and stakeholders provide impartial review and evaluation at every step of the delivery
  • Visualize and limit WIP, reduce batch sizes, and manage queue lengths - Minimize the amount of time before a solution is launched, reduce scope of initiatives to decrease wait time before launch
  • Apply cadence, synchronize with cross-domain planning - Creating a rhythm for development with multiple synchronizations of relevant teams across an organization to reduce uncertainty and increase focus
  • Unlock the intrinsic motivation of knowledge workers - Incentivization should be linked to team rather than individual performance, to encourage knowledge-sharing, an environment of mutual influence and higher levels of employee engagement
  • Decentralize decision-making - Ensuring that there are no bottlenecks or delays by decentralizing decision-making when it pertains to a given solution, but retaining centralized decisions for global/strategic implications
  • Organize around value - Focusing on fast and efficient delivery rather than antiquated functional expertise

 

Types of SAFe Metrics

 

There are three core areas of SAFe Agile where metrics are used to evaluate performance; these are Outcomes, Flow and Competency. Below are the metrics recommended by SAFe 5:

Outcomes

  • Net promoter score
  • Units sold
  • Conversions
  • Retention
  • Revenue
  • Tickets outstanding

Flow

  • Number of items completed in a given time
  • Time elapsed from when item entered flow to delivery
  • Items planned versus business value
  • Proportion of item types in backlog
  • Total number of WIP items across flow
  • Items being worked on versus total time elapsed

Competency

  • SAFe business agility assessment - 43 datapoints for business and portfolio leaders to rank overall progress on a given goal
  • SAFe team and technical agility assessment - 34 datapoints for business and portfolio leaders to rank technical and business practices
  • SAFe lean Portfolio Management - 29 datapoints for business and portfolio leaders to review investment in value streams
  • SAFe enterprise solution delivery - 31 datapoints for business and portfolio leaders to review how efficient pipelines are in delivering value
  • SAFe agile product delivery - 50 datapoints for business and portfolio leaders to review how effective market understanding and product delivery is
  • SAFe continuous learning culture - 25 datapoints for business and portfolio leaders to manage how employees are learning, adapting, and innovating
  • SAFe lean-agile leadership - 27 datapoints for business and portfolio leaders to analyze how leaders are enshrining lean-agile principles
Potential gains of implementing SAFe Agile

The potential pitfalls of SAFe Agile

 

There is no magic to SAFe. No, really, there isn’t, according to the authors.

Instead, the potential gains, as shown above, are realized through the application of SAFe principles, correct initial setup, and gaining the ability to track and trace deliverables, dependencies, and teams. But therein lies the problem. Enterprises that can and do adopt SAFe, experience significant costs in time and money ensuring people, processes and technology are all aligned and capable of delivering at scale. This investment, depending on how effectively it is utilized, will lead either to windfall or shortfall.

This first challenge, ensuring systems and culture are set up in a way that is conducive to SAFe is perhaps the biggest barrier. Going beyond deciding on the methodology, all stakeholders and dependent roles will need to be bought-in, accepting of and adaptable to this new way of working and, more importantly, thinking. The Agile mindset, customer-centricity, common goals, failure acceptance and cross-team collaboration, doesn't always come easily and may meet resistance initially. Add to that the complexity of SAFe Agile change transformation and the potential for problems grows.

But, overcoming this barrier, is just the start. You can’t just copy and paste a methodology into an organization in the hope it will work exactly as expected. You will need champions, you will need tracking technology, and most of all, you will need a method of measurement to ensure a successful implementation and ongoing high performance.

What you need, is OKRs.

OKRs support businesses big and small in defining value through strategic outcomes, ensuring alignment across large and complex organizations, and tracking investment and labor to outcomes. It relies on decomposing high-level objectives to actionable local objectives, interlinking alignments, then rolling up performance to measure progress and success in strategic initiatives. OKRs can be set at organizational, department, product, team or individual level to ensure that all are pulling and focused in the right direction.

 

How OKRs can support SAFe Agile?

 

OKRs are already in SAFe Agile 5.0

 

OKRs are already enshrined within the SAFe framework, as of version 5.0, when the concept of business agility was incorporated into the framework. When setting strategic themes, OKRs are recommended to provide clear actionable objectives that align a portfolio to business strategy. OKRs provide quantifiable, measurable and attributable measures of progress to overarching business goals.

As an example, let’s imagine one of your themes is Become a market leader. The strategic theme would be placed at the top of a business division or unit as an Objective, the measure of success would be Key Results and all contributing teams and roles would have cascading objectives to tie back to it. The theme, Become a market leader, is the aspirational drive of the objective and the Key Results are the outcomes that will evidence this.

 

Aligned objectives to Become a market leader

With the above approach, we can see the progress of each outcome, who is managing the initiatives which drive the Key Results, as well as what the division or business unit is focused on. Combining SAFe Agile strategic themes with OKRs gives a clear way for businesses to communicate what success looks like as well as the means of proving it has been met.

 

Creating rhythm

 

The naming of Agile Release Trains is no coincidence. Like their namesake, trains, they are expected to run on time, be predictable and have a particular rhythm for ideation, creation and release. It’s this regularity that ensures internal stakeholders, senior management and customers know what to expect each month as well as the resource and capacity needed to deliver it.

Whilst SAFe Agile recommends KPIs for ARTs, to evaluate value stream performance, there are shortcomings to this approach. KPIs are brilliant for giving glances at performance, whether a metric is met, unmet, or exceeded, but they will not tell you why, who or due to what. This missing crucial information will then have to be sought by stakeholders through other documents, communication channels, or meetings, potentially bottlenecking or slowing progress. These cumulative stops have the potential to delay or completely derail a value stream and could jeopardize the success of a launch.

OKRs on the other hand, provide clear goals and measures and accountability for remediating a failing measure. Not only is the Key Result progress updated, affecting percentage attained, but employees can also add comments to explain the cause. Outside of the cadence, managers and interested parties can also request additional information on blockers and progress.

We fully support the incorporation of KPIs in harmony with OKRs. KPIs are the broad tracking tool for instrumenting processes, while OKRs provide the focus and accountability to elevate a KPI that’s limiting success, and drive improvement.  

A combination of KPIs and OKRs could look like the below, KPIs for quickfire insights on value stream progress or longer-term metrics and OKRs for specific updates, short term metrics, and individual owners:

KPIs

KPI for Value Stream

OKRs

OKR for Value Stream

 

The gap between mission and vision

 

Having looked at the benefits at the value stream and ART levels, what then can OKRs do for Enterprises as a whole? In SAFe, the foundational definition of value, the organization’s “North Star” is set at the Enterprise strategy formulation stage, in particular with the vision, that is the planned future state of a business, and mission, the objectives created to implement the vision. The recommendation for capturing this according to Scaled Agile Institute (SAI) is the Mission Framework.

The framework perfectly sets out who will do what and how it will be measured to deliver the vision effectively. This is critical information for any organization in understanding the progress towards achieving the mission, instrumental actions taken along the way, and who was responsible for these actions. However, where this framework falls short is the lack of connectivity between the above components.

SAFe makes a massive omission in not advising how these should be tied together, if at all. Having who was involved siloed from the actions taken and separate to the measurement of success, would mean that progress was removed from initiatives, individuals separated from their actions and the success of the above could not be replicated again in the future.

How then to fill the gap?

The single most effective way of aligning vision to mission and strategy execution is through OKRs. When implementing a business vision, the first step is to collaborate with senior stakeholders to consolidate what the perfect future state would be.

Having discussed and set the vision, the next step is creating mission Objectives to implement it. A company objective is formulated, agreed upon, and then disseminated to the rest of the organization. Initiatives that feed into the achievement of the Objective are then aligned and named teams or individuals are given ownership.

 

At Gtmhub we use whiteboards to align vision, mission strategy and execution

In this way, the company’s mission vision and other strategic north stars can be expressed perfectly as OKRs for various time horizons and organizational elements, and incorporate a strategy execution methodology with no loss of clarity, and the added benefit of connectivity, accountability and repeatability as outcomes are captured from efforts.

 

Large scopes, large teams

 

Businesses that implement SAFe tend to be large and complex. Much of the attraction of SAFe comes from it’s ability to manage dependencies and complexities, at scale. 

Multiple teams, with many ongoing initiatives, magnify the challenges that single teams focused on singular deliverables, face. The biggest obstacle in implementing the complex administration of SAFe Agile, is visualizing who is doing what, at any given time. Moreover, understanding these dependencies and lines of support is only part of the problem, as measurement and contributions to success would be lost in anything but the most rigorous alignment mechanism and visualization. SAFe provides many practices for tactical coordination of dependencies at various levels, but SAFe offers little to coordinate and align strategic objectives of enterprise value, saying little about objectives above the portfolio vision level. This despite it being critical to the core values.

With OKRs, it is very easy to measure, align and envision how efforts, integrated workforces and teams roll up to overall Objective success. This is enabled through the creation of parent-child relationships and horizontal alignment, with ownership given to individuals or teams. This can further be simplified by the utilization of shared OKRs. Rather than having to create an individual objective each time a person is affecting the outcome of initiatives, instead, all contributors can either share at the Objective or Key Result level to capture joint initiatives and input.

At Gtmhub, we visualize and measure individuals, teams, and departments at both a single and cross-functional level. Due to enhanced filter functionality and configurable privacy, teams can choose the alignments, objectives, and progress, from whichever team they wish to view as needed. This means that both cross-functional, team and individual progress can be reviewed at any layer of the business.

Example company alignment

 

Keeping stakeholders in the loop

 

Another hurdle in deploying SAFe is how its top-down approach removes front-line employees from decision making, often isolating them from a deep understanding of the higher-level business objectives that are driving their portfolios and value streams – when the definition of value becomes remote, the “why” of one’s work is lost and bad decisions on “how” emerge.  This distance from the creation and definition of strategic objectives can limit team members’ understanding of the business value and functionality they are paid to create and hinder their ability to conduct well-informed and collaborative prioritization and planning as a result.

Ensuring teams are on board and aligned, irrespective of whether they are a decision-maker or influencer is paramount to the efficient running of SAFe. Whilst the principles of SAFe encourage regular meetings and specify the timing and cadence of releases, the busy work of meetings and ceremonies often overtakes the desired focus on value delivered as defined by progress on strategic objectives (OKRs).

There are several ways in which OKRs can loop in colleagues around the progress of an initiative to greater efficiency, the first is by subscribing to updates integrated within a dedicated platform. The benefit of this, over a straight email, is that it allows subscribers to not only configure their notifications to specific business areas or teams, but gives them the ability to dig into the specific performance metrics of an Objective.

Email notification on OKR progress

Within OKRs, whether departmental or individual, in-built analytics around trajectory, updates, and confidence levels can quickly yield knowledge to the viewers on progress and provide the most up-to-date news.

Built-in OKR Analytics

Finally, a centralized dashboard with all the performance metrics and a list of tasks, programs, and portfolios will quickly inform stakeholders on overall progression.

Insightboards are easy to build and understand

How Gtmhub can support SAFe Agile and OKRs

Gtmhub’s OKRs solution supports you in executing your SAFe strategy in a scaled, aligned, and well-executed manner. Our goal-growth platform enables you to track and report on performance at all times, capturing ownership, initiative progress, and interdependencies.

If you’re looking to deploy faster, align closer, and execute better on your value streams, speak to one of our free Agile coaching partners or arrange a short chat with one of our OKR specialists today.