OKRs are the Missing Link between Product Vision and Sprint Goals
Godehard Gerling is a Managing Partner at go3consulting – a leading management consulting company, based in Germany. In this Voices of OKR feature Godehard reveals how OKRs make a real difference when it comes to engineering and agile software development.
Over the past several years we have coached dozens of corporate teams to adopt agile working models. These working models have helped them be more productive and deliver more predictably, and often happier for that reason.
Happiness sometimes only goes so far though, as we have improved the teams’ delivery, but not their business impact. Usually, when we look at team health measurements, the “Pawns or Players” value keeps flagging.
The challenge: As part of improving the teams’ delivery process, we have coached Product Owners to prioritise according to “business value”, in line with the first agile principle:
“Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.”
While this seems to be in line with agile principle No 2:
“Welcome changing requirements, even late in development….”
…the well-tuned delivery engine that the agile team has become feels like it’s idling at high revs.
Agreeing on a shared Product Vision to inject a longer-term perspective does not always lead to a notable change. Even if everyone fundamentally agrees and supports it, the line between long-term vision and shorter-term actions often remains blurred.
“Business Value” is a rather flexible term – it can be interpreted as commercial value (increase $$ billed), user value (increase usability), technical value (less bugs and tech debt), etc. Depending on the PO’s continuously shifting power balance with the typical multitude of stakeholders, priorities change frequently as a result.
That’s where OKRs make a real difference. OKRs form a bridge between Vision and short-term actions, while giving teams the freedom to deliver towards business impact.
Consider the following example. In a B2B scale-up company, a small group of agile software teams applying a lightweight scaled model is tasked with developing and operating an IoT installation, that includes device software, as well as a data management console. The product vision is to enable new business models based on data provided by the devices. However, deal-related reprioritisation requests from Sales, and Customer Success-originating demands make for constantly shifting priorities. All relevant stakeholders are part of a regular Business Epic review/prioritisation meeting, where – despite the agreed product vision – perceived short-term business value usually wins out.
In this setting, we introduce OKRs as a mid-term perspective asking the stakeholders to agree on 3-5 business priorities aka Objectives, and the agile teams for Key Results that allow them to demonstrate they are making progress against them.
The benefits: the stakeholders are forced to step back from the fray and consider mid-term business priorities with a view to the product vision. Priorities move from the de-facto sprint-based feature- and fix discussions to a multi-sprint business outcomes perspective, aligning all stakeholders. Despite the non-dev functions not introducing OKRs (yet!) overall alignment with respect to agreed business goals increases.
The software teams gain the autonomy to develop and prioritise what’s best for achieving the business outcomes agreed in the OKR set. Business impact becomes measurable. As a result, motivation, “Pawns or Players”, and productivity improve.
OKRs are the missing link that turns business value arguments into impact discussions based on measurable data, increasing alignment from Product Vision to business focused execution and with it – success.
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