In the world of tech, many industry giants such as Google choose to use a management framework known as Objectives and Key Results (OKR). This goal-setting platform requires a company, to define goals and come up with activities that should help them to meet these goals. Since the 1970s, OKRs have been used to improve the workplace capabilities of countless companies. When used as designed, OKRs can have a massive positive influence on organizations. OKRs are most effective when the key results set for an objective are validated during the OKR cycle. In my experience, many organizations skip this crucial validation step.
Current Role of Key Results
Defining an objective that a company, team, or individual needs to meet by the end of the quarter, or year is only one-third of the job of OKRs. One-third of the effort is identifying key results, which, more often than not, are activities that allow the company, team, or individual to meet the defined objectives. These key results tend to have a quantitative quality to them since the objectives are almost always qualitative.
Rather than just being a simple tactical list of activities, a better set of key results should be more of a measurable explanation of how the objective or goal will be able to be met. Once about four or five key results are determined for each objective, it is the job of an OKR Champion (servant leader) to coach and guide the team in executing on a cadence towards the objectives. This role is very similar to that of a Scrum Master. A Scrum Master may decide to take on the role of OKR Champion as part of a servant leadership commitment to the organization and Scrum Team.
Shortcomings of Key Results
Key results can be an effective roadmap for helping to accomplish predetermined objectives. As often used, key results are a predictive tool, which means that they are created based on what OKR Champions and other team members believe will work.
However, the very nature of OKRs is one of uncertainty because we work in complex environments, and we define these key results at a time when we know the least about how we will achieve the goals. Therefore, there is no blueprint to work from when trying to figure out which activities will be best suited to meeting the desired goal. The result is a series of activities that are believed to be effective, but these activities based on assumptions may or may not be valid.
Key results tend to fall short regarding the delivery of business value at the end of the measuring period, which is usually a business quarter. At this time, the team examines a set of resulting activities that are then determined to have been completed or not. Unfortunately, in most cases, that is where the process ends, and a new series of OKR begins. In the interest of maximizing the benefits of this framework, this should not be the final step in the process. The final, and often missing one-third of the effort is that of validating how the key results actually helped in achieving the objective. For example, an objective may look something like, "Improve the annual Information Technology budget forecast by business line." One of the key results could be, "Add a Peer Review cycle of 2 weeks into the forecast process while reducing the forecast period by five days." If this key result was completed, the team would likely declare victory and move on to the next set of OKRs. What needs to be considered however is the following: Did this activity improve the Information Technology budget forecast effort?
Validating Key Results
When teams only weigh the success or failure of meeting their objectives based on completing activities that they assume will move them towards their goal, we are left with much uncertainty. That is why it is so important that organizations beginning to use OKRs, start validating the outcomes achieved based on completing their key results. These organizations should finish each OKR cycle by measuring the current state of their objectives and clearly state how much of their assumed progress was achieved by the key result activities that were completed. The transparency provided by validating how the key results impacted the objective is priceless when determining the next objective or set of key results.
The current guidance on OKRs does not make validation of outcomes a necessary step in the process. Many teams execute their key results over and over again without conclusive knowledge related to the outcomes of their key results activities. Without knowledge of outcomes, how do we best determine our next steps?
Not only should these key results be examined, and validated at the end of the OKR cycle, they should also be validated immediately upon completion whenever feasible. Since OKRs are often created to last several months to a year, using a key result that is not very effective for such a long period may significantly impede the team's progress towards the defined objective. Taking the time to validate the key results after a week or two can help save the team a lot of time and resources. The savings can be then redirected toward other key results that are demonstrating benefits towards the objective.
To get help further refining your OKR process, contact our team of experts at Agile-ity today.