Three Business Agility Transformation OKRs to Measure Transformation Success

Objectives and key results (OKRs) are essential in guiding an organization in its Lean-Agile transformation. But what exactly are OKRs and how and why should leaders use them? In this episode, Vikas Kapila, SPCT at Enterprise Agility Consulting, shares three business agility transformation OKRs that leaders can use to accelerate adoption and outcomes.

Melissa and Vikas discuss elements including:

• Leadership engagement
• Four superpowers of the OKR framework
• Tribal unity and agility
• Organizational agility

Follow these links to learn more about topics referenced in the podcast:

• History of OKRs
• Measure What Matters by John Doerr
• Tribal Unity by Em Campbell-Pretty
• Project to Product by Mik Kersten
• Organizational agility core competency in SAFe

TRANSCRIPT

Speaker 1:

Looking for the latest news experiences and answers to questions about SAFe? You’ve come to the right place. This podcast is for you. The SAFe community of practitioners, trainers, users, and everyone who engages SAFe on a daily basis.

Melissa Reeve:

Welcome to the SAFe Business Agility Podcast recorded from our homes around the world. I’m Melissa Reeve, your host for today’s episode. Joining me today is Vikas Kapila, SPCT at Enterprise Agility Consulting. Thanks for joining me, Vikas. It’s great to have you back on the show.

Vikas Kapila:

Thank you, Melissa. I’m excited to be here again.

Melissa Reeve:

In this episode, Vikas will share three business agility transformation objectives and key results, or OKRs, that leaders can use to accelerate adoption and outcomes. Let’s get started. So Vikas, for our listeners who may not be familiar with OKRs, can you describe what they are and their purpose?

Vikas Kapila:

Yeah, the objectives and key results, alternatively also called as OKR or OKRs, are generally a goal-setting framework used by individuals. Can be used by teams, can be used by complete tribes or organizations, right? Basically, to define measurable goals and track their outcomes. Now it’s a set of two phrases. “Objective” refers to what is to be accomplished, right? It tries to define the objectives that are important, that are concrete, action-oriented, and inspirational. Now, on the other hand, the second phrase, “key results,” they engage in benchmarking and monitoring; how to accomplish these objectives.

Speaker 1:

The origin of OKRs dates back to 1954 when Peter Drucker was the first to examine management as a separate responsibility. He also introduced management by objectives, MBOs. In the 1970s, Andy Grove, the CEO of Intel expanded on Drucker’s MBOs by adding the concept of key results, and OKRs were born. Yet the concept really took off in 1999 when John Doerr, a member of Intel’s management team, introduced them to Google founders Larry Page and Sergei Bren, who quickly adopted them. Today OKRs are still an integral part of Google’s culture and DNA. To learn more OKR history, follow the link in the show notes for this episode on scaled agile.com/podcast.

Melissa Reeve:

So let’s shift now into the SAFe environment and for companies that are implementing SAFe, why is it important for leadership in those companies to establish OKRs?

Vikas Kapila:

One of the key elements, right? We are now in the 15th State of Agile report, right? That has come out early this year. But I’ve been following it since the seventh one closely and every one of them had leadership non-engagement or lack of engagement as a key detriment into the success of adoption of Agile, right? And when it’s a key, it meant that it was more than 40% of respondents, sometimes 41%, sometimes 44%, sometimes 46%, would say that lack of leadership participation was a key reason for non-sustaining or acceleration of the adoption. It was a great champion event would happen and then it would die. So from that perspective, it becomes so important for us to get leadership engagement, and what better to get OKRs, right?

Melissa Reeve:

Yeah. In fact, we talk a lot about leadership engagement on this podcast and it’s a constant source of conversation about how do we make sure that we’re not just getting leadership support, but truly getting that engagement. So talk to us about that.

Vikas Kapila:

And that’s why I think OKR is the right framework to help us because OKRs as a framework bring in four superpowers. They are focus, alignment, collaboration, and engagement. Collaboration brings in … So if these are the four superpowers of OKR, then if we use that as a framework to define the objective, even if we set out its objective was very simple, increase leadership engagement in our adoption journey or in our transformation. You could define three to five key results there that show you are on track. And whatever the key results you have, all of them have to be achieved for the objective to be true. So if we put those out very simply that, “Hey. We see our leadership engaged at least 75% of the system demos. If we see our leadership engaged in the PI planning 100% or 90%,” whichever your numbers that you pre-agree as your center that’s setting the metric up, are setting the key results up. And you achieve it, you can see progression, you can see progress, and you can have a conversation about it. “Hey. We met it. How did it feel? What was right? Hey. We didn’t meet it.” Then have a conversation, “What could we have done differently?”

Melissa Reeve:

Vikas, that’s great. And I can see how the four superpowers really help leaders lean in and get that engagement. What are some other reasons why it’s important for leadership to establish OKRs?

Vikas Kapila:

So I gave you one example about engagement of leadership, but the other important reason why leadership wants to establish these OKRs is to actually understand and get a sense of how are they evolving their burning platform, the true reason the transformation’s happening. Are they able to measure the progress to the evolution of the burning platform? Are they actually able to make their platform more healthy? Are they able to make the system less urgent? Is that happening? So the OKRs can help set that objective and then help identify the key results that you need to march towards, that you need to achieve, that you need to accomplish to get there. Second thing, sometimes when we talk to leaders, the first thing comes up, “We need a business case to do a transformation.” And a lot of times leaders are able to put that business case together and get the funding.

Vikas Kapila:

But now a lot of times you forget about that because next year we have to rewrite it. So what I’ve started doing is having that conversation, “Hey. Let’s justify the investment in a transformation and let’s do it incrementally. So even if we have allocated budget, sometimes millions, sometimes multimillion dollars, let’s make it incremental to see that we are investing in the right way, we are allocating the funds quarterly to that from that budget so that we have built in those key results that we expect for every allocation of funds we get toward that investment in transformation. So that it is more intentional rather than letting it be only organic.” And so this enables leaders to have practical ways to accelerate the adoption of SAFe, adoption of this journey because now they start seeing the quick results, they start celebrating it sooner than later. And that is really important and helpful in the system.

Melissa Reeve:

If we as leaders set these OKRs upfront, we’re better able to measure how successful we are in our SAFe transformation. That’s essentially what I’m hearing you say.

Vikas Kapila:

Right. See? You said it so much better than I could.

Melissa Reeve:

Alright. So now that we know what OKRs are, let’s talk about OKRs that are specific to SAFe transformations. And I think you have three OKRs that you advocate for: one for leaders, one about organizational collaboration, and then there’s a third one. Can you describe those for our listeners?

Vikas Kapila:

Absolutely. The first one that you said, yeah, leadership engagement, the one I used as an example too. The other is organizational collaboration. Some people also call it organizational agility; how do you build that. And the third one is tribal agility enablement because a key element of success with the Agile success in achieving agility is teamwork. And to that, teamwork for me is more like a tribal behavior, the tribal mindset, how do we build that. So having an OKR says that we are intentionally trying to evolve and grow that mindset in the system, so tribal agility enablement.

Melissa Reeve:

So we talked a little bit about that leadership engagement and ways that you could measure that, that OKR. I think earlier you talked about how often they’re participating in SAFe events, like the system demo and PI planning. What’s another way that you could set up a leadership engagement OKR?

Vikas Kapila:

Three things that I’d look at to add to that are basically, one of them is, are they willing to learn the new way of working? Are they willing to know the way and then lead by example? That’s one key objective that I would say we should set up as leaders are willing to learn the new way. Another one I would talk about, are they being leaders of the change, to adapt the new way of leadership or management in the digital age? Because the patterns, the behaviors, that leaders or managers would have in the oil and mass production age are different than the behaviors and patterns we are expecting leaders to be there and be effective within this. So having an objective of that is amazing. Now what really becomes a foundation for these is the third one, which is, are they embracing Lean-Agile values, mindset, and principles. Things that they’re asking everybody else in the organization to adapt, be aligning to; are they doing that themselves as well? Are they championing those values? Are they championing those principles?

Melissa Reeve:

We know we need this leadership engagement and you’ve given us some really concrete examples on how to set OKRs around that. Two questions for you. One is, who in the organization tracks those leadership engagement OKRs. And then, who are we calling leaders in this context?

Vikas Kapila:

So, the first one, who is tracking this? So think about this. We have the LACE, Lean-Agile Center of Excellence in a SAFe implementation. And this LACE is, at this point, responsible for doing self-assessments and facilitating self-assessments of the team and technical agility of the leadership agility and all of that. So the LACE is doing. I think what my observations of success have been that these set of OKRs are actually set up to self-assess the LACE itself, the leaders that are in the LACE, the performance of the LACE. So thereby because it’s at the end of the day helping us justify the investment in transformation. So this is basically a self-assessment that the LACE team is doing on their performance.

Vikas Kapila:

The second question was if I remember right, is who are leaders in this context? So I’ll try to avoid the titles different organizations have because every organization has their own labels, have their own titles. I’ll try to correlate this to the roles as we call them in SAFe. For me at the team level, the scrum master and product owners are leaders. At the Essential SAFe or the Agile Release Train level, the RTE, the product managers, the system architects are leaders. The business owners are leaders of the train, the solution manager, the solution architect, the solution trainings needed for the solution train are leaders. Similarly, the participants in the portfolio, lines-of-business heads, the portfolio managers, the portfolio sync engineers, they are all leaders that are there. So, different perspectives in the organization with different roles. We have leaders in the organization and we want each one of these leaders to be engaging actively to have an effective transformation.

Melissa Reeve:

So you also mentioned tribal unity as an OKR. So a couple of questions there too. I’m trying to manage your WIP limits. First, is that a nice shout-out to Em Campbell-Pretty and her book Tribal Unity?

Vikas Kapila:

Yes. Tribal Unity, essentially, it is about bringing that team spirit, bringing that oneness, right? Because we have as humans done a great job over years over this thing to think about the team before self, especially to bring agility at scale to have effective business agility is to think about the train before the team. To think about the portfolio before the train, right? So that’s the transcendence of that oneness, that feeling, that tribal feeling from being a team, to being a train, to being a portfolio that needs to be built-in, and that’s the OKRs’ role to play to help enable that in the system.

Melissa Reeve:

And so what are some examples of OKRs that you could set to measure this degree of tribal agility or tribal unity?

Vikas Kapila:

The key elements within that drive, what really helps is better transparency. They have a better alignment. What helps build that transparency and alignment is trust in the system, right? And what helps build trust is enabling an environment where people feel safe to be vulnerable. So these key parameters need to come together to say, “How are we doing as a system to encourage experiments in the system?” Where people feel SAFe, people feel okay to run an experiment, hoping it’ll be a success but if it’s a failure, they’re excited because they had new learnings rather than feeling worried, “Oh, my story got rejected and not.'” So that element of employee engagement, success and employee confidence level is the key measure here. So what I ask teams to set up is service where they’re talking about intra-team collaboration, we’re talking about transparency and alignment, how what are the key behaviors? And there are a set of questions that can help us see how it’s doing in the system.

Melissa Reeve:

Yeah. So you’re really looking to measure how well are we collaborating? Are we being transparent? What results does that lead to? And putting an anchor around that, so you can ultimately measure that result of, are we achieving tribal agility?

Vikas Kapila:

Right. So if I were to put it in four key results that I’m looking for, I’m looking, one, at the team level to see if the teams are truly being self-managing, self-organizing, feeling confident for making decisions at their team level. Second thing I’m looking for is within that train, is there intra-team collaboration happening? Are we swarming together as teams? And what tells me … sometimes I do the service, but also a program board shows me when I look at PI planning and the ART sync and all, if that intra-team collaboration is happening or not. Next are the conversations about delivery. Are they customer-centric? Or are we still in the voice of the system? So we want the customer-centric conversation because now we really need that swarming of teams to happen to solve the problems because we are coming from different aspects of the problem statement. So these things can be your key results to observe for key outcomes, to monitor, to help with this particular objective.

Melissa Reeve:

So, we’ve talked about the leadership engagement OKRs. We’ve talked about tribal agility OKRs. Let’s talk about your third OKR that you recommend, which is that organizational collaboration or organizational agility. Talk to us about that.

Vikas Kapila:

Yeah. Thank you. It’s a fractal scale-up, of what we were just talking about in the tribal agility, but the essence is now beyond just my delivery teams looking at it. I want my operations team, I want my marketing team, I want my legals, I want my audit, all of these different aspects that actually help us achieve that business solution, not just the hard product solution and everything going on, but that whole end-to-end element coming through that needs intra-organization collaboration. Now, if I look at the hierarchical structures that our organizations have, the delivery team, the operations team, the legal team, and stuff. So when I start enabling collaboration across them so that we have a more robust definition of ready upfront, so that we have a more robust definition of done before we start the going. And so that we have good, effective feedback loops going on incrementally along the journey so that I can actually enable lean QMS, lean quality management, rather than big-batch quality management. That’s the key results I’m looking for from this organizational collaboration as the objective, essentially reducing handoffs, enabling more collaboration across hierarchies.

Melissa Reeve:

So you’ve given our listeners three really great OKRs, again around leadership engagement, around tribal agility, around organizational collaboration. When we were preparing for the show, you hinted at a potential fourth OKR that you would advocate for. What was that?

Vikas Kapila:

That’s always been an objective in mind for me for every transformation thus far, most of them that we work with, whether it’s digital transformation, business transformation or just bringing Agile in, is project to product mindset. Now, it’s very … and this is the same conversation I had with Dean earlier when he introduced the principle number 10, organize around value because we always said it is implicit. It is the goal of the business agility transformational to get to organize around value, but we wanted to make it explicit. And in that same spirit, I’ve been thinking of making this fourth objective more explicit as project to product mindset. The intent being that we need to do a handful of things, six to seven things, to make this truly possible in an enterprise, a Fortune 100, Fortune 5000 enterprise.

Speaker 1:

In his book, Project to Product, Mik Kersten introduced the flow framework, a new way to see, measure, and manage the flow of value through an organization. Read more by following the link in the show notes for this episode at scaled agile.com/podcast.

Vikas Kapila:

It’s … I’ve added the same conversation I had with Dean earlier when you introduced the principle number 10, organize around value because we understand it is implicit. It is the goal of the business agility transformation, or to get organized around value, but we wanted to make it explicit. And in that same spirit, I’ve been thinking of making this full objective, more explicit as project to product mindset. The intent being that we need to do a handful of things, six to seven things to make this truly possible in an enterprise, a fortune, a hundred fortune 5,000 enterprise, right? And so explicitly calling those things out as a respective objectives and then calling out the key results that I need in my journey, uh, quarter by quarter to achieve success in that do experiments I’ve done in the last few years have been very well received. It’s very … and this is the same conversation I had with Dean earlier when he introduced the principle number 10, organize around value, because we always said it is implicit. It is the goal of the business agility transformation to organize around value, but we wanted to make it explicit. And in that same spirit, I’ve been thinking of making this fourth objective more explicit as project-to-product mindset. The intent being that we need to do a handful of things, six to seven things, to make this truly possible in an enterprise, a Fortune 100, Fortune 5000 enterprise. And so explicitly calling those things out as respective objectives and then calling out the key results that I need in my journey quarter by quarter to achieve success in that. Two experiments I’ve done in the last two years have been very well received and given me the confidence to start saying that, “Hey, Vikas, I should probably start saying there are four transformation OKRs rather than three.” And so that, yeah, this one has been project-to-product mindset. Now that being the objective, if it’s OK for me to take a minute to talk about the key results that I focus on, Melissa?

Vikas Kapila:

So one’s focusing a lot of conversations about how do you fund your milestones, right? Are they annual budget cycles versus funding the value stream? So those evolutions, talking about … when I’m talking about big batch versus small-batch, cadence-based, small-batch life cycle, that’s another key result. How do I get to? How am I relentlessly improving that cadence? The third one being measuring business outcomes on a regular basis in those small life cycles rather than only looking for big outputs. So not looking for the phase-gate style milestone, but objective, working systems. How am I managing risk? Am I carrying for the risk until the end and with the hope-and-pray strategy? Or am I incrementally, as I’m integrating my solution, as I’m building my outcomes, reducing the risk that I’m carrying forward? So, OKRs also start integrating now about teamwork, about sequencing work, and transparency and availability there. That’s all objective is project to product mindset. That’s the objective. And the other bullets I talked about are the key results that that objective has. Yeah.

Melissa Reeve:

You’re introducing these three, potentially four OKRs. In your opinion, how widespread is the adoption of using these types of OKRs to track the transformation and potentially accelerate it? Is this something that you see widely used in the field or is this practice that you’re setting out something that you’ve invented and you would like to advocate for?

Vikas Kapila:

I’m humbled by the thought of you even thinking I’ve invented something. So thank you for that. I think I stand on the shoulders of many before me. So I have adapted. I have adapted the OKR framework. And the other message that I’ve adapted over here is where people think about from whether it’s implementing SAFe or Leading Change from John Kotter who always said, “Set a sense of urgency.” He said that “Establish that sense of urgency before you move.” So we’ve done that. I have adapted OKR as a framework to set that sense of urgency and make that explicit. I’ve tried to use the superpowers of OKR, use the effectiveness of OKRs, to make that more explicit. So in a way, if you think, what is innovation? Bringing two great ideas together to create another better idea, in that sense, yes, I have tried to use this in that sense and I would advocate because I’ve seen a lot of success in the last five years I’ve been using this. It has been very helpful in transformations I’ve worked with. So I have enough proof. When I talk to other SPCTs and stuff, they also do very similar things. I’ve not heard anyone explicitly call out that they use OKRs, but they do sense of urgency. They do establish that and they monitor that on a regular basis.

Melissa Reeve:

Yeah. So this podcast is really geared for our listeners who maybe are struggling to establish that sense of urgency. Really establish the measurement of how you’ll know when you’re making headway in these different areas. And Vikas has put forth several different ways to help create the sense of urgency in order to accelerate the adoption and those outcomes. Thanks, Vikas, for sharing how important these OKRs are to a successful SAFe transformation and journey towards business agility.

Vikas Kapila:

Thanks, Melissa. Yeah, it was great to be here. It was a pleasure. Thanks for having me again.

Melissa Reeve:

Thanks for listening to our show today. Be sure to check out the show notes and more at scaled agile.com/podcast. Revisit past topics at scaledagile.com/podcast.

Speaker 1:

Relentless improvement is in our DNA and we welcome your input on how we can improve the show. Drop us a line at podcast@scaledagile.com.