EFS Consulting
10/28/2024

OKRs in Agile: How Objectives and Key Results Support Agile Work

In agile teams, flexibility and adaptability are paramount. But how can teams align with the company's strategy without slowing down the team's dynamics and maintaining the agile mindset? This is exactly where OKRs (Objectives and Key Results) come into play. In this article, you'll learn what OKRs are, how they support agile methods like Scrum and Kanban, and how you can successfully implement OKRs in your company.

What are OKRs? 

OKRs (Objectives and Key Results) are a goal-setting framework that helps translate visions and strategies into measurable outcomes. The concept of OKRs was introduced in the 1970s by Andrew Grove at Intel and has since established itself as a successful tool used by startups as well as medium-sized and large companies like LinkedIn, Zalando, and Spotify. 

A popular example is Google, which has been using OKRs since 1999 to formulate ambitious goals that foster employees’ intrinsic motivation. At the same time, clear, measurable goals create sharper focus and support continuous progress. 

Specifically, OKRs consist of two main components: 

  • Objectives: Qualitative goals that describe the “why” – they should be inspiring and challenge the team 
  • Key Results: Measurable outcomes that indicate “how” the Objective will be achieved. They serve as clear indicators to evaluate the progress and direction of activities or the team. 

OKRs create clarity, focus the team, and offer the flexibility to react quickly to changes. They are based on three central elements: 

  1. Focus: Concentration on a few, but central goals 
  2. Transparency: All OKRs are visible to the entire company 
  3. Regular reviews: OKRs are continuously evaluated and adjusted if necessary 

Objectives (Goals) 

Objectives provide direction, motivate the team, and steer it in the right direction. They ensure that there is a connection between the company’s vision and the team’s concrete tasks. 

A well-formulated Objective directly contributes to the strategic goals and supports their implementation in daily business. This creates a coherent alignment where every individual effort contributes to the greater whole. Objectives should be high-quality, inspiring, and formulated clearly and understandably. 

Example of an Objective in an Agile Context: 

“Our goal is to provide outstanding customer service that significantly exceeds the quality and customer experience standards of large companies.” 

This Objective is clearly formulated and gives the team enough freedom to develop their own solutions. 

Key Results 

Key Results are the indicators that make progress toward the Objective visible and measurable. For each Objective, there should be two to four Key Results to maintain focus. 

An essential aspect when formulating Key Results is that they should be designed according to the SMART principle—specific, measurable, attractive, realistic, and time-bound—to ensure that the goals are clear, achievable, and verifiable within a set timeframe. It is important that Key Results are ambitiously formulated so that achieving 70–80% of the goal is already considered a success. 

Example of Key Results in agile context: 

For the Objective “Increase customer satisfaction,” a Key Result could be:  

“Gather feedback from 25 customers to improve service by the end of the quarter.” 

“Reducing the average response time to customer inquiries to under 2 hours” 

OKR Cycle in Focus: The Four Central Workshops 

To implement the OKR process in a structured way, there are four central workshop formats within an OKR cycle that accompany progress and ensure that goals are achieved. 

  • OKR Planning: The starting point of each cycle. The team defines the Objectives and Key Results for the coming quarter. The OKR Planning process is a mix of top-down and bottom-up approaches. On the one hand, the team is directly involved in OKR Planning to ensure that the goals are realistic and motivating for the team. On the other hand, the OKRs must contribute to the overarching company strategy. 
  • OKR Check-Ins: Regular, short meetings to keep an eye on progress and discuss obstacles. They take place weekly or every two weeks. 
  • OKR Review: At the end of the cycle, the team evaluates goal achievement and shares learnings. Unlike the short Check-Ins, a deeper analysis takes place here: What went well? What can be improved? This generates insights for the next cycle, which can be used as a basis for planning the following cycle. 
  • OKR Retrospective: In a comprehensive reflection of the entire process, collaboration is evaluated, and opportunities for better teamwork are identified. 

OKRs vs. Traditional Goal Setting 

Compared to traditional goal setting, OKRs are more flexible and dynamic. OKRs help teams think in shorter time frames and regularly review goals. Therefore, they are perfect for teams that work in short cycles and need to react quickly to changes. 

An important difference from Management by Objectives (MbO) is that in MbO, individual goals are set for each employee or department. However, these goals can often conflict with one another, as they are not always aligned with the same company-wide objective. In contrast, OKRs focus on company-wide objectives, promoting clear alignment and collaboration. This prevents different departments from working against each other. 

Aspect  OKRs  Traditional Goal Setting 
Timeframe  Short-term (quarterly)  Long-term (annually) 
Flexibility  Regular adjustments  Less flexible, often rigid 
Measurability  Clear, measurable Key Results  Often long-term, harder to quantify for daily work 
transparency  Open communication across the company  Often limited to leadership levels 
Motivation  Inspiring and challenging  More conservative, stability oriented 

 

While traditional goals focus on long-term stability, OKRs offer the advantage of being dynamically adaptable to new challenges, providing great benefits in today’s work environment. 

Difference: KPIs vs. OKRs 

KPIs and OKRs – two terms often mentioned in the same breath, even though they have fundamentally different purposes. While KPIs (Key Performance Indicators) continuously measure the success of ongoing processes and serve as long-term performance indicators, OKRs focus on ambitious goals that aim to take the team to a new level. 

KPIs provide an overview, for example, of sales figures or customer satisfaction. OKRs, on the other hand, challenge the team to create change—for example, with goals that should be achieved within a quarter. 

“One could say that KPIs keep the ship on course, while OKRs set the destination on the horizon.” 

A KPI could be the continuous measurement of the Net Promoter Score (NPS), which indicates the current state of customer satisfaction. A Key Result of an OKR cycle could be: “Increase NPS by 10 points in the next quarter.” While the KPI monitors the current state, the OKR provides a clear, time-bound goal. 

Measurability and Success Control: Qualitative vs. Quantitative Key Results 

Key Results can be either qualitative or quantitative. Both types have their place in a well-structured OKR framework. 

  • Qualitative Key Results: These focus on “soft” factors like customer satisfaction or employee engagement. An example would be: “By the end of the quarter, we have created a report that highlights the problems in our current customer service processes.” 
  • Quantitative Key Results: These set concrete, measurable goals like increasing sales figures or reducing processing time. An example would be “Reduce response time for customer complaints by 50%.” 

The combination of qualitative and quantitative Key Results allows both tangible progress and more abstract success factors to be depicted. It is important that even qualitative goals remain clearly defined and measurable. 

The Perfect Connection: OKRs and Agile 

Agile methods like Scrum and Kanban harmonize excellently with OKRs. Both systems rely on flexibility and continuous improvements. While OKRs are there to set clear goals, agile approaches help to achieve these goals step by step. It’s about keeping goals firmly in view while remaining flexible. This combination creates the balance that is crucial for agile working. 

Why OKRs Make Sense in Agile Teams 

For working in an agile team, structure and flexibility are equally important. This is exactly where OKRs come into play. They provide clear direction without taking away the freedom for changes. By regularly reviewing progress and simultaneously allowing adjustments, the process remains agile and flexible. OKRs ensure that each sprint is clearly aligned, and the big goal does not get lost from sight. Through OKRs, the agile work process receives a clear structure, so that each sprint contributes step by step to the overarching goal. 

Synergies Between OKRs, Sprints, Retrospectives, and Stand-ups 

The close connection of OKRs with Scrum elements like sprints, retrospectives, and regular stand-ups is one of the greatest strengths of the framework. Agile training helps to successfully utilize these synergies within the team. What’s great about it? In the sprints, concrete steps are planned to achieve the Key Results. The daily stand-ups offer the opportunity to review progress, discuss any hurdles, and set priorities. In the retrospectives at the end of a sprint, the team reflects together: What went well? What can be improved? 

At the end of an OKR cycle, there is also a larger review and retrospective. Here, not only is it evaluated whether the goals were achieved, but also what lessons can be taken for the next cycle. Through iteration in agile processes, the team remains focused and flexible enough to adjust. 

Connecting OKRs with Kanban and Scrum 

OKRs are flexible and integrate well into agile frameworks like Scrum and Kanban. While Scrum teams incorporate OKRs into their sprint planning to ensure that every task contributes to achieving a Key Result, Kanban is more flexible and less structured in cycles. In Scrum, the OKRs are broken down into sprints. This means that the goals of a sprint are directly linked to the Key Results. After each sprint, it is checked whether the team has come closer to achieving the OKRs. In this way, OKRs ensure that long-term goals are not lost sight of, and each sprint makes a clear contribution to the overarching vision. 

Kanban, on the other hand, offers a perspective of continuous improvement. Since Kanban teams do not have fixed sprints, they work continuously on the flow of tasks. Here, OKRs act as a kind of “North Star” that sets the long-term direction while the team works daily on improving processes and eliminating bottlenecks. OKRs can help to focus not only on operational flow but also on strategic improvements. This is achieved by prioritizing tasks that directly contribute to achieving the Key Results. 

Another aspect of connecting OKRs with Kanban is the visualization of progress. On a Kanban board, OKRs can be visualized at a high level, and the progress of the respective Key Results can be made transparent. This helps the team to recognize bottlenecks and delays early and to take targeted measures to achieve the set goals. 

Both in Scrum and Kanban, OKRs create a clear goal orientation that enables the team to connect daily progress with overarching goals. Through regular reviews and adjustments, the team always stays on course without losing the flexibility of agile methods. 

OKRs in Practice  

The introduction of OKRs in agile teams can lead to significant improvements in focus, goal setting, and measurement of results. But as with any new method, there are challenges that need to be overcome. 

Challenges in Introducing OKRs in Agile Teams  

One of the biggest challenges with OKRs is setting the right goals. These should be ambitious but also achievable. Especially for teams that are new to working with OKRs, it can be difficult to find the right balance. Too many OKRs dilute focus; too few do not fully exploit the team’s potential. 

Another challenge is defining OKRs in a way that fits both daily work and the overall company strategy. External consulting or coaching can help here to ensure that the OKRs are meaningful and implementable. 

The Role of Leaders in Introducing OKRs  

Leaders play a crucial role in the successful introduction of OKRs, taking on the following main responsibilities: 

  • They are responsible for setting clear, inspiring Objectives that motivate the team and align with the company’s strategy. They must ensure that the team has the right tools and resources to achieve the Key Results. 
  • Additionally, leaders should provide regular feedback and monitor the progress of the OKRs. It’s important that they act as role models, actively accompany the OKR process, and integrate it into the team’s daily routine. This ensures that teams not only achieve the goals but also understand why they are important and feel motivated by the OKRs. 

Overcoming these challenges requires a clear understanding of agile project management 

Tools and Technologies  

There are numerous tools that support companies in effectively implementing OKRs and tracking progress. Here is a selection of the most popular tools: 

  • Miro: Ideal for Agile Remote Work, allowing you to create visual boards for OKRs and track goals. 
  • Jira: A tool for tracking OKRs in connection with Scrum sprints. 
  • Power BI: Excellent for monitoring Key Results in agile teams. 
  • Asana: A user-friendly tool for managing projects and linking OKRs with daily tasks. 

Fundamentally, developing OKRs and successfully integrating them into the corporate culture doesn’t require sophisticated tools or technologies. Often, simple aids like post-it notes and pens are sufficient to collaboratively formulate OKRs within the team and make them visible and tangible. 

Step-by-Step Guide: How to Implement OKRs in Your Company 

  1. Involve the Entire Team: Start the OKR process together as a team. Discuss the company’s vision and strategy so that everyone can understand how the OKRs contribute. Every team member should have the “big picture” in mind and know how their own work contributes to achieving the company’s goals. 
  2. Set Ambitious Objectives: Define challenging, inspiring Objectives as a team that contribute to the strategy. These goals should be ambitious but still achievable to encourage the team to develop innovative solutions. 
  3. Individual Reflection on Key Results: Each team member reflects on how they can actively contribute to achieving the goals. The Key Results should include clear, measurable outcomes—whether quantitative or qualitative. It’s important that they are always clearly verifiable. 
  4. Define Key Results Together: Discuss the proposed Key Results as a team and agree on 3–5 measurable outcomes per Objective that clearly and understandably represent progress. These are used as the basis for planning the upcoming sprints or work phases. 
  5. Integrate OKRs into Agile Processes: Incorporate the OKRs into your agile processes, such as Scrum sprints or Kanban boards. Regular check-ins and retrospectives help to continuously track progress and ensure that every task contributes to the OKRs. 
  6. Regularly Review and Adjust: Use reviews and retrospectives to evaluate progress and adjust the OKRs if necessary. This creates flexibility and keeps the team on track. 
  7. Use Tools: For visualization and tracking, digital tools like Miro, Jira, or Asana can be helpful to keep the OKRs in view and make progress transparent. 

Conclusion  

OKRs offer an effective way to align agile teams toward common goals while remaining flexible in responding to changes. By clearly linking company strategy and daily tasks, they promote continuous improvement and goal-oriented work. With a well-thought-out introduction of OKRs and an agile mindset, companies can increase their agility and remain competitive in the long term.  

EFS Consulting supports you in successfully shaping this transformation and sustainably aligning your teams for success. 

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