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Objectives & Key Results with Evidenced Based Management

Writer's picture: Stephen AngoodStephen Angood

Objectives and key results

Have you ever heard the expression shooting for the stars?


It's a classic idiom meaning to set goals or ambitions very high to achieve something particularly difficult.


Objectives and key results, OKRs, help us to shoot for the stars but there is one major problem with them, let's find out how they can help and the big big problem with them.


Have you ever had a great idea that if implemented could make a significant difference to the company? Could help you to the next level, perhaps the next great market opportunity, generate huge cost savings, massive efficiency gains. Only then to be swept by a wave of realism, that this is a very hard thing to achieve, maybe impossible, what if I failed, how would I feel, what would others think?


This is the fear of failure and it's a very real barrier to step change.


OKRs are used by many forward thinking companies to help them shoot for the stars, such as Google, Amazon, Netflix and LinkedIn.


They are unencumbered by the usual array of expectations often found with traditional objectives, which are unknowingly and unintentionally designed to stop us achieving very difficult objectives.


It allows us to focus on achieving the seemingly impossible by removing the fear of failure and making them safe to fail.


When it's expected that we must hit targets, we discourage innovation and experimentation and then we encourage report gaming and corner cutting and the setting of easy targets.


OKRs are made up of a set of ambitious objectives, that's the ‘what’. Which each have a set of key results, that's the ‘how’.


These key results must be unambiguous and importantly measurable. They are almost always some kind of numeric value, such as improve net promoter score by 50% or improve our user retention score by 25%.


OKRs are usually a set of ‘roof shots’ and ‘moon shots’.


A ‘roof shot’ would be typically something that is expected to be delivered, still difficult, but achievable and success might be measured around 80 to 100%.


These things might be business as usual activities, perhaps not so exciting, but the things that must be done to keep the organisation’s lights on.


A ‘moon shot’ would be that seemingly impossible thing to achieve, but if achieved, would be extremely significant for the company, that's the exciting stuff.


Success with a ‘moon shot’ might be measured around 50% to 60%.


The usual format is have about 5 objectives each with 3 key results. Usually, at least 3 of these objectives would be ‘roof shots’ with perhaps only 1 or 2 as ‘moon shots’. Too many ‘moon shots’ could end up being a de-motivator.


There’s much more to OKRs than simply this. Such as strategic alignment and transparency, focused execution, which helps us all prioritise our work and engage with people.


By providing the environment and the culture where people are allowed, encouraged and supported, to attempt the seemingly impossible or at least the very difficult by removing the fear of failure is one of their key advantages.


OKRs focus on what can be achieved, people, and can align very well with agile ways of working since their cadence is typically quarterly not annually so it fits well with inspect and adapt and short feedback loops.


When used well they can help us shoot for the stars, but, what about that big major problem I mentioned?


Well, OKRs set out what we want to achieve but the question is, so what? Why?


OKRs miss out on the most vital element of strategic planning, the outcome to the customer or the business.


As such their measures don't necessarily give leadership a view of whether investment initiatives are of value or not.


Enter EBM, Evidence Based Management.


EBM is a framework organisations can use to help them measure, manage and increase the value they derive from their product delivery.


It focuses on improving outcomes, reducing risks and optimising investments. In particular, it's very well suited to supporting business agility.


So how about starting with the outcome desired not the objective?


EBM has got 4 key value areas;


  • Improving current value, it's the value being delivered to customers and users today.

  • Leveraging and accessing unrealised value, that's the value that could be realised by identifying and meeting potential needs.

  • Improving the organisation’s ability to innovate, it's the ability to deliver new capabilities that might better serve the customer's needs.

  • Improving the organisation’s time to market or delivery time, it’s the ability to quickly deliver new capabilities, services or products.


The outcome is described as a hypothesis, importantly at its strategic level, it represents an outcome that is worth investing in.


I'm not suggesting, as many others have done, that you ditch OKRs, no. I'm suggesting combining OKRs with EBM to form a better approach, giving a more complete picture.


Remember it doesn't matter how well we're working, how efficient we are, how happy people are with the work within our organisation, if, we don't have a solid view of the actual value delivered to customers and our business.


Measure what really matters - John Doerr

By using both OKRs and EBM we have objectives and key results that we can use within the organisation but we also have the measured delivered value to the market and our organisation.


I think quantified value delivered is one of the most overlooked aspects in my experience particularly in the agile world. Crazy eh since that's what it's all about.


It's not as if it's a secret, it's well known, but sometimes people have hidden agendas, too frightened to talk to customers for fear of what they might say. Madness!

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