TIAA, a Fortune 100 financial services organization, manages investments for more than six million clients, totalling more than 1.3 trillion dollars. According to Darrell Fernandes, the Head of Product Technology, the company’s success boils down to its operational strength — an area which Darrell is continuously improving.
In Episode 43 of the Mik + One Podcast, Dr. Mik Kersten, founder and CEO of Tasktop, talked with Darrell about how he uses a combination of OKRs and value stream management (VSM) to propel productivity at TIAA.
For Darrell, the goal of implementing OKRs and VSM was to improve operations in order to delight customers and cultivate lifetime income. A bonus side-effect of the improved efficiency TIAA achieved was employee engagement. Staff felt more connected to the customers they served, which boosted their engagement.
If you’re struggling to drive improvements with OKRs in your organization or wondering where to begin, here are three key pieces of advice from Mik and Darrel’s discussion:
1. Design OKRs based on value and flow
It’s important to have a firm foundation and a plan before beginning any widespread organizational change. At TIAA, Darrell implemented an IT product model in which each team can clearly connect its work to the value it delivers to customers, whether those customers are internal or external.
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Decisions at TIAA are guided by the company’s mission: to provide lifetime income for all, with investments that build a better world. This inspirational mission is realized by three key value-drivers: leading with lifetime income, delighting clients, and strengthening operations. A company-wide understanding of these value drivers helps team leaders align OKRs with business goals.
All 300 of Darrell’s teams are now using OKRs and measuring flow, but this wasn’t always the case. Before beginning the transformation, Darrell needed to understand what was going on in his company, so he used Tasktop’s VSM tool, Planview Viz®, to gain visibility into their existing value streams. The transparency afforded by Viz helped him understand the opportunity and design objectives accordingly. “The tool brought so much to light in the art of the possible,” says Darrell.
Viz also provides a baseline from which to measure improvements in flow. It records metrics such as flow efficiency, flow velocity, flow distribution, and customer happiness, which keep teams focused on what really matters: outcomes and flow.
2. Start small and use metrics to manage risk
One of the biggest obstacles to introducing OKRs is fear of failure. The change requires full organizational buy-in, and it is therefore essential to gain trust and spark enthusiasm at every level of the business. .
According to Darrell, a “lack of psychological safety leads people to focus on details like dates and proxy metrics. People like having things to measure, but not all measurements lead to outcomes.” At TIAA, the visibility and transparency supplied by value stream management practices helped manage risk perception and calm anxieties about change. The Viz dashboard revealed what was really going on in the business, presenting metrics and visuals that everyone can understand, so that all stakeholders could evaluate the impact of OKRs on flow and value delivery.
When the opportunity for change arises, Darrell’s advice is to start small, testing OKRs for one team or one product before scaling to the rest of the organization. Although it’s slightly more work to gradually introduce something new while maintaining old goal-setting mechanisms, starting with a small sample size will fuel support for the change. When others witness the success and engagement of the teams using OKRs, they will be more inclined to adopt the practice in their own teams.
3. Celebrate achievements in outcomes and flow
Organizational change is a team sport. For OKRs and value stream management to be successful, every employee should be able to see the benefit of change, both for themselves and for the customers they serve. Connecting employees with their customers in this way boosts engagement, while also challenging leaders to consider what kind of work is praised and which achievements are celebrated.
It’s easier to get team members enthusiastic about flow if the right achievements are celebrated. Avoid the tendency to measure proxies for success, like dates, times, and budget, and instead measure flow and substance. According to Darrell, shifting focus from proxies to outcomes involves a change in vocabulary: .
Focused on proxies | Focused on outcomes |
Are we on time? Are we on budget? Did we complete the features that we said we would? Did we complete Agile ceremonies as scheduled? | Are we delivering value efficiently? Are we delivering the outcome we need? Was this feature necessary to deliver the desired outcome? Is our current level of output sustainable in the long term? |
While the main effect of focusing on outcomes is improved efficiency and effectiveness, an added benefit is that employees are more connected with customers and, as a consequence, more engaged with their work. “If we save a dollar by doing something with technology, that dollar goes right to our customer,” says Darrell.
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According to Darrell, operational strength is a cornerstone of success. Strong automations, integrations, and visibility put other business goals – like delighting customers and cultivating lifetime income – within reach.
Furthermore, operational efficiency creates a culture of flow, which promotes engagement and talent retention. Every bottleneck and dependency is a burden that hinders talent from flourishing, but when OKRs and value stream management are introduced to remove the burden, employees are happier, more productive, and motivated to support change.
Darrell successfully implemented and scaled OKRs by prioritizing flow, starting small before scaling, and celebrating meaningful outcomes. He managed others’ perceptions of risk by presenting the evidence and transparency afforded by the value stream management practice, thereby gaining the support necessary to turn an idea into an organization-wide transformation. He proved that with patience, planning, and the right tools, enterprises really can do more with less.
