{"id":20496,"date":"2022-06-06T06:00:39","date_gmt":"2022-06-06T11:00:39","guid":{"rendered":"https:\/\/blog.planview.com\/4-ways-to-optimize-okrs\/"},"modified":"2023-03-06T14:07:21","modified_gmt":"2023-03-06T20:07:21","slug":"4-ways-to-optimize-okrs","status":"publish","type":"post","link":"https:\/\/blog.planview.com\/4-ways-to-optimize-okrs\/","title":{"rendered":"4 Ways to Optimize OKRs"},"content":{"rendered":"<figure>\n<div class=\"feature-image\"><img decoding=\"async\" class=\"aligncenter size-full\" src=\"https:\/\/media.planview.com\/tasktop_blog\/wp-content\/uploads\/2022\/06\/transformative-okrs_blog-image-850x550.png\" alt=\"4 Ways to Optimize OKRs\"><\/div>\n<\/figure>\n<p><span style=\"font-weight: 400;\">While OKRs are a popular framework for organizations trying to accelerate their digital transformations, traditional enterprises often face challenges when they try to translate their strategic high-level objectives into key results. Last week, Dr. Mik Kersten and Felipe Castro addressed these challenges head-on during a webinar on Transformative OKRs: Translating Business Strategy into Measurable Outcomes.<\/span><\/p>\n<h3 style=\"text-align: center;\"><a href=\"https:\/\/go.tasktop.com\/transformative-okrs-translating-business-strategy-into-measurable-outcomes.html\"><span style=\"font-weight: 400;\">Watch the full OKR webinar here<\/span><\/a><\/h3>\n<p><span style=\"font-weight: 400;\">With hundreds of attendees on the webinar, the Q&amp;A was lively. Below is a recap of the four most commonly asked questions about OKRs.&nbsp;<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/blog.planview.com\/4-ways-to-optimize-okrs\/#How_many_OKRs_should_a_team_have\" >How many OKRs should a team have?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/blog.planview.com\/4-ways-to-optimize-okrs\/#How_are_Flow_Metrics_related_to_OKRs\" >How are Flow Metrics related to OKRs?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/blog.planview.com\/4-ways-to-optimize-okrs\/#What_is_the_fundamental_difference_between_OKRs_and_KPIs\" >What is the fundamental difference between OKRs and KPIs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/blog.planview.com\/4-ways-to-optimize-okrs\/#How_can_Enterprise_IT_create_outcome-based_OKRs\" >How can Enterprise IT create outcome-based OKRs?<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"How_many_OKRs_should_a_team_have\"><\/span><span style=\"font-weight: 400;\">How many OKRs should a team have?&nbsp;<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Can a team work on multiple OKRs simultaneously, or is it better to focus on one OKR at a time?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The answer to this one is, of course, it depends. Teams with too many OKRs risk shifting their focus to activities instead of outcomes. And teams with not enough OKRs may struggle to make the strategic advancements their company needs. So how do you find the right balance?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Conventional wisdom suggests creating three to five OKRs at a time, with at least one <\/span><a href=\"https:\/\/felipecastro.com\/en\/okr\/understanding-stretch-goals\/\"><span style=\"font-weight: 400;\">stretch goal<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">During the webinar, Dr. Mik Kersten offered the insight that here at Tasktop, we set OKRs initially at the product <\/span><a href=\"https:\/\/www.tasktop.com\/value-stream-management\/\"><span style=\"font-weight: 400;\">value stream<\/span><\/a><span style=\"font-weight: 400;\"> level, with a maximum of five OKRs per value stream per quarter.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But the important thing to remember is that OKRs are a framework, and as such, the number of OKRs set for any given team at any given time shouldn\u2019t be prescriptive; it should reflect what\u2019s required for the teams to deliver the strategic objectives of the organization.&nbsp;&nbsp;<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_are_Flow_Metrics_related_to_OKRs\"><\/span><span style=\"font-weight: 400;\">How are Flow Metrics related to OKRs?&nbsp;<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The combination of <\/span><a href=\"https:\/\/www.tasktop.com\/flow-metrics\/\"><span style=\"font-weight: 400;\">Flow Metrics<\/span><\/a><span style=\"font-weight: 400;\"> and OKRs provide visibility, a common language, and a tactical tool to measure incremental progress.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In isolation, neither Flow Metrics nor OKRs can shift the behavior of an organization, but together they offer a <\/span><a href=\"https:\/\/podcasts.apple.com\/us\/podcast\/episode-43-darrell-fernandes-on-driving-organizational\/id1495708805?i=1000554071354\"><span style=\"font-weight: 400;\">complete toolkit<\/span><\/a><span style=\"font-weight: 400;\"> for organizational change. Value stream management measures flow and identifies constraints, while OKRs to set and track goals.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Flow Metrics center around the principle that all software-related work \u2014 design, development, and delivery \u2014 must create value for the business. They are the language that unites business and technology and they measure value through the lens of your internal or external customers.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the <\/span><a href=\"http:\/\/www.flowframework.org\"><span style=\"font-weight: 400;\">Flow Framework<\/span><\/a><span style=\"font-weight: 400;\">\u00ae, Flow Metrics link the rate of flow through a value stream&nbsp; to corresponding business results like <\/span><b>value <\/b><span style=\"font-weight: 400;\">(revenue contributions), <\/span><b>cost <\/b><span style=\"font-weight: 400;\">(expenses related to operating the value stream), <\/span><b>quality <\/b><span style=\"font-weight: 400;\">(the reliability of the product), and <\/span><b>happiness <\/b><span style=\"font-weight: 400;\">(the engagement level of the teams doing the work).&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once you have defined value streams and are measuring them using Flow Metrics, you can build meaningful, outcome-based OKRs. These specific, measurable goals allow product and engineering teams to stay connected to their customers and to measure their contribution to outcomes, not merely their ability to deploy quickly.<\/span><\/p>\n<h3 style=\"text-align: center;\"><a href=\"https:\/\/go.tasktop.com\/how-technology-teams-can-thrive-with-flow-based-okrs.html\"><span style=\"font-weight: 400;\">See examples and tips for creating flow-based OKRs&nbsp;<\/span><\/a><\/h3>\n<h2><span class=\"ez-toc-section\" id=\"What_is_the_fundamental_difference_between_OKRs_and_KPIs\"><\/span><span style=\"font-weight: 400;\">What is the fundamental difference between OKRs and KPIs?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Many organizations struggle to make the shift to OKRs and instead, they simply rename old behaviors. Existing KPIs are&nbsp; renamed OKRs and nothing changes. Teams continue to be micromanaged, Waterfall planning methodologies persist, and managers are encouraged to track&nbsp; activities and dates instead of value or flow.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">OKRs are not simply renamed KPIs. OKRs are the framework that keeps the organization focused on its strategic goals, and KPIs are measurements that fit within that framework.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s an example:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If the Objective is to increase market share, a Key Result associated with this objective could be to achieve $50 million in revenue.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">This OKR could have multiple KPIs associated with it, such as:&nbsp;<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Revenue per business unit or per value stream<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Customer retention rates<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Number of products or features released<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The KPIs associated with the overall business goal (to increase market share) are important to inform which activities will help achieve it. But without an objective to set the overall direction, KPIs can easily become isolated proxy metrics with no&nbsp; link to business objectives.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">During the webinar, Felipe Castro shared the idea that <\/span><span style=\"font-weight: 400;\">adopting OKRs is never the goal. The goal is to improve performance by changing how you work. \u201cIf you\u2019re not changing how you work, you\u2019re missing the point.\u201d&nbsp;<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_can_Enterprise_IT_create_outcome-based_OKRs\"><\/span><span style=\"font-weight: 400;\">How can Enterprise IT create outcome-based OKRs?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There are three concrete steps you can take to create outcome-based OKRs.&nbsp;<\/span><\/p>\n<ol>\n<li style=\"list-style-type: none;\">\n<ol>\n<li style=\"font-weight: 400;\"><b>Understand the starting point: <\/b><span style=\"font-weight: 400;\">Before any substantive change can occur, the first objective should always be to measure baseline flow and establish your organization\u2019s current speed and efficiency.&nbsp;<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>I<\/b><b>mprove flow in service of outcomes: <\/b><span style=\"font-weight: 400;\">Once you\u2019ve created a baseline, you can begin using OKRs to improve flow in specific areas to achieve a business outcome related to value, cost, quality, or happiness. Current Flow Metrics and analytics will help you create hypotheses and make it clear where you should&nbsp; apply resources.&nbsp;<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Incorporate fast feedback. <\/b><span style=\"font-weight: 400;\">A fast feedback loop is an intrinsic component of successful OKRs. The digital natives who pioneered them intentionally created a quarterly cadence because they understood that learning and iteration were crucial to their success. This timeframe synchronizes with typical budget cycles and ensures that teams can run experiments, and course-correct quickly when they need to.&nbsp;<\/span><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<h3 style=\"text-align: center;\"><a href=\"https:\/\/go.tasktop.com\/how-technology-teams-can-thrive-with-flow-based-okrs.html\"><span style=\"font-weight: 400;\">Get advice and best practices for building OKRs with Flow Metrics<\/span><\/a><\/h3>\n<p><span style=\"font-weight: 400;\">In the webinar, Felipe Castro emphasized that OKRs \u201cwill be imperfect in the beginning\u201d. However, using a combination of <\/span><a href=\"https:\/\/www.tasktop.com\/value-stream-management-guide\/\"><span style=\"font-weight: 400;\">value stream management<\/span><\/a><span style=\"font-weight: 400;\"> and Flow Metrics, organizations can create the conditions and structures that connect technology teams to the organization\u2019s strategy. With a shared understanding of the destination, the journey can begin.&nbsp;<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>While OKRs are a popular framework for organizations trying to accelerate their digital transformations, traditional enterprises often face challenges when they try to translate their strategic high-level objectives into key results. Last week, Dr. Mik Kersten and Felipe Castro addressed these challenges head-on during a webinar on Transformative OKRs: Translating Business Strategy into Measurable Outcomes&#8230;.<\/p>\n","protected":false},"author":247,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[9544,9545,9543],"tags":[],"class_list":["post-20496","post","type-post","status-publish","format-standard","hentry","category-project-to-product-shift","category-the-flow-framework","category-value-stream-management"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.8 (Yoast SEO v26.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>4 Ways to Optimize OKRs | Tasktop Blog<\/title>\n<meta name=\"description\" content=\"Curious about the best practices around OKRs? 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