Quarterly OKRs for Agile Teams — How to manage stakeholder expectations under changing circumstances

In January of 2018, MAQE introduced Quarterly OKRs into its Agile practice. Layered atop the existing Agile process, Objectives & Key Results (OKRs) provide a simpler and more direct way for business stakeholders to assess the return on investment that their technical teams achieve each quarter. In this post, we explain our rationale for adopting this approach. And we’ll also show how you might go about implementing Quarterly OKRs in your own Agile practice.

Agile teams are typically tight knit and laser focused. And they have roles, ceremonies, and artifacts designed to keep them that way. And yet Agile teams don’t exist in a vacuum. Like the rest of us, they have stakeholders — influential people who may or may not be directly involved in their work.

In this setting, it’s usually the Product Owner’s (PO) responsibility to act as a liaison between the Agile team and its stakeholders. It’s up to him or her to balance the disparate needs and priorities that s/he encounters. And it’s up to him or her to set and manage expectations.

At MAQE — the digital consultancy for which I am the CEO — we often enter into multi-year engagements. This is important for several reasons, not least because it means that we, over time, interact with a variety of stakeholders from all over our customers’ organization.

Some of these stakeholders will be familiar with the rhythms and routines of Agile. But in our experience, most will not. And in these cases, the roles, ceremonies, and artifacts that we observe are of little use. Indeed, they can actually hamper communication, much less aid it.

And so we’re left with a dilemma: How do we ensure that stakeholder expectations do not fall out of sync when said stakeholders enjoy but superficial insight into our actives? And how do we ensure they stay aligned even as circumstances change, as they are bound to do?

In search of a new paradigm

A few months ago, I was asked by a long-term client to help him quantify the value we had delivered over the past 12 months. He needed numbers, basically, for an upcoming board meeting. And so we put our heads together, calculated the returns, and made everyone happy.

All was well, but I still left the endeavor thinking that there must be an easier and more proactive way to do this. And so together with a few colleagues, I went looking for a strategic planning tool to compliment our Agile practice. And to guide our search, we decided on the following search criteria:

• Non-technical for everyday business use — We wanted the tool to be accessible to both technical and non-technical stakeholders.
• Simple enough to allow for co-creation — “Tell me and I’ll forget. Teach me and I’ll remember. Involve me and I’ll understand”.
• Focus on outcomes rather than deliverables — A hallmark of Agile. And besides, we wanted to focus on Return on Investment (ROI).
• Timeboxed on a scale of 3 months or more — Short enough to be manageable, long enough to deliver on sizable initiatives.

Fast forward a couple of weeks and our answer arrived in the form of a three-letter acronym: OKRs. Short for Objectives & Key Results, OKRs is a framework for defining and tracking objectives and their outcomes made famous by companies such as Intel, Google, and Facebook.

Not only does OKRs fulfill the above search criteria, it’s also well documented online (e.g., okrexamples.co). And for us, it had the additional benefit of being intimately familiar; MAQE already runs on OKRs, as does our professional development initiatives.

Shared understanding, mutual agreement

The introduction of Quarterly OKRs adds a strategic business process atop the existing Agile workflow. And while this might sound bureaucratic, we’ve think it worthwhile. Agile is great for keeping teams productive over the long term. The OKRs are there to manage expectations outside the team.

To be clear, Quarterly OKRs does not replace Agile, it complements it. And it does so by giving non-participating stakeholders (e.g., business executives, financial officers, and even select end-users) the information they need to assess the return on investment achieved each quarter.

But that’s not all. The team benefits as well. Because the nature of OKRs are such that they force business stakeholders to make clear exactly what they need to achieve and by when. And to help illustrate that point, consider the following examples:

OKRs are useful because they are clear. Vague or incomplete goal definitions (e.g., launch version 1.5 before holidays) leave too much to the imagination. Launching in and of itself means little in terms of business value. So let’s set expectations regarding that value up front.

This is especially important for MAQE. As a service provider, we need this level of clarity because we need to know that the value we provide surpass the cost we incur. And our customers need that clarity in order to determine that we do. It’s a win-win.

Quarterly OKRs for Agile Teams

In January of 2018 we started to invite our longterm customers to quarterly half-day planning sessions. The sessions are run by a facilitator and include the entire Agile team along with all primary stakeholders. And while the exact agenda might vary, it looks something like this:

• 09:00–09:45 — Past Quarter OKRs in which the team (lead by the PO) recaps the OKRs and the progress made towards them. This is also a good time to make use of all the feedback collected during team retrospectives. This to help explain what happened and how things might improve.
• 10:00–10:45 — Next Quarter Objectives in which the facilitator asks the participants to (1) define as many ideas/objectives as possible, (2) group those objectives into logical categories, and (3) vote on the categories they think will provide the most business value.
• 11:00–11:45 — Next Quarter Key Results in which the facilitator guide the participants through an exercise in which they collaboratively work to define quantitative (and realistic) key results for each of the objectives previously identified as providing most value.

At the end of the half-day session, we have 3 to 5 qualitative objectives, each with 3 to 5 quantitative key results. Importantly, we also have a mutual agreement for these OKRs — an agreement based on a shared understanding of where we are and where we are going in the next 3 months.

For us, the key activity — the key question — comes at the end of the half-day session: If we are able to achieve 70 percent of the agreed upon OKRs, are we delivering more value than the cost we’ll incur? If yes, we’ve done our job well. If no, we need to restart the process.

To be fair, this question isn’t always easy to answer. But it’s absolutely vital. And it does get easier. Besides, once you’ve done it a few times, you’ll wonder how you ever got along without it. Quarterly OKRs force a discussion that needs to happen but that is too often overlooked.

So there you have it: Quarterly OKRs for Agile teams — a necessary business process layered atop the Agile workflow. For more information about Agile, I recommend watching Henrik Kniberg’s superb video introduction. And for information on OKRs, please see Awesome OKRs on GitHub.