…a management methodology that helps ensure that the company focuses efforts on the same important issues throughout the organization

—John Doerr, Measure What Matters [1]

OKRs

Definition: Objectives and Key Results (OKRs) is a collaborative framework for establishing clear goals and measurable outcomes. 

When used within SAFe, OKRs can help to support the Core Values of transparency and alignment between the Enterprise and Portfolio strategy and the work of the Agile Release Trains and Agile Teams to deliver on this strategy. Additionally, OKRs can be applied to measure organizational improvement activities, including the desired outcomes for the SAFe transformation.

While this article describes opportunities to apply OKRs within SAFe, their usage is optional, apart from the strong recommendation to use them to describe portfolio Strategic Themes. If a decision is taken to apply OKRs, these must be applied within an environment conducive to their success. The benefits of OKRs will only be realized where planning and delivery are incremental, ensuring the ability to respond to the continuous feedback that OKRs provide. Enterprises still employing traditional development methods, with an upfront commitment to large batches of work, will often struggle to reap the benefits of OKRs. We will conclude this article with a special caveat where OKRs do not work as well as might have been anticipated.

Details

Since their invention by Andy Grove at Intel and the subsequent, well-publicized adoption at Google in 1999, many leading technology companies have embraced Objectives and Key Results (OKRs). They create aspirational goals that drive higher organizational performance and employee engagement [1].

The simplicity of OKRs goes a long way toward explaining their popularity. The ‘Objective’ defines the business outcome you strive to achieve. The ‘Key Results’ are the measurable success criteria used to track progress toward the objective. For each objective, there are typically between two to five key results. An example of an OKR used to define a SAFe strategic theme is shown in Figure 1.

Writing Well-formed OKRs

Well-written OKRs can effectively align individuals and teams to measurable outcomes, but poorly written OKRs may have the opposite effect. Common anti-patterns include describing business-as-usual activities in place of aspirational goals, focusing on outputs rather than outcomes, and defining key results that describe a list of tasks or deliverables.

In contrast, well-written Objectives have the following qualities:

Inspirational: Each objective should describe an important and worthwhile goal. The objectives should be ambitious and move people out of their comfort zone to strive to achieve more. In short, they should inspire people to act.

Clear and Memorable: Objectives should be written succinctly in clear, memorable terms. Furthermore, there should not be too many objectives; 3-5 is typical. The objective itself should be qualitative and not include numbers. These will come later in the key results.

Committed or Aspirational: Each objective should be marked as either committed or aspirational. Committed objectives describe things that must be done, such as meeting changes in legislation, whereas aspirational objectives are things that we hope we can achieve. We strive to achieve 100% of our committed objectives, while a 60-70% achievement is more realistic for aspirational objectives.

Doing Work or Improving Work: An additional distinction that may be useful is recognizing which objectives are related to developing or incrementing the Solution and which are focused on improving processes. The former is measured with business-orientated key results, while the latter will likely use a combination of SAFe flow metrics. (An example of an improvement OKR is provided in use case 3 below).

Each objective is typically accompanied by 2-5 key results. Well-written key results have the following qualities:

Value-based: Key results should describe desired outcomes rather than the activities that drive these outcomes. Getting this right can be challenging. To move from activities to outcomes, the following questions can be helpful:

• What is the desired impact of this activity?
• How will I know this activity had an impact?
• What is the measurable result I hope to achieve in doing this activity?

Measurable: Each key result should be measurable and accompanied by a target number. Ideally, across all the key results, a mixture of leading and lagging indicators should allow progress to be measured at different times.

Gradable: The key results should also be gradable. In other words, we should be able to measure how much of that outcome has been achieved. This contrasts with key results that have a simple yes or no response. Typical formats for expressing gradable key results include:

• Should increase from X to Y
• Should decrease from Y to X
• Should stay above X
• Should stay below Y

The example below illustrates how applying this guidance to create well-written OKRs helps to move the conversation from output-focused OKRs to outcome-focused OKRs:

Applying OKRs in SAFe

As mentioned previously, the application of OKRs in SAFe is optional. The following three use cases describe potential applications, although this list may not be exhaustive. Consider the benefits they might bring to your organization for each of these. Be mindful that too many use cases implemented at once may create overheads that outweigh the benefits.

The application of OKRs within SAFe falls into three main use cases, illustrated in Figure 3 below:

1. Enhancing strategic alignment across a SAFe portfolio
2. Defining business outcomes for epics and lean business cases
3. Setting improvement goals for the SAFe transformation

Each of these is described in more detail below.

1. Enhancing Strategic Alignment across a SAFe Portfolio

The first use case is to apply OKRs to help with strategic alignment. Strategic themes provide the requisite transparency to ensure this alignment across the value streams and ARTs within the portfolio. SAFe recommends using OKRs for defining strategic themes, as shown in Figure 1 above, as it provides an effective means to define, organize and communicate these critical differentiating business objectives.

Defining Value Stream and ART OKRs

Strategic themes often don’t impact all value streams in a portfolio equally; the work to execute against a particular strategic theme will differ for each value stream. Therefore, it can be helpful to create specific OKRs for each value stream that align with the portfolio strategic themes. And further, for large value streams that contain multiple ARTs, this process can be repeated to create a set of OKRs that define the goals for each specific ART. Figure 4 below shows how these different OKRs work together to provide alignment and transparency at multiple levels.

This approach also allows those at each level of the organization to see the direct impact of their work against the OKR key results. Contrast this with the situation where goals are typically defined only at the highest level within the organization. And in the same manner that portfolio strategic themes influence key decision-making, ART OKRs become a critical tool for Solution and Product Managers, and Solution and System Architects when developing their roadmaps and exploring and prioritizing new opportunities.

OKRs inform Value Stream and Solution KPIs

SAFe Key Performance Indicators (KPIs) provide a set of measures that help to evaluate how a value stream or ART is performing against its forecasted business outcomes. OKRs play a crucial role in informing and defining these KPIs.

NOTE: The difference between OKRs and KPIs: Whereas OKRs define the specific objectives we are working towards to achieve future success, KPIs represent ongoing ‘health’ metrics that can be used to measure overall portfolio and business performance.

Value stream KPIs will be influenced directly by the portfolio strategic themes, which set clear expectations around the key results that must be delivered or supported. (This process is discussed further in the Value Stream KPIs article.) However, as explained above, specific OKRs can also be defined for value streams and ARTs. In this situation, the associated key results can be used to define KPIs for a particular solution that the ART is developing.

The Fulfilment ART, from Figure 4, is developing a ‘delivery notifications and communication platform’ to meet the goals outlined in its ART-specific OKRs. The following five solution KPIs emerge by analyzing the key results of those OKRs.

• Cost per notification
• Time to communication
• Missed deliveries
• Error rates in notifications
• Customer engagement

These solution KPIs not only help to measure the overall business outcomes from the current work but will continue to persist and evolve, separate to additional epics that get defined. In this manner, they provide a higher-level view of whether our solutions achieve their expected business outcomes.

Measuring Progress against OKRs

OKRs provide a means to continually measure progress, allowing the organization to take the necessary corrective actions or amplify successes. Each key result is measurable and should be gradable on an implicit scale, typically a percentage. However, because changes in strategy take time to apply, a quarterly cadence for measuring and reporting against key results is recommended. The Strategic Portfolio Review is the ideal event to reflect on progress. Figure 5 shows a set of key results measured quarterly.

The benefits of having multiple key results attached to each objective should be clear from this example. No single key result can provide the complete picture in isolation. Some improve based on the work done, while others go in the wrong direction. These multiple perspectives provide the inputs required to reflect on necessary changes to the plan.

Of course, getting feedback in this manner requires two critical things. Firstly, the ability to deliver value often and thereby incrementally measure the progress made. This requires investment in the Continuous Delivery Pipeline and the ability to continuously deploy and release value on demand. Secondly, the ability to measure must be built into the solution. For each key result defined, the question should be asked, ‘how are we going to measure this?’ In many instances, this will require solution telemetry, which must be part of the solution development activities.

2. Defining Business Outcomes for Epics and Lean Business Cases

The second use case is to apply OKRs to help to uncover potential Epics for entry into the Portfolio Kanban system, as shown in Figure 6. The question that arises is, ‘What work do we need to do to affect a positive change in the key results we have defined?’ This ensures alignment amongst those contributing ideas and an objective means of either approving or removing ideas from the funnel. Furthermore, for the epics that proceed to implementation, the connection to the strategy is clear for all working on them.

NOTE: Defining strategic themes as outcome-based OKRs in isolation from defining the Epics that will achieve them can often lead to a lack of feasibility in the strategy itself. It is all too easy for aspirations to become disconnected from the capacity and capability of the organization. To prevent this, it is recommended to combine the activity of defining the OKRs with a consideration of the potential epics that might execute that strategy. After all, outcomes can’t be achieved without outputs. Outputs have to come first, and they go hand in hand.

Epic and Lean Business Case Definition

OKRs can also be essential in epic definition, specifically when clarifying the desired business outcomes. The business outcomes are those measurable benefits that the business can anticipate if the epic hypothesis is correct. Applying OKRs to describe business outcomes ensures that they are outcome-focused and quantifiable. An example is shown in Figure 7 below. OKRs used in this manner as part of an Epic Hypothesis Statement or Lean Business Case may also inform portfolio prioritization conversations.

Defining an MVP

The next step in the lifecycle of an epic is to move it through the SAFe Lean Startup Cycle. Here the goal is to define a Minimal Viable Product (MVP) used to prove or disprove the epic hypothesis as quickly as possible. Therefore, the outcomes that this MVP is testing need to be clearly defined and measurable for us to make an appropriate pivot or persevere decision. Once again, OKRs can provide this clarity. The objective defines the expected outcome of an MVP, and the key results represent the conditions that would prove the objective to be true, as shown in Figure 8.

Furthermore, once defined in this way, these OKRs—and those that describe the broader business outcomes—continually inform product management decisions made throughout the entire product lifecycle.

3. Setting Improvement Goals for the SAFe Transformation

The third use case is to apply OKRs to establish outcome objectives for the SAFe transformation itself. This can even establish a hierarchy of outcomes, as shown in the figure below:

In this scenario, the OKRs will predominantly fall into the ‘improving work’ category, typically focusing on improving quality, time to market, and predictability. An example of a single improvement objective and key results is shown below.

Applying OKRs to the SAFe transformation also forces early discussion around expected benefits. This generates the alignment and transparency previously described, and it also creates commitment to the journey that is about to begin.

A Special Caveat: OKRs and PI Objectives

We’ve described three use cases where OKRs can be beneficially applied in a SAFe implementation. And there are many more possibilities. But it’s important to note a specific caveat concerning using OKRs to establish PI Objectives. The standard format for describing PI Objectives is to make them SMART. On the surface, it would seem a simple endeavor to change this to the OKR format. However, there are reasons we caution against this.

1. We must be mindful of the time it would take to write, review, and eventually assess the team PI objectives in the OKRs format. SMART PI objectives can typically be expressed readily in a single sentence or phrase. OKRs are much deeper and take more time to discuss and write. Teams have limited time during PI Planning and drafting OKRs, each with 3-5 key results, leaving less time for more value-added discussions and planning activities.
2. Furthermore, key results often represent lagging indicators and often are not achievable within the PI timebox. This can be a source of frustration while establishing business value at the end of the PI.

So again, while this might be an obvious case for using OKRs, experience has shown them to be the wrong tool for writing PI Objectives.

Summary

The benefits of OKRs in creating alignment and supporting transparency are well documented, and within SAFe, they play a crucial role in defining strategic themes. Over time SAFe enterprises have also seen benefits in applying them in the other scenarios described above. When deciding whether to implement them in these additional ways, the expected benefits need to be carefully considered against the additional overhead in creating and maintaining them.

Finally, it should be recognized that OKRs can also fall victim to the same problems as the more traditional ways of defining outcomes. An organization that struggles to move the conversation to focus on business outcomes will only realize the benefits of OKRs if they ensure they are well-constructed and can measure progress against them on an ongoing basis. However, when done correctly, OKRs provide an effective tool to help drive better outcomes for the business and customers.

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Learn More

[1] Doerr, John. Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. Portfolio, 2018.

Last update: 16 May 2023