Everything you need to know about using Objectives and Key Results (OKR) as a goal tracking system for your agile teams in Jira.
Chapter 1: An introduction to OKR
OKR is a scalable goal tracking system that aligns company, team, and personal goals to measurable results. It guides everyone to work together in the right direction and drives constant progress.
OKR is sometimes known as a performance management framework. But using OKR solely to manage your agile team performance and compensation is not advisable. More on this in Chapter 4.
What is the history of OKR?
Though it can be traced back to Peter Drucker’s Management by Objectives, the OKR framework that we know today was developed by Andy Grove and first rolled out at Intel.
This goal-setting system gained popularity after it was implemented at Google in 1999 by John Doerr. Now, many successful agile companies like Atlassian and Amazon have followed suit.
OKRs have helped lead us to 10× growth, many times over.
Larry Page, co-founder of Google.
Foreword in Doerr’s book “Measure What Matters.”
What are the components of OKR?
OKR has two main components, which are Objectives and Key Results.
1. Objectives
These are qualitative descriptions of what you want to achieve. Objectives are high-level statements that can motivate (or challenge) your agile teams to deliver their best.
Best practices when setting Objectives:
- Each team should have five objectives at most.
- Objectives are qualitative and aspirational, not granular outcomes.
- If you’re just starting your OKR practice, start with “roofshot objectives,” AKA goals that are hard but achievable. Success means achieving 100% of those goals.
- As your OKR practice matures, graduate to “moonshot objectives,” AKA stretch goals that are beyond what’s deemed possible. Success means achieving 60% – 70% of the OKRs.
2. Key results
These are the quantitative metrics used to measure if you’ve achieved your Objectives.
Best practices when setting Key Results:
- Key results are quantitative and measurable, not to-do lists.
- Each objective should have five key results at most.
Here’s an example of an OKR for a SaaS vendor:
Besides Objectives and Key Results, other components of an OKR are Initiative, Grade (or Score), Period (or Cadence), and Owner.
1. Initiatives
The projects or activities that can help you deliver Key Results.
Best practices when setting Initiatives:
- You may regard your team’s daily tasks as initiatives. For example, if you manage projects in Jira, then Jira issues are the initiatives.
- If the initiatives aren’t helpful in delivering key results, modify them.
2. Period or Cadence
Period is how often you evaluate and grade OKRs during a cycle and create new ones.
Best practices when setting Periods:
- OKR may have dual planning periods: an annual cadence for company goals and a quarterly cadence for team and individual goals.
- Conduct weekly check-in sessions to track goal progress.
- Within less mature organizations, a custom shorter period (e.g., two months) is highly recommended.
3. Grade or Score
OKRs are usually graded on a scale of 0.0 to 1.0, with 1.0 being that an Objective is fully achieved.
Best practices when setting Grades:
- The ideal OKR grade is 60% – 70% (or 0.6 to 0.7).
- Consistently scoring lower or higher than the ideal grade means that the objectives are either unclear or not ambitious enough, respectively.
4. Owner
Assign an Owner to every Key Result to foster accountability, transparency, and proper alignment.
Best practices when assigning an Owner:
- Every OKR must have an owner.
- Though employees can collaborate on OKRs, there’s just one person responsible for reaching the goal.
- Your company’s OKR framework must be owned by someone. This person (AKA the Ambassador) is responsible for its ongoing maintenance and management.
- The Ambassador can be one of the department managers, HR personnel, or even external consultants as long as they’re the OKR Subject Matter Experts.
Why is OKR perfect for agile teams in Jira
When implemented properly, the OKR framework can deliver 5 key benefits: focus, alignment, commitment, tracking, and stretching (F.A.C.T.S.). Now let’s see what F.A.C.T.S. means for individuals, teams, managers, and the company.
By following best practices when setting OKRs for your agile teams in Jira, you and your organization can enjoy the benefits listed above.
Chapter 2: Implementing OKR for agile teams in Jira
Next, we’ll dive deep into the best ways to implement OKRs for your agile teams in Jira. Remember that you’re implementing two things here: the OKR framework in your organization and the right OKR plugin in Jira. We’ve simplified the overall OKR implementation process into a 5-step guide.
Chapter 3: Aligning OKR for agile teams in Jira
Aligning OKR means unifying your company at every level and tying daily activities with the company’s vision. Everyone can then work together on the same business objectives, consistently.
There are three ways to align OKR: top-down, bottom-up, and bi-directional.
1. Top-Down OKR Alignment
This is a traditional approach where high-level OKRs cascade downwards to departments, teams, and individuals. This style is suitable in certain situations: newly established company, large company, team members are unclear about company goals, crisis management.
2. Bottom-Up OKR Alignment
This is when employees come up with goals to steer the organization. It’s perfect in a small company or when employees are absolutely clear about the company’s growth direction.
3. Bi-Directional OKR Alignment
But the best way to align your company and teams using OKRs is through a mixture of both top-down and bottom-up OKR alignment. This means that management comes up with strategic OKRs. Teams then define tactical OKRs that can contribute to those company objectives.
When teams – who are the experts in their respective domains – understand the company’s strategic direction, they’ll be empowered to support them with realistic goals and action plans.
Afterward, link the objectives from different teams and levels for strategic goal coordination.
Here’s an example of a bi-directional OKR alignment for a SaaS vendor:
The key to proper OKR alignment is transparency, where everyone can see how they contribute to the company goals. Simple yet comprehensive Jira OKR management tools like OKR for Jira allow employees to clearly see how company objectives break down into team objectives and the status of each action plan or Jira issue.
To further align goals into daily tasks, the Jira OKR plugin shows how each Jira issue affects the Key Results and Objectives.
Chapter 4: Monitoring and evaluating OKR for agile teams in Jira
To know if the newly established OKR system helps to improve your agile team performance, you must do monitoring and evaluation. Below are the key aspects that you should pay attention to.
Measure OKR Adoption
First, is the OKR system even accepted and used throughout the company? The easiest way to determine the adoption rate is by checking the frequency of OKR updates. Regular updates mean that your staff find it useful in steering their daily tasks towards set objectives.
If you’re using a Jira OKR plugin like OKR for Jira, you can check the latest status updates for all OKRs on the main board that’s visible to everyone. You can also view the detailed updates of each Objective or Key Result on its dedicated page.
Also, check if the issues that you were facing before this (e.g., poor cross-team collaboration) are still happening. Fewer issues mean that the OKR system is adopted well and is helping to solve them.
Track OKR Progress
Once you know that the OKR program is widely used in the company and by your team members, it’ll be easier to track OKR progress. Here, you can again rely on the same Jira OKR app stated above to clearly monitor the progress of each Objective and Key Result. As for the Initiative, you can track its status (e.g., To Do, In Progress, and Done) just like you would with a Jira issue.
If an OKR period is the frequency you review OKRs, check-in means tracking goal progress as well as analyzing and mitigating risks. You should have a regular (i.e., weekly) 1:1 check-in session with your team members. Once that’s done, update the OKR dashboard.
Review and Grade OKRs
As you’re nearing the end of your OKR period, you should review and grade the goals. To establish grading criteria for your OKRs, you must first grade your individual Key Results. Then use the average score to determine your overall OKR grade. From there, you can decide if you’ve achieved the goals and can proceed to create new ones.
Remember that using the grade of your first OKR period as a benchmark is an inaccurate practice. This is because a newly-set OKR system needs a few cycles to stabilize and perform according to your team and company needs. So, always take the time to carefully review and modify the OKRs in a way that can best motivate your team members to achieve shared company goals.
Here’s an example of OKR grading criteria:
Using OKRs for Employee Appraisal
Using OKRs for employee performance appraisal alone is not advisable because OKR is mainly intended to be a goal alignment tool. The last thing you want is your team members setting low objectives (and obviously achieving them) to reap the benefits of good performance.
That said, you should use OKRs together with other evaluation factors like Jira metrics and overall workplace behaviors when managing team performance.
Conclusion
Congrats on making it to the end of our definitive guide!
OKRs can be a great goal tracking system for your agile teams in Jira. The key is to always align OKRs throughout your organization. And then, continuously monitor and evaluate them so that you can keep what’s working and change what’s not working.
Last updated: 2023-07-31
Appfire
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