Yuval Yeret

The story of Capital One laying off hundreds of people in Agile roles is making the rounds. I have no direct connection to Capital One, so I can’t comment about what’s going on there. I'll just say that based on what I hear from people who've been involved, the reality is more complex than it seems on the surface. Check out my thoughts about the future of agile roles and agility in general.

Many organizations struggle with OKRs (Objectives and Key Results). Let's explore how agility principles and practices such as Scrum can help us use OKRs to improve alignment, focus, empowerment, and empiricism in our organization.

Many organizations are trying to improve the alignment between strategy and execution with the OKRs framework (Objectives and Key Results). There’s good intent there, but more often than not, looking under the hood, you notice:  OKRs that look more like tasks than strategic objectives – especially by the time they reach working teams OKRs are used to micro-manage teams and individuals rather than empower and enable them.  Too many OKRs are set without any respect/consideration of the ability to deliver them sustainably while dealing with other work in the organization. Defining OKRs and then forgetting about them until it's time to grade them. (Even worse, some organizations don’t even bother with a serious consideration of how they did on their OKRs…)  These are smells of "OKR Theater" or "OKRs in Name Only."

In this article, I’ll explore the need for and the attributes of an agile business operating system related to Private Equity (PE) portfolio companies. It hopefully helps leaders of such companies and PE professionals focused on the operations side expand their perspective on what “Agile” and "Agility" mean in their world and how they can help them improve returns realized in their investments. 

Are Scrum Masters here set up for success? Are they “leaders who serve”? Which of the Professional Scrum Master choices/stances can they choose from? Are they a core aspect of our organization's approach to leadership/management? Are they an afterthought to get a higher score on an agile maturity assessment or some RFP? Are they respected, and appreciated by the people they serve? Are they in high demand? Implementing the Scrum Master accountability effectively is hard. It ties straight into creating a servant leadership and self-managemement/empowering culture in which business agility thrives. These are some of the questions leaders should be asking and thinking about.

If you are an agile leader - do you know whether your teams are currently operating at a sustainable pace? Do you care? Would you rather not know because you’re afraid of the answer? 

Aligning Scrum Team Topology to Strategy with OKRs and Product Goals Yeah, I know. Could I squeeze more buzzwords into the title? I guess I could include Digital Transformation, Cloud, AI, and Machine Learning for effect. But seriously, I wanted to share some insights around how to align your Scrum Teams to your strategy leveraging OKRs and Product Goals. Driving Change Using OKRs We maintain performance by tracking the health of Key Performance Indicators(KPIs). We use Objectives and Key Results (OKRs) to drive performance change. Objectives point towards the desired state. Key results measure progress towards that desired state. This performance change could be about our product or the ability to innovate/create that product. (Gap between realized and unrealized value / ability to innovate in evidence-based management (EBM) terms) By setting OKRs we’re typically setting our sights on a complex problem – the space where Scrum and Empiricism thrive. Achieving OKRs using Empiricism and Scrum Working in self-managed empowered multi-disciplinary teams using fast feedback loops is a great way to tackle complex problems. This is true regardless of how much IT or technology is involved. We might have an OKR that requires business change involving mainly legal, marketing, procurement, HR, and so on, that would still benefit from using Scrum’s empirical team-based approach. For example, if a health care provider is aiming to digitize their patient journey to streamline it and make it more efficient, part of that will be to implement an electronic medical records system (EMR). But the objective isn’t just about implementing an IT system. It’s a change in the operating model. The organization supports this change by the development of new procedures, systems, and capabilities. Focusing on Outcomes rather than Outputs OKRs and Scrum are both designed to focus on outcomes over outputs. Most agile practitioners would recognize the N from “INVEST in User Stories” which stands for creating Negotiable user stories that provide optionality/flexibility for learning about what’s the best way to achieve outcomes. Having said that, most agile practitioners do feel like user stories are a form of requirements – meaning they are required. Actually, user stories, any other form of Product Backlog Items, and even the Sprint Goal should be considered options – meaning they are optional. We currently think they are valuable, but we might learn of more valuable things to focus on. Even the Product Goal is just an option. Maybe there we will find a better Product Goal for the Scrum Team to rally around or maybe there’s another better Goal that requires a different team topology. Be Agile about your OKRs Similarly, OKRs reflect the strategic direction at a certain point in time. We might learn something that would suggest a change in the Key Results or even the Objective itself. The frequent transparency provided by sprinting towards an OKR enhances the empiricism that might drive these realizations and is an enabler for strategic agility. Many organizations fail to see this perspective. They consider OKRs as if they’re set in stone. The same sort of time, budget, scope-oriented project management mindset that is hampering so many agile teams is affecting OKR implementations as well. The problem with activity/output-based OKRs Many OKR practitioners struggle to figure out how to break an annual strategy/OKR into meaningful outcome-oriented quarterly OKRs. By default, they break the big outcome into implementation steps a.k.a activity/output/milestone OKRs. It’s the project management mindset again – we basically bring in the classic work breakdown structure (WBS) into the OKR framework. Going back to the patient journey digitization effort. Many organizations would define an initial OKR of choosing an EMR system. This is an example of an activity. It doesn’t deliver business value on its own. Once we set this OKR it’s harder to think of alternatives that might obviate the need for an EMR system in order to achieve the desired outcomes. We’ve seen it happen countless times on agile teams struggling to slice stories in a meaningful manner and not sure how to come up with a useful Increment at the end of a short Sprint. When working with OKRs we can leverage the same techniques that help these agile teams identify valuable partial outcomes that enable us to inspect and adapt our tactical and strategic direction. Organizing Around OKRs Another common reason why we see output-based OKRs is the team topology. We often see organizations defining OKRs and then mapping them to their existing teams. In this example, this will mean cascading OKRs throughout different IT and business functions. The cascaded OKR grows farther and farther away from the desired Outcome because functions/silos can’t deliver these outcomes. They can only deliver outputs. Hence, the prevalence of Output-based OKRs. After we define these OKRs the different functions will, of course, try to collaborate but we know how hard it is to collaborate effectively across functions. And with each group focused on an output-based OKR, we lose the opportunity to align around outcomes and are back to managing “projects”. This might work fine for some OKRs. But some OKRs are simply too complex to successfully achieve this way. OKR-Driven Team Topology A better approach might be to consider the level of complexity each OKR exists in. Then, create focused cross-functional Scrum Teams around the most complex OKRs. You might call this “OKR Driven Team Topology”. Each one of these teams would focus on an OKR and have that as their Product Goal. Their Product Owner would have ownership of the OKR. This team would be THE team to talk to about this OKR. If an OKR requires more people than would fit one Scrum Team consider forming a Nexus (or any other agile team of teams structure) around this Product Goal. Or maybe you can split the Objective and have separate Scrum Teams working on each Key Results (KR). There are multiple possible topologies. The key point is to try and keep the outcome orientation all the way to the trenches where people work to create usable valuable Increments. In your Sprint Review, Inspect the Increments created with an eye towards your OKR. Adapting might mean changing tactics of how to achieve the OKR or even changing the Key Result or the Objective itself. OKRs and Focus The approach I laid out above is the ultimate way to achieve focus on one strategic outcome. Realistically, not all OKRs would map 1:1 to a team or Nexus. And that’s ok. For example, you might have 20% of your most complex/critical OKRs handled using dedicated teams with the rest of them mapped to existing teams/functions. If that’s the approach you’re taking, make sure you’re limiting the amount of OKRs that map to each team in each time period. For example, set an “OKR in Process” limit of 3 per team per quarter. And when a team hits the limit, don’t set the OKR for this quarter. This will drive a tough but important conversation about priorities. But it will set the teams and therefore the organization for a better chance to actually deliver on the strategic outcomes that matter the most. Having 3 OKRs per quarter that you actually achieve is much better than 6 OKRs per quarter that drag on from quarter to quarter. NOTE: You might find it useful to start tracking flow metrics (WIP, Flow/Cycle time, Throughput, Aging) as they relate to your OKRs… When to organize around outcomes with OKRs and Scrum In this article, we explored the relationship between OKRs, Scrum, the teams’ topology and outcome/output-oriented OKRs (and teams!). A key step in accelerating agility is to continuously assess whether you’re optimally organized around value. OKRs can provide a very useful lens to use for this assessment. This is the time of the year when many of you are drafting your annual OKRs. Take this opportunity to consider whether your current team topology (in IT/technology and beyond!) is well-positioned to achieve these OKRs. Another opportunity to use this lens is If you’re currently trying to figure out what your Scrum team topology should look like (e.g. when starting your agile journey, extending or accelerating it). Considering your strategic focus via OKRs is a great perspective to consider in this process. A discussion about Strategy/OKRs and how they map to team topology is now a core part of my conversations with clients and our implementation strategy workshops. Are you trying to figure out how to connect OKRs and Scrum in a way that organizes around outcomes? Feel free to reach out and we can discuss how I might be able to help.

Leaders use the Scrum Artifacts as a window into the work of the Scrum Team. This transparency enables inspection and adaptation at the appropriate level while enabling the team to self-manage. 

It's time to look at the Scrum Events In previous posts in the Scrum Guide for Leaders series we explored what Scrum means for Leaders, using the Scrum Values to create a Scrum-friendly culture, and how to effectively support the Scrum roles/accountabilities. Next, we turn to the Scrum events. Leaders should understand the Scrum Events, participate and not participate as needed. The Sprint The Scrum Team performs all work within Sprints. Sprints enable predictability and empiricism. Leaders should help their teams balance the risk of a long Sprint Horizon with the overhead and stress of too-short Sprints. During the Sprint Leaders help protect the team from distractions. Sprint Planning Sprint Planning is where the Scrum Team collaboratively plans their Sprint based on priorities set by the Product Owner. The Scrum Team discusses 3 topics - Why is this Sprint valuable? What can be Done this Sprint? How will the chosen work get done? The Scrum Team commits to a Sprint Goal and provides a Sprint Forecast. The Sprint Goal, the Product Backlog items selected for the Sprint, plus the plan for delivering them are together referred to as the Sprint Backlog. As Stakeholders, Leaders don’t usually participate in Sprint Planning (unless they are also members of the Scrum Team). They are welcome to work with the Product Owner to influence the direction of the Scrum Team while supporting the Product Owner’s vision and Product Goal before and after Sprint Planning. Leaders use the transparency of the Sprint Goal and Sprint Backlog to gain an understanding of where the Scrum Team is focusing and what to expect to see in the Sprint Review. They should avoid diving into the details of the Sprint unless the Scrum Team asks for help. Often Leaders find it hard to leave the Scrum Team to work as they see fit and often ‘offer’ help. Help can be perceived as managing the Scrum Team, which ultimately will discourage self management. The Sprint Plan is a forecast provided by the Scrum Team. Some Leaders use this commitment is judge the Scrum Team. You should avoid this, as the more complex the work the more uncertainty exists. The commitment is for the Scrum Team to do their best to deliver the Sprint Goal, or to learn if this goal is unachievable. Daily Scrum The purpose of the Daily Scrum is to inspect progress toward the Sprint Goal and adapt the Sprint Backlog as necessary, adjusting the upcoming planned work. It is a 15-minute event for the Developers of the Scrum Team ... If the Product Owner or Scrum Master are actively working on items in the Sprint Backlog, they participate as Developers. Leaders generally don’t participate in the Daily Scrum. In general, the Daily Scrum is just for people who are involved in the work of the Sprint. Others are considered a distraction. The people doing the work should focus on the work and solving problems rather than providing status updates or posturing. Leaders should help the Scrum Team with removing impediments rising out of the Daily Scrum that require their involvement. Sprint Review The purpose of the Sprint Review is to inspect the outcome of the Sprint and determine future adaptations. The Scrum Team presents the results of their work to key stakeholders and progress toward the Product Goal is discussed. During the event, the Scrum Team and stakeholders review what was accomplished in the Sprint and what has changed in their environment. Based on this information, attendees collaborate on what to do next. The Product Backlog may also be adjusted to meet new opportunities. The Sprint Review is a working session and the Scrum Team should avoid limiting it to a presentation. The success of a Sprint Review is determined by who’s there and how they show up. Leaders can help the Scrum Team get the right people to the Sprint Review and coach stakeholders in what’s the effective way to behave in this very valuable opportunity to Inspect and Adapt the direction of the Scrum Team and the Product. In some cases the Leader will also be a real stakeholder themselves and this can provide them with the key opportunity to inspect how the team is doing and engage with them directly. This is also an opportunity to demonstrate the values that Scrum encourages such as Openness and Respect. Leaders have a role in making sure that Stakeholders understand the scope of their influence in the Sprint Review and the fact that it is a feedback meeting. The Product Owner might (or might not) adapt the Product Backlog based on the discussion in the Sprint Review. Sprint Retrospective The purpose of the Sprint Retrospective is to plan ways to increase quality and effectiveness. The Scrum Team inspects how the last Sprint went with regards to individuals, interactions, processes, tools, and their Definition of Done. Inspected elements often vary with the domain of work. Assumptions that led them astray are identified and their origins explored. The Scrum Team discusses what went well during the Sprint, what problems it encountered, and how those problems were (or were not) solved. The Scrum Team identifies the most helpful changes to improve its effectiveness. The most impactful improvements are addressed as soon as possible. They may even be added to the Sprint Backlog for the next Sprint. While the Leader doesn’t participate in the Sprint Retrospective they should be in the background to support it. They can serve the Scrum Team by helping them implement improvements that span beyond the Team’s scope of control or even owning such improvements. The Leader can create an environment of continuous improvement that will encourage the Scrum Team to invest in improving how they work. Summary While Leaders aren't mentioned explicitly they can serve their teams by creating the environment in which effective Scrum events take place, with the right people and the right mindset. Without the Empiricism enabled by Transparency, Inspection and Adaptation on Scrum events, Scrum is but just a mechanistic theater. Leaders enable the team to have a Sprint Planning event in which they are empowered to figure out a realistic and sustainable Sprint Goal. They gain an understanding of direction via the Sprint Goal. This enables them to communicate with other stakeholders about the work of the team. (as they might be expected to do). Leaders don't participate in Daily Scrum and don't need to actively inquire about what takes place in them either. The Scrum Team will reach out to the Leader if there's an impediment that requires their involvement. Leaders can participate in the Sprint Review as a Stakeholder, gain visibility to where the Product is based on the Increment, and provide feedback that will be considered by the Team and the Product Owner (but not necessarily adopted as such). They have even a bigger role in enabling an effective Sprint Review by working with other Stakeholders to create an environment of empiricism and respect/self-management. Leaders serve their teams by helping them implement improvements that span beyond the team's scope of control. They might take ownership of such improvements. They create the cultural conditions where continuous improvement work is a first-class citizen in the organization's work plans and capacity allocations. In addition, Leaders should look at other events they're asking members of the Scrum Team to participate in and experiment with how to minimize waste and duplication. Classic Status Meetings could be replaced more effectively by Sprint Reviews for example. In our final chapter of the series, we will turn to the Leader's role in enabling empiricism via the Scrum Artifacts. This article was originally published on AgileSparks.com

We started the Scrum Guide for Leaders series with a discussion of what Scrum means for you as a Leader. Next, we discussed the conditions where Scrum's Empiricism, Self-Management, and Continuous Improvement can thrive. We then explored some concrete examples of how adopting the Scrum Values as a Leader can help you create these conditions.