Stop estimating value.

Start delivering it:

Agile goals with OKR

Felipe Castro www.leanperformance.com

Silicon Valley
is coming
Two Models
How do you see your target?

@meetfelipe
 Plan-Driven Vs. Value-Driven

Long Feedback Short Feedback

Cycles cycles
Deterministic Iterative
Command&Control Aligned Autonomy
Opinions Data
Tasks Experiments
 Different levels of uncertainty

“Delivery”
Waterfall Agile
@meetfelipe
It's everywhere
Using Agile to deliver
Waterfall Goals has
limited benefits.

@meetfelipe
The Feature Factory
 “Teams today are all too
often feature factories, with
little regard for whether the
features actually solve
business problems.”
Marty Cagan,
Silicon Valley Product Group

@meetfelipe
70%
of Scrum practitioners

Report tension between

their teams and the rest
of the organization.

State of Scrum Report, Scrum Alliance

@meetfelipe
Static Annual Planning

@meetfelipe
The Planning Fallacy
 Daniel
Kahneman
Nobel Prize
Winner
 The Planning Fallacy
We underestimate the time,
costs, and risks of future
actions.
While overestimating the
benefits.
@meetfelipe
 “The only way
it's all going to go
according to plan
is if you don't
learn anything.”
Kent Beck

@meetfelipe
We need to evolve
How Silicon Valley
sets goals?
 OKR
Objectives and Key Results

@meetfelipe
Created by Intel
Agile Goals
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Simplicity
 Adopted by
Google in 1999
Who is using OKR?

@meetfelipe
John Doerr
Doerr’s Goal Formula

I will ____ as measured by ______

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Doerr’s Goal Formula

I will (Objective) as measured by (this

set of Key Results)

@meetfelipe
OKR: Components
1.Objective: An inspirational and memorable
qualitative description of what we want to
achieve.
•Short.
•Fits the team’s culture - Don’t have to be
boring.

2.Key Results: How are we going to measure

our progress?
•2-5 per Objective.
•Quantitative & Measurable.
@meetfelipe
OKR: Example
Objective: Delight our customers

Key Results:

•Increase Net Promoter Score to 52%.

•Reduce revenue churn to 1%.
•Increase average weekly visits to 3.3 per
active user.
•Increase non paid (organic) traffic to 80%.
•Increase engagement (users that complete a
full profile) to 75%.
@meetfelipe
Transparency
Nested Cadences
Strategy, tactics and operations
move at different speeds. @meetfelipe
Nested Cadences
High level strategic OKRs
for the company

Quarterly Tactical OKRs

for the teams

Regular ceremonies
for tracking results

@meetfelipe
Bidirectional
Taking Agile and Lean
to the next level @meetfelipe
Moving from features
to value 1
Loosing my religion
The Agile Manifesto
is Wrong
Agile was created for managing
software projects.

As such, it is focused on
managing deliverables (user
stories or features).
@meetfelipe
The often forgotten column

John Cutler
@meetfelipe
 There are no
ceremonies for
tracking results.
The First Mistake

“Working Software”

Is not the same as

“Valuable Software”

@meetfelipe
“Working software is the
primary measure of
progress.”
Agile Manifesto

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 ✘
“Working software is the
primary measure of
progress.”
Agile Manifesto

@meetfelipe
“Our highest priority is to
satisfy the customer
through early and
continuous delivery
of valuable software.”
Agile Manifesto

@meetfelipe
What is Value?

@meetfelipe
 Value is
measured after
delivery

@meetfelipe
Value is
like a joke @meetfelipe
 “The key to [defeating]
waterfall is to realize that
agilists value Outcomes over
Features. What really
matters is the overall
outcome, which I think of as
value to the customers.”
Martin Fowler
(2006) @meetfelipe
OKR can be
misused

@meetfelipe
Choosing your Key Results

Activity-based Value-based

@meetfelipe
Value-based Key Results
Measure the delivery of
value to the organization or
the customer.

@meetfelipe
 Activity Key Results Value-based Key Results
• Generate 1000 Marketing
Qualified Leads.
Develop 3 new landing • Increase lead conversion from
pages 5% to 8%.
• Reduce Customer Acquisition
Cost from $25 to $20
• Reach 500.000 Daily Active
Users of the free version.
Launch new product • Achieve 5% conversion rate
from free to paid users.
• Achieve a Net Promoter
Score of 35%.

@meetfelipe
@meetfelipe
OKR helps to create a culture
focused on measuring and
delivering business value.

@meetfelipe
 “If a feature idea doesn’t
speak directly to one the
OKRs, it’s generally off the
list.”
Marty Cagan, Silicon Valley Product
Group

@meetfelipe
Delivering a project is not
enough. The project must
be delivered successfully.
If we are successful with
(this initiative),

we will:
(Key Result #1)
(Key Result #2)
(Key Result #3)
…
@meetfelipe
 If we are successful with
the new campaign,

we will:
Increase NPS from 29 to 31%
Reduce churn from 3.2 to 2.7%
…
@meetfelipe
 Activity #01:
Creating one OKR
Talk to your neighbor

•Create one Objective with up to 5 Key

Results for one initiative you are working on.
Abandoning the 2
IT Mindset
 “If you’re just using your
engineers to code, you’re
only getting about half their
value.”
Marty Cagan,
Silicon Valley Product Group
@meetfelipe
 IT Mindset

Vs.

Product Mindset
 Building the
Product Right

Vs.

Building the
Right Product
@meetfelipe
@meetfelipe
 Serving the
stakeholders

Vs.

Serving the
customers
@meetfelipe
@meetfelipe
Measured
by Projects
Vs.
Measured
by Value @meetfelipe
Requirements
gathering

Vs.

Product
discovery
@meetfelipe
@meetfelipe
 Engineers
exist to code

Vs.

Engineers help
create great
products
@meetfelipe
@meetfelipe
Siloed Vs. Cross-functional

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@meetfelipe
From Delivery To Value

Definition
of Done
Success
Criteria
Acceptance
(OKRs)
Criteria

@meetfelipe
 “Every week you get to tell us
what’s most important to you,
and we’ll tell you what we think
we can accomplish.
A week later, you have it in
your hands. […] You could ship
it out if you want to.”
Ron Jeffries
(2016) @meetfelipe
Roadmap?

Velocity Rules! @meetfelipe

Velocity in the wrong
@meetfelipe
@meetfelipe
direction is waste.
Moving from opinions
to experiments

3
 Decision by Committee

Personal Opinions

HiPPO
Commissioned Study by Forrester Consulting
@meetfelipe
 Ronny Kohavi
Amazon, Ex-Director,
Data Mining &
Personalization
Microsoft, General
Manager, Analysis &
Experimentation
“Humbling Statistics”
•Only 1/3 of ideas created a statistically
significant positive change.
•1/3 produced no significant difference.
•1/3 created statistically significant negative
change.

•In general, 60-90% of ideas do not improve

the desired metrics.

@meetfelipe
Projects and features are
experiments

….with a low success rate

The Second Mistake

Estimating Value

Is not the same as

Delivering Value
Backlog The HiPPO prioritizes….

“Stakeholder”
With a margin of error
of 60-90% @meetfelipe
The Flawed Assumption
Behind Scrum
The Flawed Review

“Yes,
Teams: your job is done. This
Teams: “How
Teams: “How can
“How can we
can we contribute
we contribute
contribute
is
to what our users need.
to the
to the company
the company OKRs?
company OKRs? Which
OKRs? Which
Which
We
KRs know this because we make
KRs we
KRs we may
we may impact?”
may impact?”
impact?”
more money than you.”

“Stakeholders”
@meetfelipe
Teams don’t need somebody to
be the “Voice of the Customer.”

@meetfelipe
Teams can talk to customers
and measure behaviors.

@meetfelipe
@meetfelipe
Roadmap?

@meetfelipe
 The roadmap
concept is a
waterfall residue.

It tells Hippos
that there is a
road and we have
a map for it. @meetfelipe
 If by “roadmap” you mean
“the list of our major bets/
hypotheses,” why don’t you
just call it that?
4 Enabling autonomy
Command&Control is still here

“Because
Sam said.”

“When Sam is
OK with it.”

@meetfelipe
What is the purpose of the team?
“Delivering the
features the
stakeholders
want.” Vs.

“Achieving the
the OKRs.”
@meetfelipe
Instead of committing to
deliver X by Y date, the
team commits to iterate
towards the agreed
results.

@meetfelipe
 “Perhaps the biggest
shortcoming of Agile is the
way in which teams decide
what to do.
For the longest time,
answering these questions
have not been considered the
responsibility of the team.”
Mary Poppendieck
@meetfelipe
5 Creating shorter
feedback loops
 “Always choose the option
that minimizes the total time
through the feedback loop.”
Eric Ries, The Lean Startup

@meetfelipe
We need to de-risk @meetfelipe
Is your project too big?
Value-based Timebox

You have to deliver value until

the end of the OKR cycle.
@meetfelipe
Enabling Agile 6
Transformation
Why executives
resist to Agile? @meetfelipe
“You want us to replace our
GANTT charts with what?”
 “With a bunch of
people standing up”
“…and post-it
notes!”

“Lots of
them!”
“And we have a
MANIFESTO!”
We have to speak
the same language
Questions?
Key Takeaways
•Using Agile to deliver Waterfall Goals has
limited benefits.
•OKR can take Agile to the next level by:
1.Moving from features to value
2.Abandoning the IT mindset
3.Moving from opinions to experiments
4.Enabling autonomy
5.Creating shorter feedback loops
6.Enabling Agile transformation

Felipe Castro @meetfelipe

Felipe Castro

OKR Coach,
Partner @ Lean Performance

leanperformance.com
@meetfelipe
linkedin.com/in/meetfelipe