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Agile2016: Stop Using Agile with Waterfall Goals: Goal Agility with OKR

Agile2016: Stop Using Agile with Waterfall Goals: Goal Agility with OKR

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Slides from my talk during Agile2016. Although we have been using Agile mindset and processes tactically, when it comes to strategy and goal setting the waterfall command&control mindset is still the norm.
Most organizations are still using an annual, waterfall, top-down process to create a static set of goals that conflicts directly with Agile.
This talk shows how to define agile goals using OKR (Objectives and Key Results), the goal setting framework adopted by Google, Twitter, LinkedIn and Dropbox.

Slides from my talk during Agile2016. Although we have been using Agile mindset and processes tactically, when it comes to strategy and goal setting the waterfall command&control mindset is still the norm.
Most organizations are still using an annual, waterfall, top-down process to create a static set of goals that conflicts directly with Agile.
This talk shows how to define agile goals using OKR (Objectives and Key Results), the goal setting framework adopted by Google, Twitter, LinkedIn and Dropbox.

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Agile2016: Stop Using Agile with Waterfall Goals: Goal Agility with OKR

  1. 1. Stop Using Agile with Waterfall Goals: Goal Agility with OKR www.leanperformance.com Felipe Castro
  2. 2. @meetfelipe Loosing my religion
  3. 3. @meetfelipe The Agile Manifesto is Wrong
  4. 4. @meetfelipe Agile was created for managing software projects. As such, it is focused on managing deliverables (user stories or features).
  5. 5. @meetfelipe There are no ceremonies for tracking results.
  6. 6. @meetfelipe “Working Software” Is not the same as “Valuable Software” The First Mistake
  7. 7. @meetfelipe “Working software is the primary measure of progress.” Agile Manifesto
  8. 8. @meetfelipe “Working software is the primary measure of progress.” Agile Manifesto ✘
  9. 9. @meetfelipe “Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.” Agile Manifesto
  10. 10. @meetfelipe Marty Cagan, Silicon Valley Product Group “Teams today are all too often feature factories, with little regard for whether the features actually solve business problems.”
  11. 11. Book Recommendation
  12. 12. @meetfelipe What is Value?
  13. 13. @meetfelipe Value is measured after delivery
  14. 14. @meetfelipe User Stories are experiments
  15. 15. @meetfelipe Estimating Value Is not the same as Delivering Value The Second Mistake
  16. 16. Decision by Committee Commissioned Study by Forrester Consulting
  17. 17. Decision by Committee Commissioned Study by Forrester Consulting HiPPO Personal Opinions
  18. 18. Ron Kohavi Microsoft, General Manager, Analysis & Experimentation Amazon, Ex-Director, Data Mining & Personalization
  19. 19. “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.
  20. 20. @meetfelipe User Stories are experiments ….with a low success rate
  21. 21. @meetfelipe Where is Empiricism when it comes to Value?
  22. 22. @meetfelipe Where is Inspect and Adapt?
  23. 23. We need to move away from value estimation towards value measurement.
  24. 24. @meetfelipe We need to evolve
  25. 25. “Silicon Valley is Coming” Jamie Dimon, CEO JP Morgan
  26. 26. Two Models
  27. 27. What is your target?
  28. 28. Plan-Driven Vs. Data-Driven
  29. 29. Plan-Driven Vs. Data-Driven Deterministic Phase-Gate Waterfall Command& Control Iterative Agile Distributed
  30. 30. @meetfelipe Why do we believe in plans?
  31. 31. Daniel Kahneman Nobel Prize Winner
  32. 32. Planning Fallacy We underestimate the time, costs, and risks of future actions. While overestimating the benefits.
  33. 33. The Plan-Driven model is still alive Estimating without measuring is Plan-Driven and a fallacy
  34. 34. Discovery-Driven Planning Planning includes making a series of assumptions that are: •Implicit •Non Validated
  35. 35. “Your idea is just a series of non validated hypotheses.” Steve Blank
  36. 36. “No plan survives contact with the enemy”. Helmuth von Moltke (1800-1891)
  37. 37. Although we are using Agile tactically, we are using waterfall for strategy and goal setting
  38. 38. Static Annual Planning 1
  39. 39. @meetfelipe “The only way it's all going to go according to plan is if you don't learn anything.” Kent Beck
  40. 40. Jeff Immelt CEO GE
  41. 41. “In the digital age, sitting down once a year to do anything is weird, is just bizarre.” Jeff Immelt, CEO General Electric
  42. 42. Goals Cascade ?
  43. 43. Top-Down Unidirectional Irreversible Flow No Feedback Loops Ends Crashing on the Rocks Cascade (or waterfall):
  44. 44. Laszlo Bock VP of People Operations, Google “Research agrees with your intuition: Having goals improve performance. Spending hours cascading goals does not.”
  45. 45. There has to be another way
  46. 46. Full-Stack Agility
  47. 47. Strategy Tactics Operations Culture Goals The Stack
  48. 48. Strategy Tactics Operations Culture Goals Waterfall Development Big non-validated bets, long feedback cycles Annual Static Planning Top-Down, Command & Control Cascading (Waterfall) Goals The Traditional Stack
  49. 49. Strategy Tactics Operations Agile Development Lean Startup + Lean Prod Mgmt. Culture Goals Half-Baked Agility Cascading (Waterfall) Goals Annual Static Planning Top-Down, Command & Control
  50. 50. Strategy Tactics Operations Agile Development Lean Startup + Lean Prod Mgmt. Culture Goals Half-Baked Agility Cascading (Waterfall) Goals Annual Static Planning Top-Down, Command & Control Waterfall Legacy
  51. 51. The Waterfall Legacy is in direct conflict with Agile
  52. 52. 70%of Agile practitioners Report tension between their teams and the rest of the organization. Embracing Agile, HBR - 2016
  53. 53. Strategy Tactics Operations Agile Development Culture Goals Data Driven, Iterative, Hypothesis Validation “Silicon Culture” OKR (Goal Agility) Full-Stack Agility Lean Startup + Lean Prod Mgmt.
  54. 54. Silicon Culture’s 7As Agility Iterative, incremental, fast feedback Agnosticism Data driven, hypothesis validation, experiments Asymmetry Power Laws, Moonshots, 10x Talent Autonomy Self-managed teams that question “orders” Alignment 360º Alignment, continuous feedback Accountability Focus on delivering value Authenticity Purpose, consistent values
  55. 55. James March Stanford University “Culture is Poetryand Plumbing”
  56. 56. When properly used, OKR can change the “cultural plumbing”
  57. 57. How Silicon Valley sets goals?
  58. 58. OKR - Objectives and Key Results
  59. 59. Created by Intel
  60. 60. Goal Agility 1
  61. 61. Simplicity 2
  62. 62. Adopted by Google in 1999
  63. 63. John Doerr
  64. 64. Doerr’s Goal Formula I will ____ as measured by ______
  65. 65. Doerr’s Goal Formula I will (Objective) as measured by (this set of Key Results)
  66. 66. @meetfelipe3 Measurement
  67. 67. Objective: •Aspirational. •Memorable – Simpler, shorter, remarkable. •Qualitative. OKR: Components Key Results: •2-5 per Objective. •Quantitative & Measurable. •Metrics (recommended) or Milestones.
  68. 68. @meetfelipe Engaging Objectives 4
  69. 69. @meetfelipe “Ensure the dream”
  70. 70. @meetfelipe “Move to the clouds”
  71. 71. @meetfelipe Make Everybody Happy ;)
  72. 72. Key Results: •Increase average weekly visits to 3.3 per active user •Reach a Net Promoter Score of 52%. •Increase non paid (organic) traffic to 80%. •Reduce revenue churn to 1%. •Increase engagement (users that complete a full profile) to 75%. Objective: Delight our customers OKR - Example
  73. 73. Activity #01: Creating one OKR
  74. 74. •Create one Objective with up to 5 Key Results for one initiative you are working on. Talk to your neighbor
  75. 75. 5-minute exercise
  76. 76. Key Results: •Increase average weekly visits to 3.3 per active user •Reach a Net Promoter Score of 52%. •Increase non paid (organic) traffic to 80%. •Reduce revenue churn to 1%. •Increase engagement (users that complete a full profile) to 75%. Objective: Delight our customers OKR - Example
  77. 77. •Activity-based Key Results: Measure the completion of tasks and activities or the delivery of project milestones or deliverables. •Value-based Key Results: Measure actual results and the successful delivery of value (or a value component) to the organization. Value-based key results measure the outcomes of successful activities. Choosing your Key Results There are two basic types of Key Results:
  78. 78. Tactical shorter-term OKRs for the teams High level strategic OKRs for the company
  79. 79. ~60% Bottom Up
  80. 80. Transparency
  81. 81. How OKR complements Agile and Lean
  82. 82. A Moving from features to value
  83. 83. @meetfelipe
  84. 84. @meetfelipe
  85. 85. OKR helps to create a culture focused on measuring and delivering business value.
  86. 86. @meetfelipe From Activities To Value Definition of Done Acceptance Criteria Success Criteria (OKRs)
  87. 87. B Enabling autonomy
  88. 88. Is Agile Command & Control?
  89. 89. @meetfelipe Command&Control is still here “Because Sam said.” “When Sam is OK with it.”
  90. 90. @meetfelipe Command&Control is still here We call them our delivery team… …because they deliver what we tell them to.
  91. 91. “To achieve the success criteria as defined in the OKRs.” “To deliver the features the stakeholders want.” What is the purpose of the team? Vs.
  92. 92. C OKR incentivizes leaner approaches and smaller batches
  93. 93. Is your project too big?
  94. 94. Value-based Timebox You have to deliver value until the end of the OKR cycle.
  95. 95. OKR helps prioritize the backlog D
  96. 96. “If a feature idea doesn’t speak directly to one the OKRs, it’s generally off the list.” Marty Cagan, Silicon Valley Product Group
  97. 97. E Enabling Agile Transformation
  98. 98. Why executives resist to Agile?
  99. 99. “You want us to replace our GANTT charts with what?”
  100. 100. “With a bunch of people standing up”
  101. 101. “…and post-it notes!” “Lots of them!”
  102. 102. “And we have a MANIFESTO!”
  103. 103. Enabling Agile Transformation Perceived predictability Delivered Value
  104. 104. Instead of committing to deliver X by Y date, the team commits to iterate towards the agreed results.
  105. 105. Transforming Activities into Value
  106. 106. If we are successful with ____________, we will have more ________ and/or less __________
  107. 107. If we are successful with the new campaign, we will have more customer satisfaction (NPS) and/or less churn
  108. 108. Group Activity #02: Transforming Activities into Value
  109. 109. Talk to your neighbor •Evaluate your Key Results and separate those that are Activity-based and those that are Value-based. •Select one Activity-based Key Result and convert it into Value. OR •Select one initiative that you have worked on and convert it into Value.
  110. 110. 5-minute exercise
  111. 111. If we are successful with the new campaign, we will have more customer satisfaction (NPS) and/or less churn
  112. 112. A different mindset
  113. 113. @meetfelipe IT Mindset Vs. Product Mindset
  114. 114. IT Mindset Product Mindset Exists to service the perceived needs of "the business." Exists to service the needs of the customers. Requirements gathering Product Discovery Functional Silos Multi-functional teams Measured by projects Measured by results Engineers focus on delivery Engineers help create technology-inspired products
  115. 115. How to handle the transition?
  116. 116. Activities Goal Agility Autonomy Static Plan Top-Down Content Process Value “IT/Delivery Mindset” Decoupling Process and Content 1 2 3 Transformation Routes
  117. 117. Engaging Working Delivered Valuable Business Goal Maturity Levels Engineering & Team Product & UX Project Management
  118. 118. Level Delivered Working Engaging Valuable Goals Project Management Engineering & Team Product & UX Business • Schedule • Budget • Scope • Predictability • # de Bugs • MTTR • Uptime • Response Time • Lead time • Cycle time • Delivery frequency • % Test Coverage • Spotify Health Check • Team Maturity HEART • Happiness • Engagement • Adoption • Retention • Task success •Revenue •EBIDTA •Revenue per employee •Value obtained by the client: •ROI •Benefits •“Customer Success”
  119. 119. @meetfelipe OKR Coach, Partner @ Lean Performance Felipe Castro leanperformance.com linkedin.com/in/meetfelipe @meetfelipe

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