Scaling OKRs, Part 6: The OKR Cycle

What to account for and set up to scale the cycle successfully

Hey folks,

It’s already nearing the end of June, and I’ve been trying to take advantage of these first few weeks of summer by ramping up my travel, both for business and pleasure. Mostly business, which feels new and exciting again as more and more (most?) conferences and events are back to offering in-person festivities.

As I continue my travels this week, I’m also continuing the series on scaling OKRs. In the next newsletter, I’ll bring the series to a close discussing expectations for achieving OKRs at scale. But that’s to come.

This week’s focus? Scaling the OKR cycle.

- Jeff

P.S. The book I’m writing with Josh Seiden is coming along, and we’re getting excited for its launch this fall. If you want to get on the inside with our launch efforts and receive exclusive content, resources, and event access, consider joining our launch community on LinkedIn here. The more the merrier.

Article:  Scaling OKRs, Part 6: The OKR Cycle

OKRs aren’t supposed to simply be groups of thoughtful intentions and well-written statements. They also provide a new way of working—one that reorients your processes around your customers and helps you iterate quickly, all in a set cadence, or cycle, as it’s called.

This series on scaling OKRs has covered the role of strategy, how to identify high-level OKRs for the organization’s goals, starting small as you scale OKRs throughout your org, and how to reconcile and approve OKRs with teams and leadership. In this penultimate edition of the series, we get into the cycle. So, what does the OKR cycle entail? And what does it mean for multiple teams?

The OKR cycle

The OKR cycle includes seven stages, as depicted in the diagram below (taken from my recent blog post on the same thing):

  1. Defining the organizational objective

  2. Identifying the organizational key results

  3. Setting team-level OKRs

  4. Determining solution hypotheses

  5. Beginning discovery work

  6. Conducting reciprocal delivery, discovery, and iteration

  7. Checking in on progress

We’ve discussed Stages 1-3 in previous newsletters. Time for Stages 4-7.

Stage 4: Determining solution hypotheses

Since OKRs only tell teams what customer behavior to change and not what to work on, Stage 4 involves brainstorming what possible products, services, or features might help us change that behavior. This involves assessing items on existing task lists as well as thinking of new, creative hypotheses.

Stage 5: Beginning discovery work

We don’t know if our hypotheses will work, so we de-risk them by running light experiments for each idea. With the data and customer feedback we gather from our experiments, we can determine where our ideas are right and wrong. This is called discovery work. What we learn through discovery informs how we prioritize our work moving forward.

Stage 6: Conducting reciprocal delivery, discovery, and iteration

With learning flowing in, we can start creating and delivering the products, services, and features we’ve tested while continuing to gather feedback and data upon delivery. The data tells us how we should adjust our activities, allowing us to iterate over and over throughout the cycle.

Stage 7: Checking in and making adjustments

At the end of the cycle, we meet again with leadership to review our progress. Do our OKRs still make sense? Do we need to make any fundamental shifts? These should look forward (not back) and focus on what we plan to do in the next cycle with the knowledge we’ve acquired from this one.

Communicate. Repeat.

The crucial element underlying every stage of the cycle is continuous communication between all stakeholders: fellow team members, managers, adjacent teams, and leadership. The stage labeled “checking in” signifies the final discussion about progress and next steps at the end of the cycle, but it’s not the only time you check in. For OKRs to be effective, teams should be communicating about their work, findings, and progress all the time—daily, weekly, monthly, etc. This allows everyone to stay aligned, learn collectively, and make informed decisions.

Assuming the high-level, organizational goals stay consistent for a long period (usually 6-12 months), teams should be able to complete multiple cycles within that time—typically one per quarter. When the company’s strategy shifts, the larger OKR cycle starts over from Stage 1.

How does the cycle scale?

The cycle calls for check-ins to happen organically among teams much more often than at the end of the quarter. That’s easy to do with one team. But if you have 50 or 500 teams, how do you pull off 500 quarterly check-ins or 500 conversations per sprint? Especially if those check-ins and sprints are on different timelines?

On top of that, scaling to that many teams brings challenges for discovery. If both my team and yours are doing discovery work, how do we reconcile our activities so that we’re not duplicating efforts?

Source: Koen Emmers on Unsplash

To mitigate these challenges, scaling the cycle requires teams and organizations to figure out a few important things:

1. How to distribute check-in cadences in such a way that doesn’t overwhelm teams

This is a big challenge with OKRs at scale, but it’s also an opportunity for organizations to get creative. Perhaps there are criteria you can put in place that allow teams to skip a formal check-in if they’ve met all the criteria and communicated clearly throughout the cycle.

Perhaps you institute a monthly demo day where teams from any department can present something they’ve learned or experimented with in a recent cycle—a proof of concept, a never-been-done customer feedback experiment, new code. Again, get creative.

2. What knowledge-sharing tools and processes you’ll need to ensure easy communication between all stakeholders

No matter what cadences your check-ins are on, you need to have solid channels and tools that provide two-way communication between leadership and the teams, and between teams themselves, to facilitate continuous conversation throughout the cycle.

What those channels are will vary by organization, or even by department or team. You need to ask: What are the channels that work for us? For some teams, it’ll be email. Others will use Slack. Others might use a wiki or a project management dashboard. The kind of tool doesn’t matter; what matters is that you have those support structures in place so teams can stay on the same page and leadership has a way to see the forest for the trees.

3. How to coordinate discovery activities among teams to avoid duplicating efforts or overdoing customer touchpoints

If you’re a B2C company, like retail or Amazon, you’ve got millions (or even billions) of customers. You don’t ever have a problem finding different customers to reach out to. B2B companies, however, might have just 50 customers, which means all of your teams have a limited pool for discovery activities. You don’t want your product team reaching out to the same customer that your marketing team reached out to the week prior. To avoid that, leadership—especially for organizations with a more limited customer base—needs to ensure teams have good systems for coordinating and reconciling their discovery activities.

Coordination and alignment from the top

Just as teams are responsible for ensuring they coordinate well and stay strategically aligned throughout the cycle, so too is leadership. While high-level OKRs tend to run on annual cycles, it’s not a guarantee that the strategy and OKRs set by those at the top remain relevant the whole year. Leadership must also check in quarterly to assess whether or not the high-level OKRs still make sense as the year progresses.

OKRs at scale is a tricky business, and there is no straightforward solution for all companies to follow. But by setting up systems to communicate easily, share knowledge, and coordinate between teams and leadership, you have a much greater chance at scaling success.

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