OKR: TI Sancor Seguros Paraguay

Actualizado: 16 dic 2020

OKRs are a simple way to create structure for companies, teams, and individuals. The secret sauce when it comes to OKRs is to make them very ambitious. That way OKRs enable individuals and teams to focus on the bigger picture and to achieve more than they thought they would.

OKRs encourage a result and value oriented culture by focusing on the main priorities. It also increases the autonomy level and boosts self-organization. What are the difference between KPIs and OKRs? KPIs are defined by a manager, OKRs are self-chosen and self-driven.


Sancor Seguros Paraguay is an Insurance company that develops its operations in Paraguay. The IT team is made up of four people:

  • Technical Support: Pedro

  • Systems Analyst: Edhelira

  • Process Analyst: Mónica

  • Infrastructure and Telecommunications Analyst: Erasmo

Its main function is to provide all IT services to the business.


In the IT area of Sancor Seguros Paraguay we set out to implement the OKR methodology in order to achieve greater focus on the objectives that the business intends to achieve.


What Are OKR

As mentioned by Jurgen Appelo, “OKRs are a mix of the PDCA cycle, stretch goals, SMART goals, the Lean Startup method and Management by Objectives. Basically, it's all of them wrapped up in one agile management practice ”.

Let's break this thing down, one step at a time. The acronym OKR stands for Objective Key Results and consists of two parts.


Objective

Is the goal. The value-driven purpose of the company, that adds to the business value. Answers to the question “Where do we want to go?”. Sounds more like a compass for the next quarter. However, a good Objective should be more than that. It should be ambitious and engaging, in a way that will invite the crew to explore different ideas to get us there and pursue them with zeal.

Objective: Increase the quality of new features in our new releases.


Key Results

Moving on to the Key Results, answer to the question “How are we going to know that we made it?”. As you can see, the sentence “Increase the quality of new features in our new releases” is very vague and abstract. Makes it difficult to know if we accomplished the goal. Yes, increase the quality, ¿but by how much and by when? By the end of next week or next year? You see, the whole point is that the Objective alone is not adequate. We need to get more hands-on and include also a quantitative aspect and a timeframe. This is what the Key Results add to the sentence.


In our case, a complete OKR would look something like this:


Objective:

  • Increase the quality of new features in our new releases

KRs:

  • Resolve 80% of already identified bugs in the Backlog in Q3.

  • Decrease the number of critical bugs reported in Q3, to 1%.

  • Move crash-free rate from 99,2 to 99,8% in Q3.


But, is this enough? Of course not. For all this to make sense, we need to move forward and involve the teams as soon as possible, ideally, the teams are already summoned in the Key Results brainstorming. Along with the teams, we need to make an actionable plan on the things we need to do so that we can tackle this down.

The most important though is to plan our delivery in iterations, get feedback, learn, and re-plan accordingly. Sounds familiar? Simply, being Agile!

Let’s look into the single parts of the OKRs.

The Objective is a qualitative goal that you set yourself for the next few months. For example, ‘Be a faster runner’, ‘Launch a successful website’, or ‘Sell more books’. You can have several such objectives, but the point is to focus. Less is more! Each objective should be ambitious and feel a bit uncomfortable. You must feel like, “Gosh, I don’t know if I’m able to do this.” Because, if you don’t aim high, you won’t rise fast. That’s why some people refer to such objectives as stretch goals.

The ‘Targets’ (in Google’s terminology: key results) are there to make your objective measurable. There’s no point setting yourself objectives if you cannot measure progress and if you cannot determine whether you succeeded. That’s why some people traditionally refer to key results as SMART goals: Specific, Measurable, Achievable, Realistic and Time-bound.

The twist that the OKR’s practice adds is that you must define multiple key results. That’s because no metric is perfect, and it’s best to look at each problem from multiple angles. Don’t get all hung up over one silly target. If one target fails, no worries! You have others.


The final part of the OKR’s practice is the Evaluation or self-assessment. Or to speak in terms of the Lean Startup method, at the end if the cycle: what did you learn? It’s interesting to note that traditional organizations usually go wrong with this step. Most of the time, managers use metrics to evaluate other people, not themselves.



How Did We Use This Practice

Together with the team of 4 people we managed to work with the business agility bases in order to deliver value to our clients, transparency, feedback ceremonies, experimentation, continuous improvement, and Management 3.0 practices. We use the management 3.0 OKR practice, with the purpose of focusing on the objectives that the team must achieve to achieve the objectives of the organization. As a team we set 2 goals that we call roof shots as they are targets with some difficulty but achievable such as stretching or jumping to touch the ceiling of the office:


Objective 1

  • Increase Customer Satisfaction

KR

  • Go from an NPS in ticket management from 39 to 50

  • Go from a requirements management NPS from 37 to 50

  • Go from a general satisfaction NPS of 59 to 65


Objective 2

  • Increase the work climate index by 20% in the IT department

KR

  • Reduce the number of bugs in production by 20%

  • Reduce the amount of unplanned work by 25%

  • Increase the number of retrospectives achieving 100% completion in each iteration

After having defined the objectives and key results, the team defined the initiatives to achieve the Key Results throughout the next quarter and presented and validated with the IT manager.


It is not only about definning Objective and Key Result, defining OKRs is one part, but how do we measure progress? How does management respond to the fact we introduced a new system? Applying this practice is also about making sure the OKRs add value over time, not just defining them.


So what we defined with the team was a series of 7 points to fully implement the methodology and ensure added value to the department in terms of a new capacity that allows us to work more focused on what really matters. These 7 points are detailed below:


1. Track progress The progress of each key result can be measured on a score form 0 to 10 or 0 to 100%. OKRs should be challenging, so reaching about 7 or 70% is considered a good result. If it‘s 10 or 100%, then the target was too easy. If it’s less than 4 or 40%, then it might be a warning sign. It doesn’t necessarily mean it was a failure, but it can be a sign to evaluating whether the objective is still worth pursuing or if the approach should be changed.


The IT team defined using a score from 0 to 7 and the following scale:

  • 0 to 4: red

  • 5 to 6: yellow

  • 7 to 10 green

2. Set a cadence OKRs for organizations are typically set on annual basis because most companies set their plans and budgets for a year. OKRs for each team are set on monthly or quarterly bases. This way, teams are more flexible and can adjust their OKRs several times during a year but sill support the company’s yearly OKR.


The IT team defined a weekly follow-up cadence for the OKRs, with monthly iterations and a full review and quarterly replanning.

3. Align with organization’s objectives Focus on the objectives of the organization. The objectives of each product team should build up and accomplish the organization’s objectives. Don’t give space for personal objectives as they might interfere with the person’s ability to fully contribute to their product team’s objectives.


On a quarterly basis, the IT team decided to hold a meeting with the manager and the CEO of the company to present the progress in compliance with the OKRs and agree on the OKRs for the next quarter, validating that there was no change in strategy in the company.

4. Be transparent It’s very important that every team track their progress against their objectives and makes the results and the progress transparent to everyone. Transparency makes objectives observable across all levels and shows everyone how they align with the rest of their department and motivates one another to accomplish their objectives.


The IT team decided to paste the OKRs on the walls of the company using a canvas that would also allow them to record the progress in their compliance.

5. Evaluate performance consistently In order to be fair and avoid any confusion, you should use the same approach in the evaluation of key results across the whole organization, so the success of key results is calculated the same way for all teams.


Taking into account that IT is the first team to work with OKR, the performance began to be evaluated with its own methodology in the weekly retrospectives of the team, applying what was defined in point 1. These evaluations were communicated to the IT Manager.

6. Be accountable Hold each team accountable for achieving their objectives. Mistakes are unavoidable, so you must expect them and push through with encouragement. Retrospectives are a great way to learn and improve.


In retrospectives, the IT team began to measure autonomy on a day-to-day basis, among other things. After a couple of iterations the team decided to include a methodology to measure their own performance in retrospectives; After searching the web and evaluating several, it was decided to implement the spotify team health assessment model (http://www.andycleff.com/2020/05/agile-team-health-check-models/)

7. Establish a hierarchy Senior management is responsible for the organization’s objectives and key results. The objectives of department teams are the responsibility of the the heads of each department.

The hierarchy in this case is given by the CEO of the company and the IT Manager


Why we decided to implement OKR?

We decided to use the OKR methodology because we are convinced that it is the only and best way that will allow us to focus on what really matters in such a way as to help the IT department to achieve organizational objectives.


My Learnings As Facilitator

When starting with the methodology, the 2 main difficulties that I encountered in defining the objectives and key results are the following:

  • It was difficult to change the strategic planning methodology and definition of objectives that we had been applying in the IT team, most of the team members tended to define tasks or activities instead of key results.

  • Cost to define key results that are quantifiable.

The positive of this experiment is to achieve the focus of the team "only" in the defined objectives. The challenges that lie ahead as a team in relation to the methodology are:

  • Perform weekly check-ins.

  • Carry out quarterly monitoring and redefinition of the okr if necessary.

More learning:

  • As a facilitator, it is key to understand and convey that it is not a methodology that tells you step by step what to do and how. Each company and / or team must define its own way of applying it.

  • When initiating projects that lead to organizational change, it is important to start small. It is important to note that depending on the culture of the company, the resistance to changes may be greater.

  • It is very important to limit the amount of OKR to a maximum of 3 or 5 at each level where they are defined to focus all efforts on what is really important. If they are defined more, as facilitator we must promote their prioritization.

  • As a facilitator it is very important in addition to defining the OKRs for the quarter, defining the check-in cadence and the next quarterly meeting to evaluate the results and restart the cycle, this should be part of the team ceremonies.

  • It is very important to generate retrospective spaces at the end of the quarter to identify what we have learned and what we can improve for the following quarter.

  • It is important to define roles and the specific functions of each role, that is, who will serve as the OKR Coach for monitoring and follow-up. This will help avoid uncertainty in the OKR implementation process.

  • As a facilitator, I believe it is important at the end of the OKR definition practice to ask the team what degree of confidence they have in relation to the achievement of the defined OKRs, voting using the 5-finger practice and depending on the degree of confidence to review the OKRs again if confidence is low or end the practice if the degree of confidence is high.


Link Web Page Management 3.0 https://management30.com/

Link Web Page Management 3.0 OKR https://management30.com/practice/okrs/

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