Achieving Business Outcomes: The Power of OKRs and Value Stream Management

Between the company’s founding in the late 1990s and today, Google’s headcount grew from 40 employees to more than 180,000, and global revenues are now north of $300 billion. This dramatic growth can be attributed to many factors, including the company’s unique products and services. However, another factor that’s not so well known also played a significant role: objectives and key results (OKRs). OKRs were originally conceptualized by Andy Grove from Intel. Google adopted OKRs in its inaugural year, and their success helped spur the strategy’s widespread use among tech giants and non-tech companies alike.

Despite the popularity of OKRs, C-level executives often overlook the vital connection between IT initiatives and business outcomes, which hinders their ability to capitalize on the full potential of OKRs. OKRs translate a company’s strategy into an easy-to-understand roadmap—guiding every team member and letting them see how their work fits into overall company goals. This blog post explores how Value Stream Management (VSM) can help enterprises align software teams with the C-suite's goals, and, in the process, improve agility and business outcomes.

The synergy between OKRs and VSM

OKRs and VSM complement each other perfectly, helping teams achieve the common goal of delivering value efficiently, within defined timelines. Integrating VSM into the process helps address such challenges as misaligned priorities, complex infrastructure, technical debt, and inefficient delivery. With VSM platforms, business leaders can assign value metrics like OKRs to value streams, prioritize work based on value, measure actual value delivered, and compare results with expected outcomes.

For enterprises pursuing this kind of improvement strategy, OKRs can be a great tool to help software teams align their work with what the C-suite cares most about: outcomes. OKRs and VSM can work hand-in-hand in helping teams achieve their overarching goal: figuring out what matters and getting that done in a time-bound, efficient manner so that performance is improved. When teams combine OKRs with VSM, organizations can address the problems created by misaligned priorities, conflicting datasets, complex and heterogeneous infrastructure, excessive technical debt, and inefficient delivery processes.

VSM platforms can provide significant advantages in harnessing the potential of OKRs. VSM platforms can enable business leaders to assign target value metrics like OKRs to value streams. In addition, these platforms can help DevOps leaders more effectively prioritize work based on value, measure value delivered, and compare expected and actual value.

ValueOps by Broadcom is a leading platform in the VSM space. This comprehensive software solution optimizes the flow of work across an organization. ValueOps helps teams focus on value delivery by visualizing and analyzing end-to-end value streams. This enables teams to identify bottlenecks, streamline processes, and improve overall efficiency. ValueOps supports various methodologies, including Agile, Lean, and DevOps, making it a versatile platform for organizations pursuing continuous improvement.

Here are three strategies for creating effective OKRs for software delivery value streams:

• Measure baseline performance. Measuring baseline performance for the flow of work across the software delivery value stream must be the very first objective for IT teams—this is a key stepping stone. This will help establish your team's current speed and efficiency in delivering strategic initiatives. When measurement of large-scale product delivery involves an array of systems, people, and workflows, this is where VSM comes into play. VSM solutions provide the insights and intelligence that help teams collect data from all contributors, components, and departments. This enables teams to gain visibility across end-to-end value streams and measure speed, velocity, flow load, and efficiency. Without this intelligence as a baseline, it will be impossible to commit to a set of new objectives.
• Align IT and business outcomes. The next ideal step is to ensure that all stakeholders, leaders, and members of the value stream are accountable for specific business outcomes. (To learn more, see the blog post on aligning strategy and execution with OKRs.) Reaching consensus on these outcomes will go a long way in determining how to make the changes needed to ensure the value stream’s goals are achieved. The inevitable negotiations around priorities, trade offs, and payback will be much easier with this framework in place.
• Foster continuous improvement. Once baseline metrics are established and people are aligned around business outcomes, you can now start using OKRs to improve flow in supporting specific results. In addition, you can start tracking progress on a quarterly basis—in line with budget cycles. Through this review, you can introduce faster feedback loops and course corrections, fueling continuous improvement. For each value stream, you can gain an end-to-end view of flow load, work distribution, speed, efficiency, and team capacity metrics. You can accurately spot bottlenecks and determine where you must shift attention and resources. OKRs can act as the translator between strategic objectives and the measurable, day-to-day work of the teams delivering value to the market. (To learn more, read this blog post about applying KPIs and OKRs.)

Conclusion

Google's success with OKRs is inspiring, however blindly copying their approach can lead to common implementation mistakes. There is no one-size-fits-all method for adopting OKRs, even within Google. To maximize the benefits of OKRs, it is essential to combine them with VSM and continuous improvement, Lean-Agile methods. Through this strategic approach, IT teams can be better aligned with broader business goals and maximize the power of OKRs in boosting business outcomes.

If you want to learn more about our VSM platform, and how it can provide the critical metrics integration your teams need, be sure to contact the Broadcom ValueOps team today.