Gaurav Sabharwal
Ultimate Guide to Objective and Key results – OKR Meaning and Examples
Do you dread setting goals for your organization as you don’t see useful results? […]
What is Scrum?
“Scrum” comes from rugby, where players huddle up and work together tightly to get that ball moving down the field. In software development, it’s all about teamwork, too!
In Scrum, everyone works in shorter cycles called sprints. These sprints are usually focused, 2-4 week periods where the team sets out to achieve specific goals.
There’s the Product Owner, who’s the voice of the customer and decides what needs to get done. The Scrum Master, the team’s coach, ensures everyone follows the game plan and removes any obstacles that might trip them up. The team members do the work, bringing their skills to the table to make things happen.
Regarding goal-setting in Scrum, the team sets “user stories” or “tasks” at the beginning of each sprint. These are like the mini-goals they want to knock out during that sprint. These goals are super-specific and achievable within that short time frame.
What are OKRs and KPIs in Scrum?
In Scrum, OKRs provide goals and direction, while KPIs track essential metrics and progress.
There is a tendency in the team to focus too much on tasks and not care about the customer value.
OKRs inspire innovation and improvement, while KPIs keep things grounded, ensuring the team stays on track to meet these ambitious goals.
For example, you set outcome-focused objectives like “Improve User Experience by Reducing Page Load Time.” These drive the team towards big-picture goals.
KPIs complement OKRs by providing specific metrics like page load time, error rates, or customer satisfaction scores. These KPIs help measure progress towards the OKRs.
What are the differences between OKR and KPI in Scrum?
Read the detailed comparison between OKRs and KPIs in Scrum
| Factor | OKR | KPI |
| Transparency | OKRs promote transparency by setting clear objectives visible to all. Each individual’s objectives are open and accessible. | KPIs are standalone metrics that are usually visible to individuals. |
| Progress Check-ins | They encourage weekly check-ins and progress reviews, allowing teams to inspect their performance against the defined objectives. | KPIs can be reviewed regularly but there are no conversation starters like the KR-linked progress and confidence levels. |
| Evidence-based | OKRs are evidence-based, meaning they are grounded in data and evidence rather than solely based on assumptions or opinions. This approach ensures that the goals set through OKRs are realistic, achievable, and tied to tangible outcomes. | KPIs are also data based but team members don’t have to answer or discuss their progress regularly like they do while using OKRs. |
| Continuous improvement | In the context of OKRs, goal setting is an ongoing process continually refined and improved over time, emphasizing the dynamic and iterative nature of the OKR framework. | KPIs generally stay the same as they are based on the specific metric benchmarks. |
| Balancing flexibility | OKRs naturally strike a balance between flexibility, enabling teams to set ambitious objectives and adapt as necessary. This adaptability promotes innovation and agility. | KPIs, while valuable, require a balance between rigid performance metrics and the need for adaptability. |
| Outcomes-driven | In the context of OKRs, the focus is on defining and achieving meaningful results that contribute to the organization’s overall success. | KPIs are based on the already set benchmarks and measure past performance. |
| User-centric | With OKRs, you can align the whole team toward achieving better UX by linking their OKRs with the main objective. | KPIs help organizations measure and assess their performance in areas directly related to user satisfaction and value delivery. |
| Collaborative | The collaborative nature of OKR goal-setting aligns well with the Scrum framework’s principles of shared ownership and commitment. | KPIs don’t necessarily encourage collaboration as they are standalone metrics. |
| Short-term | OKRs usually focus on longer timeframes, while SCRUM goal setting is based on sprints. You have to set OKRs for a short time frame to make them work here. | KPIs can easily be set for the shorter time frames of the Scrum. |
| Iterative | The concept of reviewing and adjusting goals throughout the sprint and after aligns with the principle of continuous improvement and adaptation of Scrum. | You can try to set newer more meaningful KPIs in the next sprint but they will still be standalone metrics that are assigned to individuals. |
Examples of OKRs and KPIs in a Scrum team
OKRs and KPIs are two different goal-setting frameworks with unique characteristics, and purposes.
Let’s dive into one-one examples of OKRs and KPIs within the Scrum framework to understand better how they differ.
- One set of OKRs for enhancing UX
Objective: Enhance user experience
Due date: 4 weeks
- KR1: Decrease average page load time on the website by 20% compared to the previous month’s average.
- KR2: Address and resolve 100% of critical and significant bugs users report within 24 hours of detection.
- KR3: Increase user engagement with a new feature by 30%, measured by a rise in daily active users utilizing the feature.
- KR4: Launch at least one user-requested feature based on customer feedback within the sprint period.
- Three Key Performance Indicators (KPIs) for a 1 month Scrum
KPI 1: Achieve an average page load time of under 3 seconds across all pages.
KPI 2: Maintain a mean time to resolution (MTTR) of critical and major bugs within 24 hours.
KPI 3: Increase the adoption rate of the new feature by 25% compared to the previous month.
Conclusion
It is advisable for organizations implementing Scrum to adopt a well-rounded approach that merges the strategic emphasis of OKRs with the operational effectiveness of KPIs.
OKRs shed light on the ‘what’ and ‘why’ of the tasks, while KPIs gauge the ‘how well’ and ‘how efficiently’ aspects.
This blend encourages a comprehensive approach to performance management, nurturing innovation, adaptability, and consistent operational excellence within the dynamic Scrum framework.
