• Rally
  • OKRs: A Metric System for Leaders not Liters

OKRs: A Metric System for Leaders not Liters

By Matt Miner | December 10, 2018

“Why did you join your current company?”

For engineers, the usual answer is to solve meaningful and valuable problems. You believed in the mission of the company and that you could play a part. So, you jumped in and agreed to give up your most valuable resource: time.

But on your first day, you didn’t get a JIRA ticket assigned to you with the title “Fix world hunger” or “Revolutionize healthcare.” You got low-level, digestible, achievable chunks of work; i.e. tasks. A weak connection of a task and the value it represents erodes the fundamental essence of why you signed up. You feel like you’re just completing tasks, not solving a meaningful and valuable problem.

Work must be tied to value in a way that everyone, especially the implementer, understands. Rally ties the work we do to value and purpose through Key Performance Indicators (KPIs) and Objectives and Key Results (OKRs).

Caveat: there’s a lot of depth to this subject and how Rally manages execution – this is a brief high-level summary.

KPIs

Key Performance Indicators (KPIs) are business measurements of performance. In engineering, one type of KPIs are ongoing “health” metrics tracked week to week to highlight problems. We use a KPI color system that is established based on ranges customized by the teams.

Green: Things are going great, keep going!

Yellow: The metric is at risk.

Red: Something is wrong and significant steps must be taken to get it out of red.

Examples:

Green         Yellow         Red         
Sprint completion %80%-120%70-80% or 120-130%Everything else
API response times< 5ms5-10ms> 10ms
# of bugs filed< 3 per week3-7 per week> 7 per week

But Rally isn’t in the business of sitting back and watching green metrics stay green. We push the envelope, challenge ourselves, set stretch goals, improve. KPIs can be used for those too, but this is where OKRs come in.

Objectives and Key Results

Objectives

Imagine you’re at a company party and an executive from outside of your organization who knows of you, but isn’t an expert in your field, asks “What are you up to this upcoming quarter?” Your answer should be in the form “We’re going to {OBJECTIVE}.” The objective should be short, memorable, and inspiring.

Key Results

Key Results are how you measure we measure our progress against Objectives. The answer should be quantifiable and trackable from the start. Key results need to fit the structure of “[Increase/Reduce] [Measurable thing] from [X] to [Y] by [Timeframe].” We make them quantifiable to track their progress over time.

Objective - Reduce cloud operating costs

KPI - AWS cost per end user

Key Results -

  • Decrease # of instances without cost tagging from 25% to 0% by next month
  • Increase AWS reserved instance coverage from 5% to 25% by end of Q4
  • Increase elasticity of our servers from 5% to 15% by Q3

Focus on the How, Using Counter-KPIs

Be careful not to focus too much on implementing the Key Results “at whatever cost.” It can cause significant impacts to your overall business objectives. In the above example, you could implement those Key Results by being too aggressive and causing instability or downtime. Keeping an eye on other “counter” KPIs while implementing can help avoid expensive tech debt issues long term.

OKR Process

1-Set the Objective This can be designed by you, or given to you by an executive business leader.

2-Measure Determine what KPI(s) will be the ultimate measure of success for your objective.

3-Construct Key Results Identify the milestones that, if you hit them, will tell you you’re achieving your objective.

4-Execute Complete initiatives or projects to achieve the Key Results.

5-Repeat When your KRs are complete and your KPI is green, you’ve met your objective. Awesome!

6-Maintain The KPI is now in “keep me green” mode. The metric should be measured on a regular basis and if it drifts away from “green” you should correct it as quickly as possible to prevent the loss of value.

Matt Miner