Playbook

How to Create Real Enterprise Agility With Adaptable OKRs

Enterprise doesn’t have to mean slow change. Here’s how industry leaders set themselves up for agile success with adaptable OKRs.

Who this is for and why it matters

The larger the enterprise, the more difficult (and unlikely) it is to be truly agile.

Or at least that’s what many believe—and on the surface, it makes sense. Larger things are harder to change. A cruise ship can’t turn as fast as a kayak. It’s easier to move a single stone than a pile of them. And observation of many enterprises seems to prove these assumptions true.

Of course, the truth is more complex. Just because Enterprises are often slow doesn’t mean they always are. Even though we can find multiple examples of Enterprises that aren’t agile doesn’t mean no Enterprises have harnessed the power of agile. In fact, large companies (Bosch and PayPal, for a start) adopt agile practices all the time.

The truth is that many enterprises aren’t agile for a number of common (and solvable!) reasons, including:

  • Legacy systems or processes that get in the way
  • Legacy mindsets that make change slow or difficult
  • Large enterprises assume they can’t be agile–and therefore don’t try
  • Adaptability isn’t built into strategic planning

The truth is that these are solvable challenges. With the right process and tools, you can move a pile of stones in a single swoop.


Establish agile transformation and skyrocket performance with adaptable OKRs

Putting those tools in place can take some time and mindset shifts. But it’s infinitely worth it. Just ask McKinsey, whose research found that business units that adopted an agile model pre-Covid outperformed their peers by a large margin, with a whopping 92% outperforming in customer satisfaction, 93% in operational performance, and 76% in employee satisfaction. Agile also made organizations five to ten times faster.

So what process and tools do you need to re-route the cruise ship and move that stubborn rock pile?

In the case of enterprise agility, one foundational answer is adaptable OKRs (which will build adaptability into your strategic planning process at a foundational level). Here’s how to implement this foundational agile framework, setting your enterprise up for flexible success.

How to Create Real Enterprise Agility With Adaptable OKRs TL;DR Diagram

Start with ambitious goals

Ask any expert and they’ll tell you: OKRs should be ambitious. They are not supposed to be an easily-achievable checklist. They’re “reach” goals. Creative goals. Goals that require just a little stretch.

Because without that stretch, it’s easy for the business to miss out on opportunities for growth and innovation. Not to mention that people are wired for challenges. But even the most inticing challenges become impossible if they're not set up correctly from the beginning.

A common problem with large organizations trying to be agile is implementing these ambitious goals too late in the game. While it's certainly a "start-up" mentality, it's unrealistic to plan ambituous goals if you're not using them from the very beginning of your planning process.

These goals need to be set before you plan out a large chunk of time, so you can easily tie the goals to every function. If you develop goals in the middle or even at the end of your planning process, you know you'll find yourself trying to fit squares into circles. Smaller companies can afford to pivot this quickly, but Enterprise businesses must plan in advance.

However, it's important to note that while early quarter or annual planning is key, the goals can (and likely will) change. Early planning doesn't mean you stick to the same exact goals all year.

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Tie every goal to outcomes

As best-selling management science author Christina Woodtke explains, “Executives should set inspiring objectives with difficult key results, then trust their people to find a way to make those results a reality. As a leader, you can coach people, you can advise people, and you can review progress, but you must not dictate tasks.”

It’s important to note here that ambitious does not mean impossible. Psychological research tells us that setting goals teams know they can’t reach will create apathy, not inspiration. The key is the balance—pushing limits just enough.

Christina Woodtke also says that key results should always be...well, results. A common failing when creating OKRs is confusing results with tactics and outputs with outcomes. When setting your OKRs, make sure you understand how to differentiate and what role each of these plays.

Tying Goals to Outcomes Diagram

Outcomes are the true end goals. Outputs are the things you create to reach those end goals. Tactics are how you plan to get there.

And key results are the numerical measure you use to assess whether you are headed toward or achieving your ultimate goals.

Make goal-setting bi-directional

Consult the OKR Bible (Measure What Matters by John Doerr) and you’ll learn that “high-functioning teams thrive on a creative tension between top-down and bottom-up goal setting.”

In other words: OKRs should be adaptable enough to accommodate collaboration between leadership and the people who do the work day-to-day. Both sides have different insights they bring to the table that will hone your OKRs (as well as the tactics you use to achieve them).

Arpit Sharma, COO of PWR Labs, a Web3 technology company, explained how yearly goals often deteriorate for businesses where so much can change in just a few months. Annual goals can force teams to focus on "static plans" when there are opportunities to plan in real-time.

Arpit Sharma, COO of PWR Labs Quote Graphic

Acknowledge you likely won’t get it right the first time—but still check in bi-weekly

Once those OKRs are in place, the real work begins. The work of check-ins and assessments and continually being willing to update or even abandon what isn’t working.

Because the truth is that the only thing that doesn’t change is change itself. And your OKRs need to be ready to roll with a variety of punches—for good or bad—such as:

  • When company values or culture shift (especially with new leadership)
  • When experimental projects or measures fail to make gains toward expected outcomes
  • When new tools become available and change ways of working or what is achievable (rending your OKRs either too-easy or impossible)
  • When world events change the resources we have access to or the way we do business (as in the case of the paper shortages impacting the publishing industry or the way Covid shifted business culture in an instant)

Not to mention that creating useful OKRs is an ongoing process even if nothing is changing at the leadership or business level. It’s not something that anyone “gets right” on day one.

As John Doerr explains in Measure What Matters:

You’re not going to get the system just right the first time around. It’s not going to be perfect the second or third time, either. But don’t get discouraged. Persevere. You need to adapt it and make it your own.”

Sixty percent of companies with OKRs report a check-in cadence that is at least bi-weekly—and we recommend you join them. These are not your grandfather’s quarterly OKRs. They’re living, ever-changing parts of your organization—meant to steer the cruise ship and also react to changes in the ship, weather, sea, currents, passengers, staff, and so on.

Kill your darlings

Speaking of change, as you check in regularly with your OKRs, it’s vital to understand that not every objective or key result deserves to survive.

Sometimes, company values, high-level goals, or even what’s possible within a company change completely—due to everything from new tools to unforeseen circumstances. In many cases, that means tweaking your OKRs. But sometimes they simply become obsolete. And keeping them around will only impair your team.

As DoubleLoop CEO Daniel Schmidt said in a recent piece, “Sometimes, through contemplating KRs, we realize that projects we were convinced must be done actually don’t fit with company priorities and therefore shouldn’t be done after all.”

It can be hard to let go of something we have so painstakingly crafted, but beware the sunk costs mentality. The truth is that letting go often moves us faster toward our real goals.

In summary: agility and adaptable OKRs go hand-in-hand

It’s clear that agile practices can make a huge difference to a company’s bottom line. Just ask Sears Holding Company, which found that OKRs came with an average sales increase of 8.5%.

It’s also clear—as demonstrated by companies like Walmart, Verizon, and eBay—that Enterprise companies are not too big to make the shift. With the right tools and mindsets, Enterprises can choose agility over outdated, immovable processes and systems.

To get there, we need to prioritize adaptability and agility across all processes and strategic choices—including (and perhaps beginning with) our OKRs.

You can get there by planning ambitious and flexible goals early, connecting the dots between goals and outcomes, implementing bi-directional goal-setting, understanding it might not work right away, and being ready to pivot goals if your original ideas aren't cutting it.

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