Up until very recently, Objectives and Key Results (OKRs) haven’t been used to their full potential in the Project Portfolio Management (PPM) space, despite their role in helping businesses align on strategy and execution. That’s all changing, explains UK Managing Director of Planisware, Kai Ojo, as organisations recognise their value in coordinating company activities with their fundamental vision.
PPM is a system that companies have used for over 20 years to organise and prioritise projects. This system enables the proper allocation of resources and measurement of project progress and success. However, Forrester’s 2017 report, backed by further work done by Gartner in 2020, highlights a market shift away from PPM towards Strategic Portfolio Management (SPM). In this new era, OKRs play a definitive role.
‘Gartner defines Strategic Portfolio Management as a set of business capabilities, processes and supporting technology required for enterprise-wide portfolio management and adaptation, as well as successful digital business transformation and scaling. – Gartner, Magic Quadrant for Strategic Portfolio Management
The Gartner report goes on to say SPM requires management to ‘cross-rationalize […] portfolios to make informed business decisions.’ It’s an approach that requires the right technology to support an integrated system of investment planning, roadmaps, OKRs, flexible resourcing and project management methodologies such as Agile.
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SPM, then, represents a mature, aligned portfolio management model that is likely to replace traditional PPM for the majority of scaling enterprises in the coming years. By using OKRs, your business can start to make the transition to Strategic Portfolio Management. Here are the 3 key things to know before you delve into the world of OKRs:
They’re not what you think they are
One of the great features of the OKR approach is how simple the idea fundamentally is (you can explain it in under 3 minutes), and how it adapts to the peculiarities of each company. But this apparent simplicity can blind you to the fact that goal setting through OKRs is quite a subtle approach. To reap the benefits, the organisation needs to change its mindset about goals and objectives, and learn how to tackle the practical challenges of implementing OKRs.
Most companies have pretty clear “classical” company objectives, and it’s easy to just “translate” them into OKRs and be done with it. But the shape of your company OKRs is going to have a massive impact on the definition of OKRs at lower levels. If they don’t meet the criteria for “good” objectives, then you could find yourself trying to fit a square peg in a round hole over and over again as you cascade the OKRs down the organisation.
Your executives need to be on board
One of the top best practices for implementing OKRs is to use a phased roll-out starting with upper management first. This phase may take up anywhere between 6 months to a year. Yes, that long.
Part of the reason is that, until you’ve actually started to have these conversations about the company’s objectives, things often look quite simple: everyone has a good idea of what the company’s three top objectives should be, and they expect the whole process to go smoothly and quickly. That is, until everyone writes down what those three objectives are. And then, mayhem ensues… And that’s because nobody has the same three objectives. Companies routinely report ending up with a list of anywhere between 15 to 85 different objectives.
Until upper management have had hands-on experience of wrestling with OKRs, learning to build and use them in their routine life, it will be difficult for them to appreciate what the exercise is about. What’s more, having leaders work with OKRs first (and debugging the first issues) will strengthen their commitment (“It’s worth it! We’ve done it and it works!”) and allow the process to gain momentum.
OKRs must be separate from individual compensation
Fundamentally, OKRs aim to build a culture of accountability. For this to work, people should not be afraid to openly admit their missteps, otherwise they will be reluctant to take healthy risks. One part of that can be achieved through the modelling of upper management: if they are not afraid of admitting to their mistakes, then this opens the door for everyone to be a bit more candid about those moments when things didn’t quite work out.
But that cannot be all, because the accounting of successes and failures are often a big part in how compensation are awarded. We need to bear in mind that OKRs should be forward facing, ambitious goals designed to inspire teams – not a rear-view analysis of individual performance.
Enterprises have to iteratively adapt their strategies. But if adaptable project management best practices — like Agile — reduce the cost of changing your mind, then OKRs help you maintain the necessary focus in such a flexible system. They mitigate risks and bring you closer to your goals. We hope you now see the value of OKRs for Strategic Portfolio Management. If you’re interested in using our tool to help make this a fully integrated process, contact our team of experts. After all, we’re in the business of turning your objectives into results.
Planisware is a global provider of software solutions for project portfolio management and strategic portfolio management. Planisware solutions are specifically designed to support product development, engineering and IT business processes. For more than 20 years, Planisware has been helping its customers to achieve strategic and innovative excellence, make valid business decisions and increase portfolio value. Today, over 500 companies worldwide rely on Planisware products to manage their projects, resources and portfolios.
