Episode 37: Felipe Castro on Connecting Business Agility To OKRs
Oct 26, 2021
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Joining Mik in this episode is Felipe Castro, renowned author, speaker, and trainer on objectives and key results (OKRs). They discuss Felipe's experience as an early adopter of OKRs, common mistakes made with OKRs, the importance of unlearning and shortening feedback loops, and the characteristics of successful modern product teams.
The traditional project-based planning approach is no longer acceptable, and organizations need to shift towards outcome planning.
Short feedback loops are crucial in connecting people to outcomes and driving innovation.
Flow time, which refers to the lead time for delivering customer requests and receiving feedback, is essential for effective execution of OKRs.
Deep dives
Moving away from project-based planning
In this podcast episode, Felipe Castro, an expert on objectives and key results (OKRs), discusses why the traditional project-based planning approach is no longer acceptable for organizations. He explains that leaders and employees are no longer satisfied with just doing projects, but instead want to make a difference and achieve meaningful outcomes. Castro emphasizes the need for a shift towards outcome planning, where the focus is on the benefits or magical effects that organizations want to create and measure. He highlights the importance of unlearning old ways of working and adopting a new language centered around outcomes rather than activities.
The power of short feedback loops and outcome measurement
Castro and the host explore the significance of short feedback loops in connecting people to outcomes and driving innovation. They discuss the concept of selling cupcakes every week instead of spending months on a wedding cake project, emphasizing the importance of continuous learning, experimentation, and course correction. They stress the need for organizations to create an environment that enables fast feedback and experimentation. Additionally, they highlight the value of outcome measurement as it helps teams de-risk, iterate, and ensure they stay focused on achieving the desired outcomes. By focusing on outcomes and utilizing short feedback loops, organizations can break down silos and drive effective results.
Overcoming the challenge of translating high-level objectives into actionable outcomes
The podcast delves into the challenge of translating high-level business objectives into actionable outcomes at various levels of an organization. Castro discusses the tendency for objectives to be turned into activities or waterfall roadmaps, losing sight of the true outcomes. He emphasizes the need for discipline in managing separate buckets for objectives, key results, and activities. By clearly defining objectives as the problem or opportunity, key results as the desired outcomes, and activities as the options or ideas to be tested, organizations can avoid falling into the trap of mixing them up. Castro emphasizes that unlearning old habits and adopting outcome planning with clarity and precision are essential to ensure that goals are linked to measurable outcomes.
The Importance of Shortening Flow Time
One key point discussed in the podcast is the importance of shortening flow time. The speaker explains that flow time, which refers to the lead time for delivering customer requests and receiving feedback, is crucial for effective application of OKRs (Objectives and Key Results). If the flow time exceeds 90 days, the feedback cycle becomes too long and hinders the ability to measure outcomes and drive improvement. The podcast emphasizes the need to create conditions that enable faster delivery and shorter flow time, enabling teams to measure the impact of their work on metrics such as retention, active usage, and net promoter scores. The goal is to transition from lengthy lead times to shorter flow times, ultimately enabling data-driven decision making and experimentation.
The Shift from Traditional to Modern Product Teams
Another main idea discussed in the podcast is the shift from traditional enterprise models to modern product teams. The speaker highlights the stark differences between the two approaches, with modern product teams having shorter flow times, measuring software effectiveness through telemetry and observability, and working closely with customers and business needs. In contrast, traditional enterprise models often have long flow times, limited telemetry, and are far removed from the customer. The podcast emphasizes the need for organizations to adopt the tools, techniques, and mindset of modern product teams, enabling faster iterations, measurement, and experimentation. By aligning with modern approaches, organizations can drive digital transformation, improve outcomes, and effectively implement OKRs.
We're back! And what an episode we have to kick things off. Joining Mik in this episode of Mik + One is Felipe Castro, renowned author, speaker and trainer on objectives and key results (OKRs).
In this episode, Mik and Felipe talk about how Felipe helps organizations transform how they use goals by adopting OKRs, and other key topics such as:
How Felipe became an early adopter of OKRs
Common mistakes organizations use when leveraging OKRs
Why unlearning is the solution to change the ways of working
The importance of shortening Feedback loops to manage risks and connect people to outcomes
Characteristics of successful modern product teams
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