Similar to every other field, software engineering is about accomplishing set objectives that eventually benefit the organization, the engineers, and, most importantly, the end-users. Objectives and Key Results or OKRs for software engineering teams help track progress and keep everyone on the same page.
According to London Business School, only a third of senior managers can name the top priorities of their respective companies. Meanwhile, only 16% of frontline employees know how their contributions connect to the enterprise's priorities.
The concerning level of disconnection between management, employees, and corporate priorities could be attributed to poorly-designed or absent OKRs. Goal setting offers a fool-proof way to bridge this gap, ensuring the strategic alignment of every team member with the company's goals.
Let's explore some common OKRs for software engineering teams and why there's an absolute necessity in the development process. Today, we also explain the advantages and disadvantages of OKRs software development teams.
Objectives and Key Results, or OKRs, stands for a goal-setting approach. The method was fully introduced by John Doerr, an American investor and a venture capitalist, and is now used in almost every industry, irrespective of the scale and scope of work.
Essentially, the OKR methodology involves pairing the objectives with the key results to ensure that the team or company's day-to-day operations get aligned with the results. To some extent, all companies have a framework for setting goals. So, what sets OKRs apart?
Only 16% of the employees report that their companies can effectively set and communicate goals. The OKR framework should lower this inefficiency of organizations in terms of goal-setting.
The two components of an OKR are Objective and Key Results. The objective refers to the goal the software engineering team wants to achieve. For instance, a software engineering team may want to lower the hang time for mobile app users.
The key results are the metrics the team will use to measure the progress of their objective. In our example, the key outcomes include redesigning the database to allow quicker user access or less than 1000ms hang time.
Software engineering teams can approach setting OKRs in different ways. But one of the most popular methods is to have individual engineers set their own goals, with the manager acting as a facilitator. Managers can then group these goals by area of focus (e.g., back-end infrastructure, front-end design) and track the company's progress towards its overall objectives.
OKRs vs KPIs
Often, when setting goals for the organization, many software teams use OKRs and KPIs interchangeably, although they both have different purposes. OKRs measure the progress of an organization towards a specific goal. On the other hand, KPIs evaluate the performance of an organization over time.
KPIs or Key Performance Indicators gauge or assess the performance of a team, project, individual, program, or action in a certain period. These indicators must be linked to some objectives and measured against tangible targets.
Typically, KPIs are measurable. With a quantitative approach, it's easier to compare the performance of different periods or teams. Meanwhile, in an OKR, a set objective is associated with results. While OKRs work as a strategic framework, KPIs are the measurements in a framework.
Commonly, companies have three to five objectives, and every one of them has three to five key results. All OKRs must be quantifiable, timelines, and ambitious. If a goal is easy to achieve without putting in considerable effort, we can't call it an aggressive OKR.
Here are some other facts about KPIs and OKRs:
- Foundation: KPIs are founded on future goals or past results, whereas OKRs are associated with a mission and are mostly directional.
- Direction: KPIs monitor the benchmarks and steady states, while OKRs are bold and aggressive. The latter is supposed to be ambitious to be an effective method.
- Duration: KPIs are measured regularly, while OKRs are tracked quarterly or time-bound in some way.
- Lifespan: The lifespan for both OKRs and KPIs can be from quarterly to yearly, depending on the company.
Previously, companies like Intel and Google were using OKRs. Today, other top organizations, such as Spotify, LinkedIn, and Amazon, have found OKRs beneficial in overall growth and goal management.
Example of OKR vs KPI
Let's explore the difference between OKR and KPI through an example. Sprint Burndown is a common illustration of the key performance indicator for software engineering teams. It's a representation that shows the rate at which a team can complete work in a sprint. The aim is to have the line on the graph decline as the sprint progresses, indicating steady progress.
A typical example of an objective for this KPI could be "Reduce the number of tasks completed in the final day of the sprint." Meanwhile, an OKR will have a goal followed by three to five key results. Suppose a software engineering team is working on a healthcare portal. The objective could be to fix the portal for consumers. The key results for this objective could likely be:
- 1000ms response time
- Less than 1% error rate
- 99.9% uptime
As evident from this example, KPIs may sometimes be the key results for an OKR. For instance, Website Time is a KPI used to track the time during which your website is available for the users.
OKR Advantages and Disadvantages
Setting OKRs can have its fair share of advantages and disadvantages for a company and individual software teams. Therefore, you must be familiar with all potential outcomes before finalizing a decision regarding goal-setting.
Advantages of OKRs
Although OKR is not the only goal-setting strategy, it has emerged as more effective than others. Here are some benefits of using OKRs:
Provides Actionable Goal-Setting
Setting goals without the right plan is almost like setting yourself up for failure. One of the major benefits of using OKRs is that they are actionable. Individuals and teams can directly translate them into tasks. Breaking down the objectives into manageable chunks makes it easier to achieve them.
When you have specific objectives, you know how your everyday tasks align with the result you want to achieve. A well-defined set of OKRs can help clarify the company's priorities and communicate them to every level of the organization. That's mainly because of the inherent structure of an OKR. You don't have to waste time determining how to phrase your objectives. The OKR methodology is quite simple: We will (objective), measured by the following (key results).
Leaves Room for Stretch Goals
A stretch goal is above and beyond the common objectives of a company or individual. It's something that is ambitious and might seem impossible at first glance. However, achieving stretch goals can result in a breakthrough for your business, and this is where OKRs come in handy. The methodology provides the perfect framework for setting stretch goals.
Since stretch goals are not typical objectives, it can be challenging to measure them using traditional KPIs. However, with OKRs, you can easily include them as part of your key results. Doing so will help track your progress and ensure that you're on the right track to achieving the ambitious goal.
Aligns Employees With Corporate Goals
According to Harvard Business Review, employees who don't know what roles they play in a company's success tend to become disengaged. To prevent this, companies should clearly communicate their goals to employees. They should also use frameworks that show the employees how their everyday tasks contribute to the big picture.
OKRs help align employees with corporate goals. Measurable objectives and key results can aid employees in better understanding their roles and job requirements. In addition, tracking progress against the objectives will give employees a sense of accomplishment. For instance, each one of the OKRs software engineers will know that they're doing something that contributes to the whole story. Such an approach is the secret sauce to an organization's success.
Inspires Transparency and Accountability
OKRs software developers and engineers set from themselves also help induce transparency and accountability in a company. Everyone can see how each team is performing against the company's objectives. In other words, there are no secrets when it comes to OKRs.
More importantly, everyone gets held accountable for their actions, or lack thereof, if the key results are not satisfying. Since there's a clear framework in place, it's easy to see which teams or individuals should be accountable for specific tasks.
Enhances Employee Engagement
A Gallup survey showed that only 36% of the employees are engaged in the workplace, which is quite concerning. One of the reasons for this may be that employees don't know how their daily tasks relate to end goals.
When the employees don't feel they're actively contributing to the organization, they're likely to be less engaged or disengaged completely. OKRs can help change this by giving employees a sense of ownership and involvement.
With OKRs in place, employees can see how significant their work is and measure their contribution to overall success. Tracking progress against objectives will help keep employees motivated as they can see the tangible results of their efforts.
Disadvantages of OKRs
While OKRs for software development teams tend to be advantageous in most cases, they are not without challenges. We listed the two most significant ones to consider when using this method.
Tricky Company-Wide Alignment
Suppose the software engineering teams set OKRs for the year. The marketing, sales, and HR teams do the same. While OKRs may help each department succeed individually, they may miss reaching the final objective of an organization as a whole. Sometimes, it can be challenging to blend OKRs of all teams into an absolute one that spells the organization's aspirations.
In this case, an organization should have a goal for the year or the quarter. All teams should get introduced to this objective and create their OKRs around it so that individual efforts all align with the big picture.
Restrictive Key Results
Key results are a significant part of setting OKRs, but they can also be restrictive. Imagine your team wants to achieve a particular objective and has set key results for measuring the efforts. For example, one of your key results may be to get a 4-star rating for the customer support on the app your software team has designed. However, you may become overly focused on this.
Your team may have out-of-the-box ideas that could raise the rating even above 4. But since you've set rigid key results, the team might focus only on reaching that rather than taking the best route forward. Additionally, software engineering is a fast-paced niche, which means annually set key results can become outdated pretty quickly.
More importantly, OKRs should align the employees' tasks with the company's overall objectives. But if the key results are not well set, they may not apply to every team member's work.
OKR Best Practices
As mentioned above, poorly set OKRs can bring in a handful of challenges for the entire organization. However, OKRs software development teams set properly exceed all the disadvantages and can be a powerful tool for driving success. If you're wondering how to avoid common difficulties and set your goals perfectly, keep these practices in mind:
Set Relevant Objectives
Objectives should be relevant to the company's overall goals and vision. At the same time, they should also be suitable for the team members' day-to-day tasks. Aligning independent and big-picture goals is the only way to ensure everyone is on the same page and knows how to contribute to overall success.
If you're having trouble with this step, get perspectives from different departments. For example, the HR teams can help you understand why you even need OKRs in the first place. Meanwhile, the leadership can review the OKRs and determine their relevance.
Create SMART Objectives
Objectives should be Specific, Measurable, Achievable, Relevant, and Time-bound (SMART):
- Specificity allows for clarity and unambiguous interpretation.
- Measurability enables tracking and assessment of progress.
- Achievability ensures that the objective is realistic.
- Relevance indicates how important the objective is to the company's success.
- Time-bound stands for the due date for the completion of the objective.
It's essential to note that OKRs may also have stretch goals that are not always easy to achieve. You shouldn't feel too pressured or urge your teams to achieve these goals at impossible deadlines. While it's highly desirable to set stretch goals, it's also crucial to be sensible about the resources and the overall situation.
OKRs promote transparency in teams, but not without organizational support. That's why leaders should communicate with teams and inspire them to be transparent when sharing OKRs.
Transparency allows team members to hold one another accountable and track progress mutually. It also builds a trusting system between teams and the leadership, as leaders can better see all the effort their employees put into the company. On the other hand, employees get recognized for their work and feel more appreciated.
Use Objective Hierarchy
When creating the objectives, many companies miss doing so strategically. They develop plans without particular order, which can cause mentioned issues with OKRs. To avoid that, use an objective hierarchy. Start from the topmost goal and work your way down. The lower-level objectives should support the higher-level ones.
Companies should also encourage ownership and autonomy among employees by letting them set their OKRs. It will help engage employees since they tend to select OKRs that best align with their skill sets.
OKR Structure and Template
The structure of an OKR is quite simple. Firstly, you have to set an objective. Secondly, you need to establish key results based on that objective.
Let's see how this may work on an example. A software team may have an objective to improve its code quality. Here's how the structure of the OKR will look.
Improve code quality
- Fix five mid-level bugs in the first quarter of the year
- Increase code covered to 80% by March 30th
- Revise the documents for every feature created or updated during this quarter
Typically, all OKRs have a similar structure. You can expand them based on how complex the objective is. Teams can also use ready online templates if they don't want to create their own from scratch to visualize the OKRs.
3 Examples of OKRs for Software Engineers (Individual Contributors)
OKRs for software engineers may be individual or corporate. Individual OKRs are set by the employees themselves, based on their specific skills and role in the company. We listed some individual OKRs software developers can have.
Objective #1: Improve Out-of-Team Networking
Software engineers may want to network with other teams and individuals in the organization, such as sales or human resources. Networking helps boost productivity and can perfectly align with many corporate goals. How can software engineers do so? They can attend out-of-office meetups, lunches, and events other teams host.
- Have coffee or lunch with 3+ colleagues from another department
- Work on a hackathon project
- Join an online channel, such as Reddit or Slack, relevant to your project/niche
Objective #2: Advance Towards the Role of Senior Software Engineer
Constant progress is a motivating factor for many software engineers. A career-focused objective is quite common for many workers, not only software engineers.
- Complete two projects in the role of the lead engineer
- Mentor three interns this quarter
- Conduct at least five recruitment interviews in your organization
Objective #3: Increase Technical Knowledge
Software engineering is a changing field that requires a continuous update of knowledge and skills. Building technical knowledge could be an objective for the quarter or the year as it helps engineers progress to higher job positions.
- Take two technical classes this quarter
- Attend a conference every quarter
- Read three technical books
3 Example OKRs for Software Engineering Managers
The OKRs software engineering managers tend to have are different from others since they are in the interest of the whole team rather than an individual. These OKRs are also more complex, as we'll show in some examples.
Objective #1: Transition to Typescript
Typescript is a notable language for software development. As a manager, you may want to set an objective to transition the team to Typescript.
- Hire one Typescript engineer by the end of the quarter
- Move all front-end code to Typescript
- Use Typescript on five new projects this year
Objective #2: Optimize the Tech Stack
The tech stack is the foundation of a software engineering team. It's the combination of different tech used to build and run a project or application.
A tech stack includes everything from frameworks and databases to programming languages and front-end tools. Thus, it makes sense why software engineering managers might want to improve them. Here are the probable key results for this objective.
- Update the codebase to use the latest version of React
- Switch from MongoDB to Cassandra
- Eliminate three low-usage tools
Objective #3: Increase Diversity in Software Teams
Diversity in the workplace is more important than ever today, especially considering diverse teams make informed business decisions up to 87% of the time and are 70% more likely to penetrate new markets, increasing a company's potential for growth.
Diversity, Equity, and Inclusion or DEI is present in programs or workplaces where people from different backgrounds, cultures, races, genders, sexual orientations, and religions can contribute and participate without any discrimination. DEI is extremely important because it promotes a healthy and socially conscious environment where people can be themselves and contribute with their unique abilities.
- Revise the hiring process to make it fairer
- Hire a DEI consultant
- Increase the diversity of the software team by 10% in 6 months.
About Revelo and How We Can Help
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