Transcript:

Joe Krebs 0:20

Welcome back to another episode of Agile FM, my first recording of 2023. I'm going into my second decade of agile FM. And I'm super, super happy to have Jeff Gothelf back to Agile FM, author doesn't really need an introduction, but he's the author of Lean UX, Sense and Respond and Forever Employable and Lean vs Agile versus Design Thinking. And maybe there is another one in the making, we can talk about. First and foremost, Jeff, welcome to the podcast again.

Jeff Gothelf 0:53

It's a pleasure to see you. We were just talking before you hit record how long we've known each other. And it's fun, it's fun to keep chatting all these years and seeing where these conversations go. Because because they do get interesting. Like they don't they don't get stale. And it all evolves, you know,

Joe Krebs 1:08

thank you. Yes, and we go all the way back, I mean, to today's we're agile are very, very different. You wrote several books in between. I've been active not only here on the podcast, but also through work. And so our paths constantly cross. And obviously, you always have interesting content to share. Today, we want to talk a little bit about our OKR's. On social media, I see you a lot of responses and material you're releasing on OKR's. And you are obviously very, very interested in this topic. And it's not brand new. So there are some people that are talking about OKRs. What is OKRs? But I did some research on it. It's It's It's old, but obviously it hasn't really taken off at that time. So it really started like, way before, but Google really started introducing OKRs as far as that's my understanding, but even at that time, it wasn't really popularized. What's what's attracted you to OKRs?

Jeff Gothelf 2:11

Yeah, super interesting, right? So it's a technique, it's been around for more than 40 years, Andy Grove at Intel. And for him, you know, managing by walking, management by objective, sorry, management by objective was kind of the first name for it. And then Google popularized it. What's interesting to me about it, and it's kind of like the same thing that happened with with sort of Lean and Agile and Lean startup and all these different things is that I think the reason why objectives and key results are having their moment in the sun right now. And everybody's interested, is because the technology that we use to deliver products and services, and build businesses on top of today is continuous. And it allows us to learn continuously, and at the pace of the market. So whereas if you think about, you know, when I started working professionally, in the late 90s, I worked in America Online, you know, it was far from continuous, right? We, it was very much not continuous, we worked for nine months to build software, and then print 15 million CDs, and then send them out, and then wait to see what happens, right? I think OKRs would have failed, because it would take too long to get feedback on whether or not you had a meaningful impact on the people who used your, your product or your service. And so as a goal setting framework, it would have been too bad. But today, you can get feedback instantaneously, if you've got enough of an audience size, and certainly very quickly in in a in the majority of cases. And so this is why this is an interesting topic. For me. Number one, I think this is why it's getting a lot of attention. The interesting thing here is that, in my opinion, and I can explain this in a minute, I think objectives and key results are the gateway to agility. Right? So if we can keep capital A agile out of it for just a second, right? And we talk about the the noun agility. I think that objectives and key results, when done correctly, demand that an organization behaves in an agile way that they increase their agility, we can explain why. But to me, that's why I'm so passionate about it these days, is because for all the organizations that have implemented some version of agile some version of Lean UX for Lean startup or design thinking, and I've struggled with it. I believe that if now if they if they kind of give it another shot and they start with OKR's as their goals, they stand a better chance of succeeding.

Joe Krebs 5:02

Goal setting. And I actually like your your comment about the entry point or the the access point for for agility. That aside, I've been in my career I've been goal setting and goal and strategies and etc. I've been listening to this for a long, long time in organizations since I can think of in my professional career. Why is it so difficult? There? What do you think why, from a leadership perspective? Why does it seem so, so hard? The goal setting piece, I think, and I don't want to speak for everybody, but it feels like we're pretty good whether, you know, agile on the team level, building a product, maybe scaling, things like that. So there's a lot of things we have, but it's like the goal setting piece seems to be like, struggling, why do you think that is?

Jeff Gothelf 5:52

Yeah, look, I think leadership has been trained on 100 years of management, Canon that's based heavily in production, right. And we've I know, we've talked about this in the past, but their managers are trained to optimize production even today, which doesn't make sense in a software based world as, as you know. And so you've got the, the staff of a team of an enterprise or an organization trying to work in an agile way. And they have demands being put on them that are very linear, that are production oriented, that are very prescriptive, go build me this thing, make sure it does these three things, doesn't mean this way, and just try to get it done by Friday, if you can, and that grinds the gears grind there, right? You got agile sort of turned teams trying to go one way, and the organizational and leadership demands going the other way. And but but it's first of all, management's comfortable with that way of setting goals. It's super easy to measure. It's binary. Right? But it's it's you know, did you make the thing? Yeah, here's the thing. I made it, right. Yeah. So if you made the thing, then you did a good job, and I should reward you and I can, and it's easy to measure, right? I didn't make the thing that didn't make the thing, easy to measure, easy to manage, easy to reward. When we change the goal. And this is what OKR's does, right? This is OKR's. At its core, when done correctly, and why it's powerful is the goal changes from output to outcome, it changes from making a thing to positively impact the behavior of the person using the thing, right. Now, the interesting thing about that is that that is not binary. So for example, let's talk, you know, you could say, an output goal could be build a mobile app. Okay, maybe we built the mobile app, okay. And outcome version of that said, we'd like to get at least 50% of our revenue to come through the mobile channel. Like we'd like people to spend at least 50% of the money that they spend with us through the mobile channel, right? That's a behavior change. Right? The goal is not deliver a mobile app, the goal is get folks to spend at least half of their of their, you know, lifetime value, whatever you want to call it. Through the mobile channel. Yeah. Now, let's say, let's say that you give that goal to a team. And at the end of a quarter, six months, they come back and say, look, we got you know, about 27% of the revenues coming through the mobile channel. What do you do with that team? Did they do a good job? They do a bad job? Did you fire them? Like they didn't they didn't hit 50%. And that becomes really difficult. That's one of the ways why this becomes difficult, right? Is this sense of... Well, I don't know what to do with that. Because like, what if they hit 42%? Or 27? May be right. But if they got to 42%, or 43%? What do you do with that as a manager? Right. And I don't think that leadership is the folks who are in leadership positions are necessarily equipped to deal with that today. And I think that's, that's one of the main reasons why this goal setting is challenging. The other reason why this is challenging is because I think leaders are used to telling people what to do. Go make this thing, build it this way and ship it by Friday, when you change that when you change from output to outcome, or build me the mobile app. Clear, super clear in the sense that like, okay, and I want the mobile app to enable online commerce and search and make sure everybody's got a profile. Okay. Right. Drive 50% of revenue through the mobile channel, does not tell the team what to do. And that is really scary for people in a leadership position. Because all of a sudden, they don't really have an answer to the question. Well, what is the team doing right now? What's the team working on? And that's terrifying, because they feel like they should know that and a certain degree they should. And they also feel like they should be telling them that. So there's that there's a trust that they have to have in a team that the team is making good decisions.

Joe Krebs 10:14

Seems to be like a cultural changes is needed, not only for OKR, but also for everything that follows the OKR. Right? Because it's the it's not only the framework of understanding how to set goals differently, but it's also how to work differently, right, to your point like 42%. I mean, is that a negative result? You know, in 50%, we are on you know, if that was a lengthy process, let's say, of building a product, there could be many things could happen, that could be still a success, right? So it's an interesting thing. In terms of leadership, there is another tool for for leaders to acquire. Right? That's, I think that's what I'm hearing. Like, it's not only you understand OKR, but also to understand the Agile piece entirely working with teams.

Jeff Gothelf 11:00

It's, it's highly complementary to Agile or Agility. Number one, and we'll talk about that in a second. But the it's such a simple concept. And yet it is so difficult to implement simply by switching from managing the output to managing outcome, right? So overall, if we just I can define it for you in 30 seconds, right? The objective is qualitative, aspirational, inspirational and time bound. The reason we get out of bed every morning, right? We want to be the go to destination for online furniture sales in Europe by the end of the year. Right? That's a qualitative aspiration. Why are we doing this? Because we're trying to be the go to destination for online furniture sales in Europe by the end of the year. Okay, easy enough? How do we know we've done that the key results are measures of human behavior, right, they are the things that people will do differently, that tell us that we are the go to destination for online furniture sales in Europe. Right? That is that, that that's critical. And it's things like, it could be average order value, could be repeat customer, the percentage of repeat customers, it could be referrals as plus lots of different behaviors that we could measure. They're super easy concept. But as you start to implement it, this is where it gets difficult. So we talked about measurement, right? We talked about the fact that you're not telling teams, what to build, and then and then on top, but the compatibility here with agile ways of working and agility is, is it's nearly an overlapping circle. Because essentially, what you're saying is team, I need you to go out and discover continuous learning and improvement and iteration, the best combination of code, copy, design, value proposition, business model, that will affect behavior change in this way. So the team conceives hypotheses, begins to do discovery work and discovery work is design thinking, Lean UX, lean startup research, etc. And then based on that evidence, they start to invest in the hypotheses that deliver the behavior change that they're looking for. And they remove effort or or pivot or kill the hypotheses that don't deliver the behavior change that we're looking for. And to be clear, changing course, based on evidence is being agile. So it's highly, highly compatible. But it takes this tremendous, to your point, cultural and organizational shift in understanding how, how work has to shift to to account for this new goal.

Joe Krebs 14:00

We got the leadership, there's definitely a different kind of engagement and involvement is needed, right? Coming in, you know, using OKR's. And working with agile teams, if we're going on to the agile team level. So what I hear is, the teams are focusing on outcomes rather than output. Right. And but you also and this is very interesting, because I think that brings out the self-organization, part of an often team really clearly is the team's should not be focused on the features. So we shouldn't be focusing on features we should be focusing on the on the outcome. How do we have to see that that's an interesting piece. I came across one of your LinkedIn in posts recently, and it was it was quite interesting why so not to focus on the features but to focus on the outcomes that really drives a total behavioral change on a team level?

Jeff Gothelf 14:53

Yeah.

Joe Krebs 14:56

And so let's explore a little bit.

Jeff Gothelf 15:00

Go back 20 years in time, the delivery of software to production 20 years ago, even 10 years ago, for the majority of organizations out there was an event. Right? It was a thing. Like, I mean, honestly, we had parties. Literally, we literally threw parties when we delivered software to production, because it took nine months to get there. Right. Right. And, and you know, and we get a t-shirt with the name of the project on and we celebrate the delivery of software, right? Today, you can ship software to production, if you choose to as an organization as fast as you want. There's literally no limit on it, Amazon's doing it once every second. That's, that's kind of the speed. And so the delivery of software is a non event at this point, right? Our ability to get ideas into the hands of customers, to learn whether or not it positively impacted their behavior in ways that we expect it or not. And then to react to that to ship sense and respond if you'll indulge me a little promotion of our second book, right. Is is it's in everybody's fingertips. Right. And so this, this idea that we're focusing on a feature doesn't really matter, of course, we have to ship the features. But we can ship anything we want as quickly as we want. And so the sooner at end, any of our assumptions or hypotheses are going to be wrong to some extent. And so the sooner that we can find out where we're wrong, and where we're right, allows us to change course, and to adjust more quickly, right, that's the agility that we're looking for. And so that begins. And because the delivery of software is is a non event, the focus isn't on, did we get the thing out the door? It's getting the thing out the door, shift the behavior in the right way? And if it didn't? Let's find out why. And if it did, let's find out why. And do more of that. To me, that's, it's a really difficult conversation for everybody involved in the management and the delivery of products, digital products and services. Because it's really easy to think about features. It's a concrete thing.

Joe Krebs 17:20

Well, Jeff, you have so far published 4 books, right, if I counted correctly. And this is not the big reveal, I would assume and in the world of agile books, but there is a book 5 in the making.

Jeff Gothelf 17:33

There is there is and I'm super excited to be co-writing with Josh Seidenn again, I've continued to work with Josh Seiden and continuously for 15 years at this point, we wrote Lean UX together, we wrote Sense and Respond together, we've built a couple of businesses together and we continue to deliver work together on a regular basis. And he had a tremendously successful that continue to be successful called Outcomes over Output. And so we decided to join forces again on a book and put out an OKR book, we're still working on a title, but the goal is to get it out in October of this year. And it's designed to be the practical, tactical guide for justifying OKR's and then writing them and kind of what happens next and how to implement them and what what to watch out for in a large organization. So if you think about sort of "Measure What Matters" John Doerr's book, sort of as the kind of the big, lofty introduction to OKRs, which has a few things in it that I don't necessarily agree with. Anything about Christina Wodtke's book, "Radical Focus", and if it was 2.0 is being fantastic. generally focused on a single team, though so it's kind of where's the sort of the practical guide for larger teams and teams at scale? That's what we are going for with this book. Super.

Joe Krebs 17:33

Yeah, super exciting right. And you also have a course like a self paced course about OKRs when you do a JeffGothelf.com if you if you had to, you know have like a thread through like in terms of topics and how they are like intertwined and you know, linked together out of those books do you see like, like lean UX obviously was a that was a big book coming out in the beginning of not your career, but authors career, right. And then obviously, now there is a book about OKR how does this all connect with each other? If you had to say like, okay, I wrote Lean UX I wrote sense and respond then lean versus agile versus design thinking and now there comes the other one, maybe even the one from Josh, that book that somehow also topic-wise fits in. But what is the theme here? What is what is it?

Jeff Gothelf 19:51

Yeah, it's a good question. And no one's ever asked me that question. So I liked this question. So lean UX was a sharing back of ways that we had figured out through trial and error for practicing design, user experience and design in Agile software development environments. That's kind of where it started in its first edition. And it's third edition. Now, it's a bit more broad about kind of how to how to teams design and build great products in an agile environment. The feedback from Lean UX since the day it came out was generally speaking. "I love the book", would love to work this way. My boss doesn't want let me my company doesn't work this way. And so to Josh and I, that was a clear call a sent a signal from the market that said, there's there's something to be done here. People want to work this way. But their bosses don't understand why or how. And so sense and respond was literally a response to the feedback that we sent from Lean UX. It was it was a business book, designed for leaders, I think we've met I think we may be used the word agile in there twice, in 50,000 words, and that was by design, right? It wasn't it was to try to build to write an evergreen book. And that that worked out well. And what's interesting is that, then folks began to take that advice to heart. And they started getting their team's training. And so we're hearing from our clients while we're in their training with with maybe with lean, lean UX, product discovery, design thinking. You know, there's a lot of agile training going on. And the feedback from organizations was looking for training everybody in lean startup and and Lean thinking and design thinking and lean UX and, and Agile and Scrum, and the magic isn't happening. Right? Why isn't the magic happening? And it's interesting, because I felt like we were pretty successful, like, convincing folks that stuff in Lean UX was good stuff in sense and respond was accurate. And now they were trying to make it all happen. But they were kind of buying sort of ad hoc training and trying to make it all together, make it all work together. So that's where Lean versus agile versus Design Thinking came from. And in hindsight, I regret not calling it lean and agile and design thinking, right? Like, that's the only the only change I would make, because fundamentally the the philosophies is the same in my opinion underneath those, those ideas. And so that would have helped people kind of get a better sense of how to unite those processes and build those environments. And then finally, kind of coming full circle to this OKR book today. It feels like, well, it's what we talked about before, right? It feels like the product development parts of an organization get it, right, they get, you know, lean agile and design thinking. But the leadership part of the organization is still making demands on them, that reflect reflect old ways of thinking and old ways of working. So, an OKR book, if it can convince an organization to set goals in this new way, paves the way for the product development teams to be successful with everything else. We've provided them over the last decade. So that's the thread between it all. And it's almost like we should have been done the OKR book first and come his way. But you know, here we are.

Joe Krebs 23:26

Yeah, no, it's it's awesome is many of those readers out there listeners, when we have read your material, they will know that not only will you write about it, it was going to be a great book away and as the other ones too. But it's also going to probably going to create a bigger interest in in that topic. So I'm excited about that. Because OKR's from what I understand is also creating a higher level of experimentation. Inspires is something I'm personally very interested about. Right. Soleaders, obviously, as we already pointed out, is is something that that would need to be coming on board with that kind of concept. And I think holistically drive this. This is super interesting. Yeah, that is, so if material out you have you you have training about this topic, you're writing a book about OKRs. And the title is still unknown. We don't know that yet.

Jeff Gothelf 24:26

It's TBD. I've been asking Chad GPT to help me and it's done. Okay, it's generated some decent site overall, at least at least. Something has sparked the brainstorm.

Joe Krebs 24:39

Yeah. Two quick questions at the at the end here. Before we before we depart. So if some leaders out there it's like is first time I really hear OKRs maybe something's like I've heard about it, but I really have no idea about OKR, what what's your recommendation for Leaders how to get started with that or possibly get warmed up to the topic. And also for maybe the other side, we have touched on in this podcast the teams, right? Like let's say there's a Scrum team. Let's just make it very specific. Right. And let's say there's a scrum team. How does Scrum and OKRs? How does that all link together? In your opinion?

Jeff Gothelf 25:21

Yeah. So, look, I think, I think there's a challenge. I wouldn't recommend Measure What Matters any more than what's on every executive desk, just because there's some things in there. Fundamentally, he's okay with, with outputs as key results, and I'm not. So so I have to disagree with that, I'm sorry. But otherwise, and I think like Christina's Wodtk's books are amazing, Christina Wodtke's Radical Focus is amazing. I just, you know, it's generally focused on startups and single teams. And so if you're looking for for sort of a quick primer, there is, first of all, is endless content on my blog, but the OKR course, which is, which is super, in my opinion, super affordable. It's 68 minutes of video. And I think that that's a fair ask, if you're looking for a very short distillation of that. I did a, I did a kind of a video podcast about two years ago, with a show called product beats. Swedish. Okay, folks, I think, and it was like 18 minutes long. And all I did was talk about OKRs for 18 minutes. And so if you just want to invest 18 minutes, that's a great, that's a great little podcast to get into. And that would really kind of break it down very, very clearly as to the what, how the why some of the, the traps and the things to watch out for. So those are good places to start. All those are good places to start.

Joe Krebs 26:52

Yeah, maybe people will later refer to this 25 minute podcast of Agile FM and say like that might be the starting point of the starting points, right?

Jeff Gothelf 27:00

I hope so.

Joe Krebs 27:02

What about teams? What are the changes on a scrum team? For example, if somebody says, Hey, we're going to introduce OKR's into our organization, what's the impact on the scrum team, for example?

Jeff Gothelf 27:11

So this is where it gets it. This is where it gets interesting, right? Because again, like, if you don't, if you don't tell the team what to make, they've got to go discover there, they've got to go figure it out. If they don't know how to do discovery, or if they're not allowed to do discovery, then they're just going to retrofit their existing backlog into the goals that you've set for them. And that gets us nowhere, right? Doesn't we've changed nothing at that point, right. And so what changes at the team level is you have to start doing discovery, and then building that into your sprints. So dual track agile, we know that term for a long time, by discovering delivery, with the same team doing both types of work, writing hypotheses, testing them changing things based on evidence, that's key. So if you don't know how to do that, you have to get training for it. If your company won't allow you to do that, but they're setting OKRs as goals, you have to raise your hand, you have to say, look, I appreciate you going down this path. But if we can't go and talk to customers, if we can't run experiments, if you won't allow us to carve time out of every sprint for learning, then we've changed nothing. You're not going anywhere.

Joe Krebs 28:21

Oh, that's cool. That's great advice, Jeff. This is, this is awesome. So we learned a lot. Jeff is working on a new book, it's gonna be about OKR's or related content. We heard a little bit about leaders, teams. We got a little bit of advice, and it's all packed into 25 minutes. There's only one sad piece about this podcast, and that is that I heard that we are not having any kind of launch parties anymore, no more printed T shirts those days are over. So for everybody releasing software today, you're missing out. But other than that, we're gonna see great improvements. That's awesome.

Jeff Gothelf 29:03

It is sad. I mean, I miss my projects diamond T-Shirt. Project emerald. That was the one after diamond. That was amazing.

Joe Krebs 29:13

It's awesome. Thanks, Jeff, for joining me on this podcast.

Jeff Gothelf 29:17

My pleasure. Thanks so much for having me. It's great chatting with us. Good to see you again.

Joe Krebs 29:23

Thank you for listening to Agile FM, the radio for the Agile community. I'm your host Joe Krebs. If you're interested in more programming and additional podcasts, please go to www agile.fm. Talk to you soon.

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