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OKRs vs Scrum: Essential Guide to Agile Organizations

OKRs vs Scrum: Essential Guide to Agile Organizations

How do OKRs (Objectives and Key Results), Scrum, and Agile fit together?

According to McKinsey, these terms are key in agile organizations, yet they often cause confusion. Some people might mix up OKRs with Agile or think Agile and Scrum are the same.

This confusion can grow especially when companies adopt both OKRs and Scrum as part of their approach to being more agile, leaving employees puzzled about how these elements work together.

In this article, we’ll clarify these three concepts to help you understand their roles and how they differ, clearing up any confusion. 

More importantly, we will provide templates of OKRs and methods of using the Huddles AI meeting assistant to make your OKR meeting clear and practicable.

Your AI-powered meeting assistant — Huddles

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The Origin of the Waterfall Model

OKR is developed from the Waterfall model. The Waterfall model is the origin of Agile development. It’s a predominant model in the tech industry and software development. The most common variants of the Waterfall model include the following five phases (as shown in the diagram below):

    The Waterfall model is a linear and static structure, resulting in highly rigid processes and objectives, inhibiting agility from the start. This type of workflow made perfect sense in the 1970s when external environments were more predictable.

    The Waterfall thinking was based on four major misconceptions:

    1. We can foresee all the steps of a plan in advance in detail.
    2. Most of our plans will prove to be correct.
    3. The market environment won’t change or will change minimally.
    4. Change is minimal; a biennial review is sufficient to address any potential changes.

    However, the linear and static nature of the Waterfall model has become largely outdated in the increasingly complex business world today. New paradigms and methodologies like Agile, Scrum, or OKRs offer more suitable answers to our new challenges.

    What is Agile Management?

    The term “Agile” was coined by three scientists from Lehigh University in Bethlehem, Pennsylvania. According to their perspective, agility refers to a particular form of organizational management characterized by forward-thinking, flexibility, and proactiveness in everyday work.

    They believed that “traditional” organizations tend to work in a way that is process or project-oriented. The resulting strict hierarchical systems may increasingly hinder and paralyze organizations in the modern, unstable market realities.

    To distinguish themselves from traditional organizational cultures, they defined six dimensions for agility that must be present in an organization to be considered “Agile.”

    These dimensions are as follows:

    • Agile Vision and Mission.
    • Customer-Centric Organizational Structure.
    • Iterative Process Objectives.
    • Employee-Centric Leadership.
    • Agile Personnel and Management Tools.
    • Agile Organizational Culture.

    In February 2001, 17 software industry experts gathered at a ski lodge in Snowbird, Utah. After several days of discussions and debates, they collaboratively authored the “Agile Software Development Manifesto.” The term “Agile” began to gain traction, and the methods discussed at that time were specifically related to software development, eventually leading to the development of methods like “Scrum.” 

    Check out our separate article to identify your current level on the Agile Leadership Development spectrum.

    What is the Scrum Method?

    Scrum is a project management framework that ties various events (meetings), artifacts (such as the backlog), and roles (responsibilities) together through specific rules to facilitate agile work in software development.

    The term “Scrum” originally comes from sports, describing the Scrum formation in rugby matches.

    American software developer Ken Schwaber formalized Scrum in 1993. He stated:

    “Scrum acknowledges that the software development process is unpredictable. Given cost, functionality, time, and quality, the best software is that which does the most for the least.”

    Sprints

    Scrum is primarily based on the concept of “sprints”:

    • A Sprint represents a defined time unit during which the team commits to specific tasks.
    • Sprints typically last from one week to one month.
    • Each sprint ends with a review, meaning the Scrum team – as well as other key stakeholders – reviews the progress made at the end of the sprint, laying the foundation for the next sprint.
    • After the review, a new item is selected from the product backlog, and a new sprint begins, addressing new key tasks one after another.
    • During the Sprint, there is a daily Scrum stand-up meeting where the team briefly reports progress. The daily Scrum stand-up meeting should not exceed 15 minutes.

    Scrum Framework

    This picture shows how the Scrum framework works. It begins by dealing with the product backlog to set up a sprint cycle, plan for the sprint period, and tackle issues. During this time, daily sprint goals are established, and a daily Scrum stand-up meeting is held.

    After the sprint, employee performance is assessed, decisions about rewards may be made, and a retrospective is done.

    Sprint Review and Sprint Retrospective are important Scrum events worldwide. The Sprint Review displays recent work, while the Sprint Retrospective focuses on reflecting and suggesting improvements. Both events take place at the end of a sprint but have different purposes.

    The Sprint Review involves sharing completed work with team members and stakeholders, getting feedback, and celebrating achievements. The Sprint Retrospective lets the team review successes, propose improvements, and is internal to the project team.

    By following these processes and using Scrum elements, agile work can be achieved in project and product management.

    OKR and Agile

    But what about the other aspects of agility mentioned earlier? This is where OKR comes into play. When a company is trying to move towards agility, OKR is often the missing piece of the puzzle, as many organizations rely solely on Scrum.

    This is because Scrum is about operational agility, while OKR is about strategic goal-setting. However, combining these two agile approaches is the perfect foundation for creating a truly agile organization.

    OKR stands for “Objectives and Key Results” and describes a management system that is centered around goal orientation, is more modern, and flexible in its approach. Objectives are qualitative and inspirational, and their achievement is measured and controlled through key results.

    Unlike Scrum, OKR is not an agile software development methodology; it carries the same “agile” spirit as a concept in itself. When understood and applied within an organization, OKR helps make the organization more agile for several reasons:

    1. Setting Goals More Often:
    In today’s fast-paced work environment, sticking to yearly goal-setting can slow down responsiveness. OKRs suggest setting goals every quarter, offering four opportunities annually to adjust to changes and improve agility.

    2. Transparency and Better Communication:
    OKRs boost transparency by making goals visible and encouraging team communication. By aligning team goals with company objectives and holding regular check-ins, OKRs support communication and agility.

    3. Being Consistent:
    OKRs ensure consistency by linking strategy with execution, guiding all members in the same direction while preserving autonomy. This unity replaces confusion, promoting agility within organizations.

    4. Encouraging Autonomy and Self-Organization:
    OKRs empower teams to define their objectives, fostering autonomy and self-organization. This shift allows swift, responsive actions without lengthy approvals, enhancing flexibility and motivation.

    5. Emphasizing Results, Not Just Outputs:
    Unlike Scrum, OKRs prioritize achieving measurable results over mere outputs. This customer-focused approach encourages organizations to grasp customer needs, establish feedback loops, and adjust promptly, boosting agility and adaptability.

    Conclusion

    As mentioned earlier, OKRs and Scrum can be used together. When these two frameworks are appropriately combined, they create a perfect synergy for overall agility, becoming powerful tools for agile organizations.

    However, it’s essential for everyone to have a deep understanding of each objective, the purpose behind it, and internalize it. Additionally, it’s recommended that organizations define OKRs first, as they have a longer time frame compared to Scrum sprints.

    Level Up Your Agile Team with Huddles

    Huddles.app is an AI-powered meeting notes app that was developed around core ideas of agile teams. Without a traditional leader directing and coordinating everything, meetings become a crucial part of team communication and ultimately play a big role in a team’s productivity. Huddles is created to significantly improve the efficiency of your team’s meetings, supporting self-management. Here are some features that we offer.

    1. Collaborative Agenda Building and Note-taking: Huddles lets your team work together to set up agendas before meetings begin and jointly take notes during the meetings. Any member can suggest topics for discussion, providing any necessary information in advance on the agenda for everyone to see. Notes are made as a team in real time, ensuring everyone is always on the same page.
    2. Audio Transcription: Regardless of the platform your team uses, or even if your meetings are held in person, Huddles can fit smoothly into your routine as long as there’s a way to record the audio. With just one device capturing sound, it can transcribe your entire meeting, keeping a written record for future reference.
    3. Real-time AI Summary: From your audio recordings, our AI-powered tool identifies key points and creates summaries as the meeting goes on. These summaries can be directly added to the main notes if they’re helpful. This process happens instantly, allowing you to use these insights immediately.
    4. Conclusion Sorting: Our AI organizes your meeting outcomes by category (key points, decisions, action items, policies) to give you a clear understanding of what was accomplished during your meetings.
    5. Action Tracking: With Huddles, assigning tasks and deadlines is straightforward and quick. Once tasks are assigned, they’re automatically added to the recipient’s to-do list and tracked. Follow-ups on these tasks are also automatically managed in future meetings.

    Free OKR Template

    Here’s a free OKR template that we use in Huddles. We hope that it can help you understand what OKR agile is and how it’s implemented through out an organization. You can access this template for free in Huddles’ template gallery, or grab our OKR meeting template on Notion for free!

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