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Category: Business Strategy
Tags: AgilityExecutionKanbanOKRStrategy
Entities: Andy GroveDavid J. AndersonDimitar KarivalovIntelJohn DoerrKanbanOKRRichard RumeltToyota
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from what I can do you know uh so uh hello good afternoon everybody my name is managing director of learning Institute at Bulgaria and today I have the pleasure to introduce to you um Dimitar karivalov
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from companies a person in the IT world with I would say a very deep and profound knowledge about lean one of those people that actually started exploring clean deeply from the manufacturing perspective and
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then looking for ways to apply this in another I would say totally different industry we had Dimitri in our conference this year in Bulgaria and um and we we value so much the presentation that he did for us and I'm very happy to to have him today with another topic
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that I believe will be very interesting and exciting for all of you to hear it is related to the okrs and and companies and then like the kanban is the is the obviously the product and the company and the company's company is the one that combines this product with all
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KRS so stay tuned to understand a little bit more details around this and of course if you have any questions feel free to ask at the end so thank you very much the floor is yours thank you Vasco appreciate it hello everyone my name is Dimitar I'm very delighted and proud and
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grateful to be here I will be talking today about kanban and okrs and how they can help you achieve better agility and leanify your companies even more so let me share my screen and walk you through a quick
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presentation please confirm that you can see my screen what maybe you can confirm yeah we can see all right so let me get started without wasting any more time as I said the presentation is about
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kanban and okrs and when you sum those two you get okra and that's not the vegetable or the fruit it's an acronym about okrs plus activities or actions so how do you make your okrs more actionable
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and believe it or not that's actually a talk about strategy because you will know why in just a few minutes so let's talk about strategy what is a good strategy as a CEO of a company it's
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my responsibility to Define and make sure the strategy of our company is executed however this is not taught in school maybe if you get an MBA from a very good University you would know more about strategy but in the the mainstream
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education you wouldn't get too much about it so I had to learn that the hard way after many many errors in what I thought was our strategy along these years I actually came to to realize that
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good strategy is a very simple concept as everything simple it's actually hard to get it wasn't until I read a very nice book on strategy that I could grasp my head around it it's a book by a
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person called Richard Ramold who talks about the Strategic kernel or the kernel of strategy as he calls it and the book's name is good strategy bad strategy so I highly recommend that book for
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anybody who's in a senior management position it really helped me make strategic thinking something real and something more tangible it helped me not be abstract and vague and live in the
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realm of wishful thinking and help me be really actionable about strategy and I think Mr Roman for the success of my company because I think a lot of it should be attributed to that book so what is the kernel of good strategy well
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first of all you start with a diagnosis the the diagnosis is um answering the question what's going on here what challenges should we be solving and what
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opportunities are there in front of our company and I want to mention that you may have multiple strategies concerning multiple challenges or multiple opportunities so you don't have only one strategy you
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have different strategies for different important topics you want to tackle once you've answered the most imminent questions of what's going on here once you have the diagnosis then you can move to Define what Mr
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Robot calls The Guiding policy accounting policy is something that everybody in organization should know should be aware of and should use as a tool to make decisions more easily and faster a guiding policy is something like we
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value experience over performance or we value weight over cost I mean there's a very nice story about building a Boeing plane where they um with where they ask all the teams to
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trade kilograms for money so that they control the weight of the overall plane so this is a guiding policy it helps decentralization and decision making at scale and then the last piece is a set of
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coherent or cohesive actions so it's what we actually do to get there and Mr Rommel says that very few companies in the world have actually all three components in their strategies
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and I I trust Mr Rommel because in my experience with canberise we talked to many Executives and I I could only rarely see so much well thought of strategies people usually say something
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aspirational as we want to be the best manufacturer of whatever or we want to get to a market share of why or we want to be the best employer for that country blah blah blah but these are just aspirational goals this is not a
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strategy because it has no guiding policy it has no attached actions to it to actually make it work I'm lucky because in my experience so far I've been acquainted with multiple Frameworks methods
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um tactical strategies and things like that that I could employ and create my own tool set to make stuff work and experimenting with kanban for obvious reasons well I have a company that works on a kanban tool and
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experimenting with okrs the okr framework helped me realize that these three ideas these three concepts complement each other so well that they probably should be taught in
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school so how do we Implement a good strategy once we have identified our good strategy following the strategy kernel thinking how do we make it work and I think I have the answer or at
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least that's my answer to it you employ okrs the okr framework for the diagnosis thinking and for the bigger pieces of The Guiding policy thinking and then you employ kanban for some of
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the guiding policies thinking and for virtually all the activities or the actions that have to be executed in order to make our strategy work as you can see there's an overlap between kanban and okrs around the guiding policies thing and that's
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because both methods I would say um have very wide capabilities if they are not focused just on actions or just on diagnosis they can be used across this whole spectrum of thinkings but my
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personal experience or is reflected on this line so the majority of actions this kanban the majority of diagnosis okrs and somewhere in the middle we can use either of these two if that sounds a bit weird or a bit abstract give me a few more minutes it
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will start making more sense I promise so what is kanban I I think I need to go through these two concepts kanban and alkeras for the benefit of everyone who is on the audience that might have not had any tangible experience with those it will be quick don't worry about it I
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want to point out that I'm talking about kanban written with a capital capital K and not about kanban that is written with a lowercase k so that um the lowercase kanban is manufacturing common this is what Toyota invented in
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in the 20th century this is the visual scheduling of materials and replenishment materials and parts this is not what I'm talking about I'm talking about the kanban method so the common method was invented around 2010
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uh by a person called David J Anderson who wrote a blue book that's how it's it's well known the blue book that and that blue book talks about taking those ideas from the manufacturing kanban and applying them to knowledge work so
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everything I'm talking about here is knowledge work it's not manufacturing slash software work it's knowledge work office workers design workers managers everybody who works with their heads primarily and not so much with their
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hands so what is kanban I'm showing you here a screenshot of our product canonized and my goal is to visualize what I'm talking about not so much to sell the product and what we see here are a few things I'll start with the bullet list on the
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right so these are the six common practices for the kanban method you have to do those six things if you are to say that you're doing kanban with a capital K so the first thing is that you visualize your work well these things
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here these cards here that you see they are actually work items or tasks or project deliverables whatever you want to call them visualized on a digital kanban board these here
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are what we call workflows all right so we have a workflow for objectives and we have a workflow for actions these cards represent actions this thing which we call initiatives
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represent an objective all these flow from left to right from requested to done that's a very simple idea the second thing is we have to be limiting work in progress we know this very well
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from the manufacturing world that's the small batch sizes always bring us better lead times so in in the digital common world we allow people to limit the working progress using those small numbers here that say
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you gotta have less than x number of cards in that stage we manage flow managing flow is a complex topic so I won't go too deep into it but the idea is that you move the cards from left to right as quickly as possible and if
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there are impediments along the way you resolve them through system thinking or other approaches that you may employ making posts explicit is the fourth practice in kanban which means whoever looks at this board has to know what to
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do with it we tackle this in the digital space with a specific section but if you're using a physical board you're obviously free to design your own workflows and policies feedback loops in kanban is something that we have regular meetings for we
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have daily meeting weekly meeting monthly reading quarter meeting and this is used to make sure information flows from Team to other teams and from the teams to the management and the sixth practice sorry uh sorry about that the sixth practice
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is to improve and evolve experimentally which talks about more like The Lean Startup thinking where you run small experiments you take the result and then you either pivot or you persist so this
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is kanban in a very few words it's a huge body of knowledge so there's a thing called the kanban majority model again this is for knowledge work if you are interested to learn more Google kanban maturity model and you will have
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plenty of information to learn from all right so what about the okr framework so far I was talking about the kanban method it's a method because you can apply it to any process it's not a process on its own and the okr framework
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is more like a process on its own so we call it a framework all right so the okr framework it stands for objectives and key results okay r and the occur framework is a collaborative goal setting system that helps companies to
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achieve more and to align better towards their strategic goals you can use okrs on a team level you can use lkrs on a department level you can use okrs on holistic company strategic level
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we recommend having at least two levels one strategic and one team we don't necessarily recommend having lkrs on a personal level on an individual level we think this is counterproductive some people do it we
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think it's counterproductive because we need to see collaboration it's a collaborative goal setting system right and if every person has their own objectives and Care results then collaboration is Hinder so what should the okrs be what should
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the objectives be the objectives are the what this is what we want to achieve and they have to be those four things aspirational action oriented concise and meaningful please note that we are not saying
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measurable why because the key results have to be measurable the key results are the how they have to be concrete measurable they have to be time boxed and aggressive but still realistic what's the thinking here the thinking is
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that these two force you to clear your thoughts before you actually identify the diagnosis and The Guiding policies which we talked about this is a quick example we could have an objective that says we
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want to significantly improve the success rate of our major projects this is aspirational it's short it's concise it's meaningful this is something we really want to do it's action oriented but see it's not measurable to to make
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it measurable to make it something real to make it objective whether it's achieved or not we add a few key results to each objective in this case we have three key results it's usually a good idea to have at least a few so two three
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is a good number maybe five but not more than five so the key result would be we want to reduce the number of customer escalations by 25 percent we want to improve the quality of the product by 14 percent and we want to realize project Savings
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of two percent or more so now ladies and gentlemen this is how you have a very good diagnosis and a very good guiding policy these are the things we want to achieve these are the things we care about now the problem is how we make it work
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right this is where kanban comes into play because it helps you manage the work in a very lean and efficient manner if you want to learn more about okrs I recommend this book it's by John doer John Dorr was taught this by Andy Grove
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who was the CEO of Intel and actually on the Grove from intel was the person who conceptualized this whole thing so you can you can almost consider this book to be straight from the horse's mouth so how do okrs and kanban work together
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to help us deliver the strategy that we had identified it gets very interesting for me here because our product as a company revolves around this idea the idea of
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okra okrs plus kanban equals okra where a is the actions or the activities right that's this is the inner title of the presentation I want to show you how kanban and okrs work together you're seeing again a
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screen from our product companies it's zoomed in a little at the top you see a workflow that's called objectives and you can see here a workflow that's called actions this thing here is what we call an
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initiative and in this case the initiative represents objectives the objective we have is we want to design a new training platform this is our aspirational goal we need a
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new training platform these two that you see here are the actual key results we call them outcomes but it's basically a key result that are attached to this objective so we have
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the diagnosis and The Guiding policies encoded in this initiative here and then this initiative is broken down into multiple child cards there these rectangles here are these
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cards below it actually so that when you work on those cards as a team you finish the work that's supposed to be done for the team to achieve those goals so we have the diagnosis The Guiding
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policies and then I keep doing that sorry uh and then we have also the coherent actions down below at one screen you can see it all and again I'm not trying to
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advertise my own product although of course I would appreciate your interest the the important here is how we manage those two together if you open one of those initiatives you can see more detail about the same thing so you can see uh the detailed
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description of the objective you can see the detailed description of the outcomes and why we need them as well as the work that attached to the subjective and specifically in canberise and maybe in other tools I'm not sure about that you
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can see uh a hierarchy of objectives 1 2 3 10 levels of objectives from the CEO through the Strategic portfolio through the operational portfolio to the team level you can see
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um goals and objectives cascaded so that everybody knows what they're supposed to do and how how they can contribute to the bigger picture what you see here parent level -12 these are all um pointers to the hierarchy up above so
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that everybody is aligned alignment is a huge advantage of the ocare framework especially paired with kanban and capable tooling now the last thing almost the last thing I want to show you is what you can get when you have a system like that in
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place so this is um the the tracking of one outcome or one key result no matter what what I want to call it this is a timeline the white line here represents the actual value so
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we want to increase the people trained from zero percent to a hundred percent and it's currently 10 that definition of the key result right it's measurable and because we are building a training platform we want to train people up to
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100 so as we again gain progress more and more we reflect that into the key result and we see this chart being drawn for us automatically based on our historical data we can get we can get you a projection
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showing you how you're going over time and where you are likely to land at the end of the key result if you recall the key result was supposed to be time boxed so we have a time box and then this
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projection shows us what value we are going to get at the end of the time box the Baseline is this blue line and it's quite obvious that at the end of our period we are not going to be meeting our Baseline so if we're below
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this Baseline because we're trying to increase value if we are below the Baseline well it means that we failed that's why the status is red right it's quite quite natural that if you're so far off your status will be read
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I want to mention one important thing about the LKR is that because they are or they're supposed to be aspirational by default if you hit 70 percent from your target or more that's considered success so if you're
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always striving for a hundred percent completion or more then probably your goals were not that aspirational in the first place so in the okr world they really encourage people to set very aggressive
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high goals and then work towards 70 or more and by the way our software is codified to to follow that rule so if you're 70 or more you'll be greenish in status
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and uh I want to summarize very very quickly for you why I think okrs and kanban fits so well together I I sometimes joke that okr should be objectives kanban and results as you can
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see in the title but that's just a joke so how these two concepts complement each other for real the first thing is that kanban makes it much more likely to actually get to your goals because it
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makes the execution of the work super efficient and by the way Andy Grove himself the person who invented lkrs and told them to John door said John doerr that it almost didn't matter what people
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knew because it was all about execution I find that a little bit strange because andygrove said that and then he invented the okrs with no actions um but you know I think it's because
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back in the 80s I think on 90s when this happened there was only one way to execute work it was the the waterfall process back then and everybody was taking it for table sticks things have
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evolved with agile since then and that's why I think the ocare framework should be extended to encompass real guidance how you make the work done how do you get it done the second thing is that okrs provide a
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very nice lightweight goal setting approach on top of kanban and that helps the organization to steer everything towards outcomes and not so much about output and I've fallen in this trap
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myself in the very beginning of combinized we were obsessed with delivering more we just wanted to see more throughput right we almost didn't care what we were doing as long as the throughput was increasing and that's a terrible mistake you have to know what
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the diagnosis is or what the objective is only then throughput matters and all KRS really deliver on that at least for us the third thing that I find pretty interesting and important is that because of the built-in cadences in
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common those were the meanings I talked about these meanings very nicely match the the goal setting cadences in the OCR space and they give us an opportunity to actually reflect on what the current key
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results are showing many organizations I've heard about said the okrs once a quarter and then they forget about that until the next quarter comes so they only reflect on what has been identified as important four times
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a year and the fourth time is by the way Christmas so nobody cares about so it's actually three times a year and you only have three times a year the opportunity to learn the chance to learn and that's that's not enough friends this is just
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not enough so with common attached to the okr framework you have at least um at least a weekly opportunity to to reflect on what's going on if not daily we have the daily meeting in kanban as
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well but weekly is a must-have and and monthly is is even more important so kanban adds this to the okr framework and and the fourth thing um is that kanban is a lot about metrics
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kanban makes your workflows predictable and when they are predictable you can use those metrics to base your assumptions for the future on what has been happening in the past
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we are very famous in the kanban space for relying on Monte Carlo simulations to forecast how much work we can deliver in the next few months over the next few quarters and now think about that you have the data in kanban you have the the
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lightweight objectives and key results in the your care framework connected what's more logical than using the kanban metrics and forecasting capabilities to actually inform the objectives and key results on the
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likelihood of the work being done by a certain date well that's what we do utilizing these Monte Carlo stimulations you can say all right you've planned that amount of work for this initiative you have planned a deadline
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two months in the future there's 85 percent probability that you will complete this work on time that's good but if there's only 15 capable probability then you have to revise your objectives you have to revise your plans there's always a
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chance that you deliver 100 of the outcomes with 10 of the work but that's not what happens in reality usually the other way around you do all the work and then you can only get to 20 30 percent it's just reality
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and with that friends I'd like to close my presentation you can find me on LinkedIn if you want to know more about kanban and okrs and how these two work together I'm happy to answer any questions and have any conversation thank you so much thank you very much mitka for this uh
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really insightful presentation and a good overview of kanban all KRS and strategy in general uh we need to be respectful of time uh but I I do appreciate the questions that were asked I'll just highlight two of them maybe you can take the time to
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answer them in the chat or people can connect to you uh separately they have your coordinate I will answer in the chat and they can connect me on LinkedIn as well that would be great because I do believe that in the space of strategy we talk about Russian country and everybody's wondering how this relates to to the X Matrix and and and also like
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the timing conjunctions there was a good question there as well so we can we can take this uh afterwards thank you very much once again I hope everybody appreciated the session as much as I did and uh enjoy the rest of the conference thank you
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thank you