2. 2
Whoweare
• 17 years of experience in Software Development
• Proven track record in delivering various offshore
application development engagements and recently
lead Digital Transformation Center
• Technologies in Scope: Cloud Native Applications,
Chatbot/AI, Robotics Process Automation, Mobile
Apps, DevOps, ServiceNow
• Scaled Agile, PMP, Mini MBA, eCornell's Executive
Leadership and Certified Microsoft Professional
• ITLC Founder
• AI Product Lead at Sendo
• 22 years experience in IT, in which he spent 10+
years on Technical Management and Product
Development at technology-based organizations
and technology startups
3. Sep - 2019 3
OBJECTIVES
• Understands Management by Objectives
and Balanced Scorecard
• Implements Objectives and Key Results
in your Digital Transformation Journey
4. 4
History
1954– Peter Drucker invented
Management by Objectives or MBO
1970s – Andy Grove popularize the use of Objectives in Intel
1980s – Balanced Scorecard
by Dr Kaplan and Dr Norton
2014+– OKR is popularized by John Doer to his portfolio
companies. Was introduced to Google, then adopted by
hundreds of companies such as Zynga, Sears, Twitter,
Oracle, and so much more.
5. 5
ManagementbyObjectives
A management model that aims to improve performance of an organization by clearly defining objectives
that are agreed to by both management and employees
Peter Drucker – 1954
Step 1 - Set Organizational Objectives
Step 2 - Cascade Objectives to Employees
Step 3 - Monitor
Step 4 - Evaluate Performance
Step 5 - Reward Performance
Specific
Measurable
Achievable
Realistic
Time-bound
6. Nike: Bring inspiration and innovation to every athlete* in the
world. *If you have a body, you are an athlete
Shopify: Make commerce better for everyone, so businesses can
focus on what they do best: building and selling their products
TED: Spread ideas
Amazon: To be Earth’s most customer-centric company, where
customers can find and discover anything they might want to buy
online
Southwest Airlines: To become the world’s most loved, most
flown, and most profitable airline
Google: To organize the world’s information and make it
universally accessible and useful
Loreal: To provide the best in cosmetics innovation to women and
men around the world with respect for their diversity
Tesla: To accelerate the world’s transition to sustainable energy
6
Examplesfromhighlysuccessfulbusinesses
Vision
7. ManagementbyObjectives
7
Advantages Disadvantages
• Costly & time consuming process
• Difficult to define Goals
• Increased paper-work
• Reward-punishment approach
• “Managers should avoid activity trap”, getting so
involved in their day to day activities that they
forget their main purpose or objective
• Improved Performance, result-oriented process
• Employee’s input in Goal setting and action
plans encourages participation and
commitment among employees, as well as
aligning objectives across the organization
• Improved Communications
• Career Development for employees
• “No operating policy has contributed more to
HP’s success … MBO” – Bill Packard, HP’s
founder
“It’s just another tool. It’s not the great cure for management inefficiency…
Management by Objectives works if you know the objectives. 90% of the time you don’t” – Peter Drucker
8. 8
KeyPerformanceIndicators
A key performance indicator (KPI) is a value
used to monitor and measure effectiveness
“If everything is a priority, nothing is.”
• Employee turnover
• Sales forecasts
• Earned value
• Cost variance
• Schedule variance
• Estimate to complete
• Utilization rate
• Percentage of overdue invoices
Leading indicators contain
guidance about future
results
Calories per day
# Products added to portfolio
# Articles Submitted
% Test Coverage
Lagging indicators measure
performance in a period
that is past
Weight
Customer Experience Score
Revenue Growth
# Defects leaked
9. TheBalancedScorecard-MeasuresthatDrivePerformance
9
by Robert S. Kaplan and David P. Norton
HBR - JANUARY–FEBRUARY 1992 ISSUE
https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2
Financial
Perspective
Goals Measures
Internal Business
Perspective
Goals Measures
Innovation and Learning
Perspective
Goals Measures
Customer Perspective
Goals Measures
What must we
Excel at?
How do we look to
Shareholders?
Can we continue to improve
and create value?
How do
Customers see us?
11. BalancedScorecard
11
Advantages Disadvantages
• Expensive and Time Consuming
• Attention to Measurement
• Poor Support from Employees
• It can’t be copied precisely from examples
• Provides a Clear Picture
• Indicates Company Performance
• Makes Goals Achievable
• It helps your employees see how their individual
goals link to the organizational strategy
15. OKR-Top4PremierLeague
15
• Buying 2-3 good record players
• Developing 2-3 new tactics
• New healthy receipts for player performance
improvement
• Max point >>> Win >>> Draw >> Loss
• Score/Sub score
• Performance/Healthy
16. OKR-Components
16
Mission & Vision
Annual
Strategic Goal 1
Annual
Strategic Goal 2
Quarterly
Objective 1
Quarterly
Objective 2
Quarterly
Objective 3
Key Result 1 Key Result 2
Mission
& Vision
Strategic
Goals
Objectives
Tactics & Tasks
Activity 2Activity 1
Long Term
This Year
(& 5 years)
This Quarter
Today
18. BestPractice
18
UsefultipsforcreatingObjectivesandKeyResults
• Each team, department or
individual should have 3-5
objectives
• Objectives should be achieved in a
certain timeframe (e.g. one
quarter).
It is not an ongoing task
• Objectives must be ambitious.
• There are 1-3 key results per objective
• Key results are measurable
• They are the steps needed to achieve an
objective
• They describe outcomes rather than
activities
• It keeps your company aligned
• It helps you focus on what’s
really important
• It drives transparency
• It measures progress
20. Exercise:OKRLaunchMVPin3months
20
• KR1# - Write scope of MPV – Month 1
Talk with 5 potential customers, ask for their pain points
Draw mock-up, organize talk to validate solution with 5 potential customers
• KR2# - Implement and deploy 3 key features – Month 2
2-week sprints
• KR3# - Test & Fix bugs – Month 3
Test with 5 persons, face-2-face
Final sprint for release – week 4
5 minutes
21. Objective:Makeourcompanyfamousonline
Good vs Bad Key Results
• KR#1 : Generate 100,000 views on
Youtube channel
• KR#2: Get 10,000 additional
Instagram followers
• KR#3: Increase organic search traffic
to our website by 10%
• Make videos for Youtube
• Get more Instagram followers
• Improve SEO
21
24. OKRExamples
• Training/Education
• Objective: Design and launch internal Employee Academy
• KR1: Survey 15 team leaders on our education needs and gaps
• KR2: Talk to 3 other companies HR Directors on how they do internal
education
• KR3: Define 10 training modules and design content for each
• KR4: Conduct first 3-day team offsite to test out the Academy
curriculum
• Product Management
• Objective: Successfully launch version 3 of our main product
• KR1: Get over 10000 new signups
• KR2: Get published product reviews in over 15 publications
• KR3: Achieve sign-up to trial ratio of over 25%
• KR4: Achieve trial to paid ratio of over 50%
24
https://okrexamples.co/
• Content Marketer
• Objective: Content Marketer OKR Examples
• Successfully implement the weekly newsletter
• Finalize the content strategy, key messages, and topic
structure for the next 6 months
• Grow subscriber base at least 5% per week, getting to
50,000 readers
• Increase the CTR% to above industry average 3.5%
• Account Manager
• Objective: Research and improve customer satisfaction
• Exceed Net Promoter Score (NPS) of over 8.0
• Get 1000 survey responses to annual satisfaction survey
• Conduct 50 phone interviews with top customers
• Conduct 15 phone interviews with recently churned customers
• Present an action plan of 10 improvements for next quarter
26. DigitalTransformation
Key building blocks 26
Digital Customer
Interactions from 25% to 50%
%Customers use Auto-
Check-in/out: from 0% to 15%
Increase Sales revenue
through digital channels
from 0% to 10%
Digital workforce:
% BOTs from 10% to 50%
Worker Enablement:
% department uses new
communication platform
from 0% to 50%
Samples Goals/KPIs