Shifting from a focus on outputs to outcomes in a large bank department
Traditional portfolio management methods focussed on detailed business cases containing financial predictions. These typically showed the expected return on investment (ROI) over time. Organisations then found these benefits weren’t being achieved post-release. This was an expensive way to discover you were wrong. Some of these financial predictions were simply made up to justify someone’s favourite investment idea. Agile techniques replaced these and front-loaded testing to improve the likelihood of success. In many organisations, the understanding that outcomes weren’t so certain led to dropping business cases entirely. This sometimes went too far, with portfolio items becoming a list of work items with no measurements. In this very large bank department, there were the following problems:
The strategic intent of a portfolio work item could be unclear
A lack of current state metrics meaning it was not possible to measure improvement
A lack of expected results, meaning you could not determine what success looked like
Introducing Objectives and Key Results
I used Objectives and Key Results (OKRs) to transform the department to be more outcome-focused. OKRs are a simple but powerful technique for defining and measuring your strategy. They have two parts:
Objective - Provide a simple, concise description of the strategy
Key Results - Measure the current baseline and set a target to aim for by a certain point in time. You may or may not commit to achieving the target
OKRs use the following format:
Objective - A single sentence summarising the strategy
Key Result(s) - From [baseline metric] to [target metric] by [date] stretch / committed
The Key Results can be “stretch” or “committed”. You can commit to an outcome or stretch where it can’t be guaranteed.
Change Approach
The change was undertaken as follows
Creation of a one-day hands-on training course
All senior managers and team leaders trained up
Centralised storage area (using Confluence) created for storing and measuring results
Creation of OKRs for new and existing portfolio-level work items
Mentoring of each product manager to create good quality OKRs
New quarterly results review session with senior management and product leadership
The impact was significant and helped create a department that was more focused on results. The product owners began to put outcomes front and centre and became more focused on metrics. Reporting started to shift from delivery timescales to results. This gave the senior team invaluable feedback on their strategy, allowing them to pivot or stop where required. The difficulty in achieving this change in mindset and approach should not be underestimated. This type of change requires extensive support to succeed.
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