Software engineering is about performance, about accomplishing something meaningful not just to end-users, but your engineers, your department, your organization. It’s something we’re very passionate about here, at Waydev, and we went into greater detail about this in our Developer Productivity article.
Today, we’ll share how you can ensure organizational success, developer performance and team engagement by setting clear goals with measurable results. All, with the help of the Objectives and Key Results (OKR) methodology.
OKRs help you track progress, drive team engagement, create a strong alignment with the company goals and ensure a place where engineers work with purpose. That’s what drives developer performance the most.
The OKR system was born in the ‘70s at Intel, an engineering-led company, by Andy Grove. A simple, but exceptional idea that was adopted and refined by Google in the late ‘90s. Since then, a growing number of leading companies followed – Netflix, Intuit, GitLab, to name a few.
If you’re looking for inspiration into how to set goals and OKRs for engineers, we’re here to get you started and share with you plenty of engineering OKR examples.
There are so many types: organizational goals, career goals, personal development goals.
But when we put them into the context of setting goals and OKRs for engineering teams, it’s usually about the following:
What is an engineering goal, exactly? It depends on the methodology you’re using within your team. It can be a team-level or engineer-level objective. Either way, it’s about the progress and creativity put into achieving a goal, rather than attaining it by all means.
And, since engineers are people who feel the best when they work with hard data and concrete targets, engineering goals always have to be specific, clear, transparent and ambitious.
Now, it may seem counterintuitive to set extremely ambitious objectives. Wouldn’t people get frustrated? But the thing is, ambitious goals are key to performance and professional development. As Google explains, great leaders aim for success with “moonshots”, not “roofshots”:
“Such goals tend to attract the best people and create the most exciting environments; even failed goals tend to result in substantial achievements”.
Luckily, you have technology on your side, like Waydev, to move to a data-driven measurement of your alignment with business goals. Our Git Analytics platform gives you the right set of metrics and tools to automatically track, measure and optimize engineering performance.
Some might say there are some slight differences. Goals are usually considered larger, more general and long-term (a few years). They usually derive from the mission of the company. An OKR is still a goal, but one that’s usually set quarterly at individual and team-level.
An OKR is a short, concrete description of what one wants to achieve and how to do that. It has:
What OKRs are NOT:
Another grey area is objectives and key results vs. key performance indicators: OKRs vs. KPIs.
OKRs are about strategic frameworks useful in a larger context. They set ambitious objectives and a specific direction for teams and engineers, to be able to reach and measure accomplishments.
KPIs are about setting attainable goals and productivity metrics as the output of a process. They are based on each engineer’s job responsibilities. Unlike OKRs, they are used in performance evaluations and promotions.
KRs are often seen as engineering KPIs. To put it in other words, OKRs are the initiatives your team will focus on in a given time, while KPIs measure the important things that happen during that time.
Many engineering managers know the classic approach of SMART goals: specific, measurable, achievable, realistic, timely. Often, that means discussing goals in 1-on-1s, reviewing individual performance at the end of the year, and deciding on appraisal for certain incentives.
It’s such a deep part of the general management practice, no wonder it’s hard to stop and ask: does this really work the best way?
If there’s a reward for meeting 100% of their targets, employees can lose motivation and look for easy ways to do that; if goals are private, they cannot align to other big objectives, nor collaborate and drive a sense of accomplishment.
But engineering goals can lead to success only when they align with the strategic ones, account for interdependencies across departments, and allow necessary corrections along the way.
That’s how a new approach emerged, as the MIT Sloan School of Management’s Donald Sull and his team analyzed in their research: the FAST approach, applied through OKRs.
According to Sull’s research, leaders must set ambitious goals, translate them into specific metrics and milestones, keep them transparent, and frequently discuss progress.
This new approach to goal-setting helps organizations improve across multiple levels at the same time. What’s more, FAST goals are ideal for tech companies, which is why Google, Intuit, Netflix, Twitter, or Deloitte are already using it.
It started with the ground-breaking Management by Objectives strategy (MBO), introduced by Peter Drucker, “the father of modern management”. This inspired Andy Grove to use the same concept and introduce the OKRs: people do their best when they focus on results and are valued by accomplishments, not hierarchy.
Today, it’s John Doerr who took over the mission of refining this methodology. His book, Measure What Matters, inspired leaders and organizations around the world to achieve their most ambitious goals through OKRs and a FAST mindset.
According to Doerr, there are 5 key benefits to using them: focus, alignment, commitment, tracking, stretching.
Also employees find OKRs meaningful because they ensure:
OKRs can be specific to a team, but they can also be shared between departments working towards the same goal. No matter the case, collaboration and transparency are key.
Picking the right OKRs asks for prioritizing ideas and assigning metrics to completion. This means software engineers should use their time in a measurable, time-bound way. Waydev is helpful here, as a complete development analytics tool used by 1000+ engineering managers.
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First, it’s essential to understand that objectives and key results do not replace any job responsibility or KPIs. OKRs are an effective framework to prioritize work and enjoy a sense of accomplishment, while everyone moves in the same direction.
Let’s see how you can set goals and OKRs for your engineers, by using the FAST principles: frequent discussions, ambitious in scope, specific metrics, transparent to everyone – in the right order.
Objectives should be almost impossible. They should be difficult, but achievable.
Although the idea of setting almost impossible goals is scary, people who pursue them significantly outperform peers with less challenging OKRs.
Also, setting ambitious goals lowers the risk of sandbagging. When incentives are offered for meeting targets, individuals may prefer initiatives that are under their control, instead of taking creative risks.
At the same time, having to achieve 100% of each target can discourage them from the trial-and-error experimentation needed in this sector.
Of course, more ambition is not always better, and it’s difficult to measure. So it’s important to balance it with achievability, as Google and GitLab do. They encourage employees to think big and set goals unlikely to be met 100%. They keep a threshold for success of 60-70%.
Another recommendation is to separate goal attainment from financial incentives; setting ambitious goals can boost performance on their own. A 40-year research found that intrinsic motivation was 6x more effective than financial rewards, for employees completing complex tasks that involved creativity.
Goals should be an essential part of ongoing talks about progress, resource allocation, prioritization of initiatives, and feedback sharing.
Far too often, there’s two annual meetings: one to set goals, one to analyze goals. This can drastically influence employees to work on meeting theirs too close to performance reviews.
That’s not helpful. To drive strategy execution and allow engineers to enjoy work and sense their progress, goals should serve as a guide to key decisions and activities for the entire year.
Having quarterly OKRs is typical of dynamic sectors (media, tech). This ensures more frequent discussions on progress, improvements and challenges along the way, that can be more easily solved.
A Gallup research on engineering performance showed that productivity increases by 56% when managers are actively helping engineers align goals with organizational needs.
That’s solid proof that the manager’s role has the most influence on team engagement and productivity. Use feedback and coaching sessions as opportunities, too, to discuss engineers’ goals and progress. This keeps OKRs top of their mind throughout the year.
Goals should be transformed into metrics and milestones that measure progress and show clarity in how to achieve them.
Since the beginning of the OKRs implementation in the ‘70s, it was about helping people translate their goals into concrete actions and metrics. The goal? Full clarity on how to achieve goals, measure progress, and feel the success.
When it comes to engineering teams, well, some insist that every key result should be quantifiable. After all, they’re more inclined to measure numbers, right?
But that’s neither necessary nor optimal. Any performing organization explores quantitative AND qualitative metrics to drive alignment and productivity. A start-up, for example, can see hiring a new CTO as essential as any KPI.
Big thinkers, for example, can better see the details and how to attain goals. More tactical people can finally see the connection between their activities and the outcomes that matter to their team and organization. Everyone knows exactly what is expected from them.
You can make use of the Waydev’s Targets feature to set milestones for your engineers. You can configure targets, assignments, and even alerts tailored to your specific work and needs. This helps you translate uncovered opportunities to action by setting measurable targets within the app and tracking progress.
Goals and current performance should be made public for all employees to see.
What would happen if you all shared everyone’s goals and key results (internally, of course)? It’s a bit of a scary idea to many leaders and managers.
The thing is, though, people do prefer transparent goals across the company, no matter the type of their organization (except for sensitive matters) They save time, too; instead of going back and forth to see if you’re on the right track, everything is available to everyone.
With Waydev, you save up to one day every week. Learn how our Dev Analytics tool helps over 1,000 engineering leaders deliver better software and products faster and drive performance.
Having public OKRs for all employees can actually enhance performance for individuals, teams and departments. They introduce good peer pressure, encourage reaching others for advice on how to become better, and ensure alignment across all levels.
Clarity on how each of employees’ work supports business strategy and growth is the second most important driver of engagement, according to an extensive HBR report.
Transparency doesn’t guarantee success. But it does help people to check alignment with organizational goals. This eliminates the risk of feeling excluded or working on things that are either unnecessary nor helpful to anyone.
Here are a few questions that you should answer before setting goals:
Involving each one in goal-setting allows them to express themselves. They can share how they want to work and spend their time at work. This can make them feel more involved, part of something big and meaningful, and also more willing to take ownership.
So it’s good advice to ensure this process is as collaborative as possible. You can also analyze if team-level OKRs are a better strategy for you than individual ones.
If you need help with brainstorming, especially if it’s something you’re just starting, use the company objectives as inspiration. It allows you and your engineers to more easily decide on relevant OKRs that support the larger goals of the organization.
Of course, not every one of your OKRs has to reflect those goals. There should be a clear connection, though, with at least one of them.
You know the Why’s and What’s, but now it’s time to actually write them down. To smooth the process, think of describing OKRs this way: “We will (Objective) as measured by (Key Results).”
This can be done together, especially when it comes to team OKRs. But you can also let them draft their own and just coach them if they need you to.
How to set Objectives:
How to set Key Results:
Now it’s time for your team to decide on the OKRs grading and frequency. For the first part, you can decide on using percentages or a scale, anything you think it’s working better.
The best frequency for tech teams is setting OKRs on a quarterly basis. It’s easier to follow, measure results and correct the direction if circumstances changed.
Fully explore the chance to discuss and update OKRs during meetings and 1-on-1s. For instance, with Waydev, you gain a better understanding of what’s going on before having a one-on-one. Also, you can see how your engineers performed sprint over sprint to identify new coaching opportunities.
If there are more departments working towards the same goals in a company, including yours, it’s a best practice to collaborate with other managers and leaders. For example, you can draft the first OKR sets together, by having an annual plan in mind, and then make the final ones transparent across the entire organization.
Below, you will find a few OKR examples for software engineers that may help you draw out your own goals and key results, which align to your organizational purpose.
What are some good performance goals for a software engineer? How about a few engineering team-level OKRs examples? Here’s a list of relevant examples of engineering OKRs and goals for today’s teams, which software engineering managers could find inspiring.
Being a great engineering manager that meets the needs of their leadership, their team and their customers isn’t an easy task.
However, with the right mindset (hopefully, a FAST one!), a drive to support people, and the best dev analytics tool at hand (hopefully, Waydev) setting effective goals and meaningful OKRs becomes easier than ever.
As a result, when you’re starting this process, just remember to:
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