Peter Lear

Hi, everybody. I'm Peter Lear, Chief Product Owner for Ways of Working at Nationwide Building Society.

Kimberley Wilson

And I'm Kimberley Wilson, a Value Realisation Partner at Nationwide Building Society, too.

Peter Lear

Today, we would like to share with you some of our insights into introducing OKRs into Nationwide. It's meant that we've bumped up against some interesting issues which relate to people's cultural norms, old ways of working. But we want to share with you what we've learnt on the journey to try and help you to accelerate OKR delivery and value management in your organization.

Kimberley Wilson

So we are from Nationwide Building Society. It's the world's largest building society, though we're not actually a bank. We're a mutual organization, which means instead of being owned by our shareholders, we're owned by our members. So whatever profits we make, we give back to our members. So we returned about three-quarters of a billion profit to our members last year, for example. And being such a member-focused organization means that we're number one for customer service in our peer group. We're the UK's most trusted financial brand, and hot off the press, we've just got Which? Best Banking Brand of the Year, which is quite ironic, seeing as we're a building society, but there we go.

And we pride ourselves over-- So we've got five cornerstones that we run our whole organization by, and even in the cornerstones that you can see in the middle, we put things like pride, which is putting members first, doing the right thing. So the members are really integral to how we run things.

Peter Lear

Thanks, Kim.

So as an organization, we'd like to believe that we've got great culture, and we've got a great set of values that we run our organization by, and we really do care for our members. But being over 100 years old, we've got lots of traditional behaviors. We've got lots of things around how we manage the organization, historically, through command-and-control style of behaviors. So moving to more agility, business agility, and agile ways of working has been quite an interesting journey that we started about three years ago.

At the moment, some of our average time to value takes us around two years when we're looking at change initiatives, and often we've been finding that our benefits expectation is misaligned with what really happens. So that creates an interesting tension when it comes to building trust around how we deliver change and how we get buy-in from stakeholders.

And one of the great things about the organization is that we do have a really strong set of mutual values. We really do take care of our members, and we really do take care of our colleagues. But sometimes that mutual mindset actually means that you're taking collegiate decisions all the time, and it can be really hard to drive change through the organization, because you're moving at the pace of every individual. You're not taking some strong decision-making. And that's been one of the barriers that we've encountered in the organization when it comes to trying to introduce a new way of working around using value and objectives and key results to drive outcomes.

So we start here with a quote from Elon Musk: "I take the position that I'm always in some degree wrong, and the aspiration is to be less wrong." It's a really great growth mindset, and it's one that we've been trying to encourage within the organization. Because we're typically risk-averse within the building society, it's hard to get people to feel comfortable with experimenting. But that's an approach that we've been using to actually drive this change around objectives, key results, and being really centered on value.

So the first thing that we've done is a bit of thinking. So about two years ago, based on advice from external organizations, we started to try and do Agile. And that was great for some of our early adopters, people who could see that this was a different way of working and were brave enough, courageous enough to try it. But those early adopters were in the minority, and actually, it proved really difficult to try and get the organization to move its mindset to all things Agile. It was a slow journey, and we've been on that journey now for a couple of years, and it wasn't until about a year ago when we had a new chief operating officer join that we started to see an acceleration in that mindset change.

And moving to what we like to think of as some 10X thinking around how we can drive change, and also spotting and helping to correct some faux agile behaviors that we've seen as well, where we've been labeling things as agile, but they're not really that. They're just waterfall, but with some different labels.

The opportunity to reflect and look at what we were doing meant that we went out and did a lot of research. We identified that you just can't apply a Google mindset to a building society that's been established for over a century within the UK. But what we did notice was that there was a groundswell of interest across the organization, particularly in middle management teams, and lower-level teams working with real impediments blocking their way to try and do something different.

So we started to scope a problem up and get feedback from across all of our teams, collect those impediments that they were facing into, and recognized that a lot of what was happening with our early implementation of OKRs was that we were just swapping one reporting system for another one, and that wasn't unlocking the true potential that you get from OKRs. So we had to go back to the start and think, what were we trying to achieve? And one of the things that we noticed was our understanding organizationally of what is value and how do you create good outcomes was lacking, and we had to go back and revisit that and come up with a better way.

So we started to do some experimenting. We rewrote some of our material around what we thought you were trying to achieve with objectives and key results. And also, we had a real in-depth think about what is value. How do you define value? And we came up with some key drivers around four things which are valuable to us as an organization. And then trying to make sure that whenever we write an outcome and then an objective and a key result, we tie it back into one of those four drivers of value.

We then took that material out into an audience across the organization and started to try and use it to understand whether this material made sense to them, whether they could get their heads around our definition of value, our definition of an outcome, and how to become good at authoring objectives and key results. And by using that, we've been able to keep spinning this wheel to improve and keep learning about what we could do better when it comes to OKRs.

Kimberley Wilson

So I'll just walk you through some of our journey of implementing OKRs and our experiences. And as we go, it'll be interesting to see in the chat if any of you have had the same experiences and the same challenges as us.

But certainly, when we started our journey about a year and a half ago, we really wanted to implement OKRs across the organization. We thought, "It can't be that hard. We'll just tell people to write down OKRs in their reporting." So on paper, you could see a really good, high-quality set of objectives and key results. But when you started to look deeper, actually, it was still just waterfall milestone reporting under the guise of an agile mindset at the top.

So it didn't quite work. People weren't quite bought into what objectives and key results really meant and the mindset change that you had to have. They were still focused on just delivering their project. They weren't worried about the value that they were going to create at the end. They were just doing it for reporting purposes.

So when we saw that wasn't quite working, we attempted to get top-down senior management support. Actually, we thought we had the right conditions, but old cultural habits in the senior management level are quite hard to shift, especially when we don't have much evidence of objectives and key results within our organization successfully changing things. We only had evidence of the reporting front happening.

So instead of the top-down approach, we started to just talk to people about what objectives and key results meant and about that shift to: it's not necessarily about what you're doing and what projects you're delivering. You need to think about the value you're realizing for the members at the same time and making sure you're maximizing that value.

And the more we started talking about it, and about the objectives and key results, we got genuine interest from middle management. So we started to, instead of trying to roll out OKRs across the whole organization, tailor our support to just a few teams who were interested and gave them really in-depth support. And that seemed to have a much better output than our original attempt.

So once we started working with teams, we tried to make them into true project-driven teams. We gave them coaching and support instead of just telling them how wrong their OKRs were, which made quite a difference. And we got some real early adopters and champions. And from that, we could show that if you adopt OKRs and you start to change the mindset and the behaviors, you do start to get success, and it starts to change the way people deliver projects, and it starts to deliver more value. And that news of success naturally filters up to senior management.

The other benefit we got from it was that the teams themselves highlighted the impediments, which was a much stronger message going up than us centrally highlighting the impediments, and it had more of an impact. Of course, the other benefit, by working with just one or two small teams first, is that you can learn from that, and you can gather feedback. So we were able to gather the information around what works for them, what doesn't work for them, and adapt it so that the next team we gave our support to had a much better experience, and we can get different learnings from it to just enable that continuous improvement cycle. Because we're working with such an ingrained culture shift and a mindset shift, actually, that continuous improvement cycle of just a step change of getting better and better was really important.

Peter Lear

So, let's share some of our top tips and also some of the challenges that we're still facing into.

So the first one is this: OKRs really do require a different set of accountabilities from people. We recognize it's a difficult transition from a waterfall project management approach to a product-driven incremental value model. And that's meant that actually, we realized that some of the way that the organization is structured was a fundamental blocker to how you can shift accountability to people who want to write really great outcomes, big, hairy, audacious goals, and then use OKRs to incrementally drive towards them.

So we're moving to a model where rather than having a whole series of different teams and squads, we'll have three missions which are focused on the needs of our members, and those three missions will focus on delivering value. We can then organize the people around the work and then use OKRs to understand how we're going to measure and drive towards those audacious goals.

A real change in focus, and we've touched on this a couple of times with our words, but let's pull this apart and explain it a bit more. In the organization, it's quite often the case that people were rewarded for finishing a project, for doing work. So the product that they delivered actually would be, "I finished my project."

Shifting that to value realization is quite an interesting journey. Some people get it straight away, and they really engage with the challenge of driving value. So whether that's increasing service to our members, whether it's reducing risk from a regulatory perspective, or if it's just trying to improve our cost base or grow our revenue base, some people really love that, and they really want to engage with it. But for some people, it's a really tough journey because they're so used to a system of working which is about: here's a task list, and if you get to the end of the task list within a given duration and for a set cost, you're successful. And actually saying, "We're not going to set a roadmap for you, but we are going to tell you where we want you to get to at the end in terms of a value measurement."

So we've been helping people with coaching and support, showing them a different way of working, and using some of the Agile principles of starting small whilst thinking big and trying to drive through those changes.

I think the other key thing that we found is because we're taking people through a journey, and it's a journey that requires support, you need to have psychological safety in place. Actually, having collaborative group discussion around setting outcomes and OKRs is really important. We're trying to move away from a model where leaders don't feel like they have to have gone off, perfected a set of instructions, and then delivered them to the team, but that leaders can take the role of supporting their teams, providing guidance and direction, being clear around what outcomes will be valuable to the organization, and how they'll measure success. But then working with the team and allowing the team to help define what those OKRs look like.

We found right now it probably takes us three or four attempts with a small team in a facilitated discussion to get to a good OKR. But they're much more fulfilling because everybody's had the opportunity to think about what they're trying to achieve, craft that OKR in collaboration, and the ownership then is much stronger as you move forward.

We now have, having done all of this work, often at grassroots level within the organization, created real interest further up within the organization. And that's meant that we're now in a position where we're starting to coach our senior leaders on how to write OKRs, because we haven't quite cracked having them across the organization and having them guiding us as our north stars. But we're starting to get that interest, that pull, based on the positive grassroots reaction across the organization.

Kimberley Wilson

And the example of the feedback that we've been getting is clear on-- So this feedback is from some of the training sessions that we've been holding with the teams themselves to train them and show them what do we mean by objectives and key results and try and help them write it, as Peter talked about. And you can see at the start, we ask them, "How do you feel at the moment when you set your objectives and your outcomes?" And this is just a sample of the results, but in general, most of them are negative. They feel not rewarded, not valued. It feels like they write their objectives and key results, and then they're forgotten. Tick-box exercise, it's not useful, and they don't really know why they're doing it, which shows you quite the benefit from it.

But the positive stance from it, when you ask them how they want to feel about objectives and key results, they get the vision. They want it to be inspiring. They want it to be measurable. They want it to be personal to them so that they can regularly check in with them. So they get the vision, and they're bought into the fact that change needs to happen, which is half the battle, I think, in our opinion.

Peter Lear

Yeah, absolutely.

So this is a journey that we recognize that we're only partway through. Two years ago, when we started to think about implementing OKRs, it felt like it was really straightforward. You just read the book, and then you did it. What we're finding, though, is as we engage with it as a topic and we start to really dedicate some time and some thinking to it, and one of the things that happened a year ago is we dedicated a team to thinking about how we do OKRs in a better way. You can really start to understand how far the journey can be and be much more humble about how much progress you've really made.

So the first one is around value measurement. We didn't have a definition of value, even though we were using the language of value. We spoke about needing to accelerate value, getting to value sooner, but we haven't actually defined what value is. So getting to a point earlier in this year where we really had nailed what we mean by value was really important. It'll be different for different organizations, but for us, it's got four measures. It's around the revenue that you generate in your organization. It's about how much it costs to run your organization. It's about delighting your members and having member satisfaction at the front, and it's about reducing risk. Those are our four key measures. And having those in place means that we can start to check that something genuinely is going to deliver value, and also be really clear around the progress that we're making against it.

Kimberley Wilson

And that progress point is one of the key things we want to work on next year. So I'm sure a lot of you are familiar with the benefits problem that we used to have about the benefits often aren't realized in waterfall projects for at least a year, two years, after the project has been delivered. So certainly within our organization, they started to feel less relevant because you can't change the project after it's been delivered unless you set up a new project to correct things. What we want to do in the value measurement space is introduce leading indicators and leading metrics so we can show both teams and senior management how to monitor those leading indicators and spot when there might be a risk to your end value, so that they can course-correct themselves.

Peter Lear

Yeah, absolutely, Kim. Really good point. And that movement from project- to product-based thinking is so important for the journey that we're going on, particularly in the environment that we're operating in right now with COVID-19 and in the UK, and across the globe. Interest rates are so low. As a financial services organization, it's really hard to make money. And we make money to give it back to our members, so it's really, really vital for us that we can be a successful organization because our members really matter to us.

Course correction is okay. So spoke earlier about the fact that we were an organization that doesn't like risk very much, and a feature of that tends to be that we weren't very comfortable with experimenting. So we tended to do lots of big upfront design before we deliver anything, and deliver long-lived projects and programs of work.

Actually going into incremental value and incremental delivery is a really good thing to do, but we found it's quite hard to get people to rethink how they deliver because they're so used to doing planning, which is of a waterfall nature. Actually saying, "Think about your delivery as a product, reshape it as a product, and then start to drive incremental value through incremental delivery" is quite hard. But we're starting to share examples of where that works, encouraging others by showing that it is possible and that you can get that done.

And of course, accepting good enough. Striving for perfection is a lifelong journey for all of us, which we'll never, ever achieve. You need to be able to go, "What's a good enough definition of done here?" Using value measurement is a really important component of that because you can make your decisions to either persevere or pivot on something based on your understanding of value. If you're not seeing the returns that you need, if you're not seeing the results that you need, you've got to take a good hard look at that and make a decision. Unfortunately, because we were used to running long-lived projects, we always kept getting to that stage of, well, we think we're 90% finished and we'll keep going on a two- or three-year piece of work. And often you're just deluding yourselves because the value's already escaped from the initiative, and you're better to pivot onto something new.

The other thing we've been trying to do to improve things is really tailor our support and coaching. One of the themes which we've talked about throughout the presentation so far. So we're trying to work with teams to understand what are their specific problems, and help them to highlight themselves their risks to value, so that we build the capabilities about checking for value within the teams themselves. We've tried before the approach of telling people where we think their risk to value are, but it doesn't quite have the same impact as walking teams through it, coaching them through it, and helping them to identify themselves where we think, and where they think themselves, they need to watch out for, and where the risk might be in the journey. And the idea is that if we help them spot those risks early on, they might be able to mitigate them and prevent them from happening or course correct. Really tailoring our coaching.

And also the approach around the learning that we've had is that we can't just leap to the end goal on this. It's behavior change, implementing OKRs. So it is difficult, and it requires adequate support along the way. So instead of jumping to the ultimate end goal of OKR achievement and the possible best practice, just aim for small improvements. And by the time you look back at the number of those small improvements, you would've made a huge leap anyway. But it's much easier on the organization by tackling small steps at a time.

And then finally, the other learning that we've had and the way we've changed our approach is realizing that objectives and key results aren't just for delivery teams. If they're going to work, they need to be integral to the whole business, and they need to be the language that you use to discuss change throughout the business. So it's been really important that both the delivery teams themselves, but also everyone up the chain right to the business area who are being benefited by the objective and key result, needs to buy into the objective and key result. And they need to understand what it means, and they need to have continuous dialogue about checking: is this objective actually going to deliver me the benefit that I'd expect by the end? And if not, then there needs to be a valid discussion about what we can do to course correct that. Having that continuous dialogue has been really important.

Yeah, absolutely. Getting that golden thread from our high-level strategy down to the work that's being done by teams on the ground. It should be simple, but actually messages get lost in translation and over time as you go through layers of the organization. And having visibility is really important.

So we'll just share with you very quickly, just canter through a couple of examples of where thinking's going next. Like I said, we're trying not to rest on our laurels here, but also we're recognizing that for some people, they're just at the start of this journey around getting their heads around how to set better outcomes, understanding value, and being able to author really good OKRs. But in terms of the material that we're moving through now, Kim, do you want to just share a few examples? We'll just very quickly go through them.

Kimberley Wilson

Yes. And we'd be interested as well if anyone on the chat has got any examples we can share. So the caveat with all of these examples: they're definitely not perfect. We know we've got to improve things, but we want to start a journey and put things out there, and then get the feedback and iterate.

So this was one of the examples of just mapping out the work that people are doing at the bottom of the chain, right the way up to the leading indicators that they're affecting, so that they can spot the quick changes and spot whether they need to course-correct, and whether they're likely to achieve value right up to their lagging metrics at the top, so they can check whether they actually have achieved value.

An important one we found is that we need to be checking whether there are any assumptions along the way. So often you're in a position where you can't check whether you're going to be achieving your lagging metrics very easily, but you certainly can check whether your assumptions are still valid or whether your value is based on untrue assumptions.

Peter Lear

Yeah.

Kimberley Wilson

So they've been really important. We've pulled out on the side here some examples of the things which usually catch teams out, so that they can try and apply them to themselves and try and say, "Have I got an exploitation problem? Is my business area truly pulling? Do they want the change that I'm delivering?" That type of thing.

Peter Lear

Yeah. And we've started to integrate this with some of the work that we've done around value stream mapping in the DevOps team. So we can integrate the two. It shouldn't be separate things. We should be able to say, "Here's our value stream, and here's how we're actually going to execute our drive for value."

Kimberley Wilson

This was just a quick example of, we tried to map out some examples of leading and lagging metrics. We didn't want to be too prescriptive with this, so they're examples rather than a framework necessarily. But showing some examples of how your leading metrics might map up to those four value drivers that we've got: the risk reduction, cost reduction, income, or member satisfaction.

Peter Lear

Yeah. And this is really important for us, for just trying to take that journey from, it's not about measuring whether you've knocked stuff off your Gantt chart or not, it's actually about, are you starting to understand whether you're going to realize that value or not? Again, a real significant mindset shift for people.

Kimberley Wilson

And then the following slides are some examples. We're really trying to turn the mindset away from measuring milestones continuously and moving it to measure milestones, but also measure what value you're getting, and showing people what leading indicators are, how it all fits with key results, and how you can really up the measurement and get learnings from the measurement.

So one of the things which we're trying to show people is that actually, these leading and lagging indicators, for example, aren't just for the benefit of reporting. They should be integral to the way your team works because if you spot them early enough, it gives you an early opportunity to change your decisions or course-correct or even stop the objective that you're doing if it's not going to realize value. And without those leading indicators to tell you whether you're on the right track, it's very difficult to course-correct. You end up in the waterfall problem of you've delivered the project, I'll wait for two years to find out whether I've got any benefits. So that's one of the things we want to do next.

Peter Lear

Yeah. Brilliant. So I hope you've enjoyed what Kim and I have been able to share with you. We've tried to be completely open and honest around our experience. I know a lot of the material that we've used, we've taken from elsewhere, but we've just provided you some practical examples of how it's been for us, and we would now love to answer any questions you've got or listen to your shared examples. Thank you very much.

Kimberley Wilson

Thank you very much.