We study quantum Otto thermal machines with a two-spin working system coupled by anisotropic interaction. Depending on the choice of different parameters, the quantum Otto cycle can function as different thermal machines, including a heat engine, refrigerator, accelerator, and heater. We aim to investigate how the anisotropy plays a fundamental role in the performance of the quantum Otto engine (QOE) operating in different timescales. We find that while the engine's efficiency increases with the increase in anisotropy for the quasistatic operation, quantum internal friction and incomplete thermalization degrade the performance in a finite-time cycle. Further, we study the quantum heat engine (QHE) with one of the spins (local spin) as the working system. We show that the efficiency of such an engine can surpass the standard quantum Otto limit, along with maximum power, thanks to the anisotropy. This can be attributed to quantum interference effects. We demonstrate that the enhanced performance of a local-spin QHE originates from the same interference effects, as in a measurement-based QOE for their finite-time operation.