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How to make your product strategy goals tangible and measurable using OKRsHow to make your product strategy goals tangible and measurable using OKRsHow to make your product strategy goals tangible and measurable using OKRs

How to make your product strategy goals tangible and measurable using OKRs

Including goals in your product strategy is a great way to make it tangible and actionable, and will help define the items you include on your roadmap later. Your goals are measurable statements that explain what you want to achieve, within what time frame, and how you will know whether you are successful.

One of the most popular goal-setting frameworks for product managers is Objectives and Key Results (OKRs), and with good reason. Its focus on alignment and measurability means it helps product folks keep their teams on track while giving them enough autonomy to make the most of their unique skills and knowledge.

In this article, we’ll explore how to make OKRs a part of your product strategy and get using them with your teams. It’s possible to go into a lot of depth with OKRs, and there are many consultants and coaches who work full-time helping people put OKRs into action. With that in mind, this article focuses on the top-level need-to-know information and simple steps to help you get started rather than going into exhaustive detail on every element of OKRs.

As you’ll find out in this article OKRs are most powerful when everyone uses them. So this article assumes that you are in charge of product team or department, or in a position to influence those in charge.

What are Objectives and Key Results (OKRs)?

Let’s start with the obvious question: What are Objectives and Key results? The book “Objectives & Key Results” by Paul Niven and Ben Lamorte has a neat definition. It describes them as:

A critical thinking framework and ongoing discipline that seeks to ensure employees work together, focusing their efforts to make measurable contributions that drive the company forward.

In even simpler terms, though, you can think of OKRs as a system for setting measurable goals that are all aligned to what the company wants to achieve. Starting at the top of the organisation, people set out:

  • objectives (what they want to achieve) and,
  • key results (how they will know they have achieved their objective).

Based on these top-level OKRs, other departments and individuals set their own, creating a cascade of measurable goals all aligned to what the company wants to achieve.

Where did OKRs come from?

A to cut a very long story short, they started with Peter Drucker, who is considered the father of modern management practices. The idea was that companies were losing the ability to utilize all the knowledge that employees had to help drive the company to success because they were telling employees exactly what to do. By setting objectives and allowing employees to choose how they achieved them, Drucker believed it would make them more motivated and result in a better solution because it allowed them to use their own knowledge and skills, which were likely to be far deeper than that of their managers.

An (abridged) history of OKRs

Andy Grove, founder of Intel, started to use the idea of management by objectives at Intel to design the first version of OKRs. Then John Doerr, who worked for Andy Grove at Intel, saw the power of OKRs, and when he invested in Google, brought this concept to them.

Google adopted the concept of OKRs, which pushed them into broad view in the product community. Then people took the concept, formalised it, wrote about it, and made it part of the typical Product Management toolset.

Why do product organisations prefer OKRs?

Product organisations like OKRs because they solve three key problems:

  1. Alignment - any PM will tell you that this is always a challenge. Focusing on what adds most value to the customer and the business. Because of how OKRs cascade, they solve this challenge when done right
  2. Autonomy - because people set their own OKRs, the organization benefits from individual’s in-depth knowledge of their area of work. Plus they are more likely to stay motivated and work on things they feel matter to the organisation.
  3. Measurability - plenty of goal-setting systems are measurable but by splitting the objective and result, OKRs make it simple and help avoid the kind of unwieldy statements that SMART goals often become

What do good OKRs look like?

Effective OKRs have the following qualities:

Objective (What do we want to achieve?)

  • Qualitative
  • Inspirational
  • Attainable
  • Doable in a quarter
  • Controllable by the team
  • Provides business value

Key Results (How do we know we met our objective?)

  • Quantitative
  • Aspirational
  • Specific
  • Owned
  • Progress-based
  • Vertically and horizontally aligned

Let’s take a look at an example of a good OKR. Imagine that your companies goal for the year is to focus on increasing profit margin. Your team has been hearing from customer support that they can’t keep up with the level of phone calls they’re getting, and hiring is frozen until margins have increased.

An example of an OKR for your team might be as follows:

Company Goal: Increase profit margin

Team objective: Empower the customer service team to satisfactorily handle the increasing load of customer queries without increasing headcount

Key results:

  • Decrease the number of customer phone calls by 25%
  • Increase resolution satisfaction from 6.0 to 7.0
  • Decrease the time to resolution for phone queries from 10 minutes to 6 minutes
  • Begin tracking how many queries per issues were required before resolution

Notice that all the metrics are key results, not the objective. And that we don’t assume any kind of solutions. You want your key results to allow you to change course on specific solutions in the middle of the quarter if they’re not succeeding. So for the first key result, your team could try implementing a self-service model or you could try building a support community, or you could even look at addressing features that customers call in about that need to be redesigned for usability. The point is, you have flexibility.

As part of The Product Strategy Handbook, we include a template for capturing OKRs within your product strategy. The format below makes it easy to work with multiple OKRs at the same time.

A template to capture your OKRs (From The Product Strategy Handbook)

Example OKRs from well-known companies

Example 1: Nuna (healthcare data and analytics)

Objective: Continue to build a world class team

Key Results:

  • Recruit 10 engineers
  • Hire commercial sales leader
  • 100% of candidates feel they had a well-organized, professional experience during
  • the hiring process, even if they were not hired

Example 2: YouTube

Objective: Reach 1 billion hours of watch time per day by 2016

Key Results:

  • Search team + Main App (+XX%), Living Room (+XX%)
  • Grow engagement & gaming watch time (X watch hours per day)
  • Launch YouTube VR experience & grow VR catalog from X to Y videos

Example 3: Gitlab (slightly reworded for clarity)

Gitlab OKR example (slightly reworded for clarity)

How do OKRs fit with my product strategy?

OKRs help make your product strategy tangible and actionable. To understand where they fit, it helps to think of your product strategy as a pyramid which becomes more specific and tactical as you move down it.

Vision is at the top of the pyramid. Think of your product vision as your north star, it describes the change you want your product to make in the world but not now you will achieve that change.

Below that comes your strategy, including your value proposition and more specifics about the product you are making.

Then comes your OKRs, they describe which parts of the strategy you are focusing on right now and what success looks like. For most people, OKRs are at a similar level of fidelity to the top-level items on their roadmap.

OKRs in context with Vision and Strategy

How do I get started with OKRs?

The power of OKRs is in the way they cascade through an organization and allow everyone to choose how best to contribute to the organization's goals. Generally speaking, senior people in the organization create and agree on the top-level objectives and key results. So, it's vital to get buy-in from everyone that this is what you're aiming for, even if you're just doing them in your department to start with.

You should be getting ready to introduce OKRs a quarter of a year ahead of time, because you’ll need to cover the following steps:

  1. Educate senior stakeholders on what OKRs are and get buy-in for using them.
  2. Hold a series of workshops in which you agree on the OKRs at a high level. You could use a format like the one below but set OKRs based purely on company vision and strategy rather than cascading from other OKRs.
  3. Facilitate workshops (or train OKR champions to do it) in the various departments and levels of the organization to create their own OKRs that contribute to the top-level ones.

How do I create OKRs with my team?

Depending on how much you have to get through and how efficient you are, this process can take anywhere between three and six hours. You can run this with teams of up to 8 people. If you have more than that, split it into several smaller workshops.

You will need:

  • Whiteboard or flip-chart paper on the wall
  • 2 size sticky notes (large and medium)
  • Lots of sharpies
  • If remote, you can do this with a virtual whiteboard like mural or miro

TIP: It can be difficult to play the role of participant and facilitator at the same time. So use a facilitator who isn’t part of the team. People often bring in a professional facilitator for this or have people from different teams facilitate for each other. This is likely to help keep you on track, and guide you through the process, plus improve quality of output.

Before the workshop

  • Ensure participants know what OKRs are and why we are using them
  • Make sure everyone is aware of Vision, Strategy, and other quarterly priorities ahead of time
  • Have everyone prepare and collect priorities to be included in the OKRs. Encourage them to think of a variety of items that contribute to: their goals, their, manager’s goals, their peers or other departments, improvement of BAU, achieving objectives in the product strategy

In the workshop

  1. Have each individual write their priorities on small sticky notes (one item per note), put them up on the wall and explain them (with short comments/questions)
  2. Create an affinity map by grouping all the sticky notes into into themes. Here’s more on how to create an affinity map if you’re new to it.
  3. Refine the themes on the wall. You can use dot voting to help here. For items that are important but not right now, take them off the wall and add to backlog. If items are not important at all or not aligned with strategy, remove them and throw them away.
  4. Finalize the themes. You’ll probably need to use gut feeling here and discuss with your team how many topics to take up to finalize. You can dot vote again to prioritize if there are too many themes to carry forward.
  5. Apply temporary headlines for each theme (which will become an objective). Don’t formalize the objectives yet, they will change once you have key results.
  6. Formulate KRs for each objective. Review all the sticky notes and write up to 5 key results that describe a clear outcome that support the objective. Use the criteria for what makes a good key result from earlier in this article to help you.
  7. Write your objectives for each theme. Describe the change you want to see by the end of the OKR cycle (likely the quarter). Use the criteria from this article to make sure your objectives are well-written.
  8. Validate feasibility of adopting all OKRs on the board. You may need to dot vote on objectives or key results in order to prioritize and reduce commitments if it’s feeling like too much. (HINT: it will probably be too much – most people over-estimate how much they can do when they first start with OKRs)

How do I use my OKRs through the cycle?

Now that you’ve set your OKRs, it’s time to make them part of your day-to-day work. First up, keep them somewhere visible. OKRs are supposed to be transparent – in fact, that’s one of the key factors that makes them successful. Put them somewhere easy to find in your organisation’s shared documentation, so you can and refer back to them when planning and prioritising

Talk about them. Make them part of the conversation day-to-day to keep them fresh in people’s minds. The more often you refer back to them, the more likely people will be to take them into account when planning and prioritizing their work.

Review progress and identify blockers at least every two weeks. This can fit nicely into a weekly review meeting or an extended standup.

Let stakeholders know how you are doing with your OKRs. Highlighting what you’ve learned and why you are prioritising things will improve buy-in and manage expectations. You can do this formally as part of your regular meetings with them and informally as part of your day-to-day conversations with them.

Your OKRs might become top-level items in your roadmap if that’s how you choose to manage it. This will make it easy to keep them front of mind and ensure you track your progress with them.

How do I refresh my OKRs for the next cycle?

Generally speaking, people refresh their OKRs in quarterly cycles. Let’s explore a simple format for doing that now.

Step 1: Reflect

Reflect on the last quarter. Think about what you did and didn’t achieve, and what your team did and didn’t achieve. For things you didn’t achieve, are they still relevant for next round? If not, throw them out. If so, think about why you didn’t achieve them and what you can do to accomplish them in the next quarter. Bring them into the next round

For things you did achieve, reflect on whether it was a stretchy enough goal / whether the objectives and key results were designed appropriately.

Come up with a list of the top five priorities in your mind for next quarter

Step 2: Gather team Input

Ask the team to send you their suggested objectives for the next quarter. Don’t allow too much time for this task, maximum two days. To encourage them to think strategically, you could frame it using the question “If you were running the team, what would be your top 5 priorities for the next quarter?”

Once you receive all ideas, filter these items to the top items (considering your own list from earlier) by asking:

  • What is your team’s focus for the next 3 months?
  • What matters the most?
  • What keeps you up at night?

Build a first grouping of topics / objectives either individually, or as a small group. Take a stab at prioritization, but allow for input later if push back.

Run a half-day team alignment and OKR formulation workshop in which you:

  1. Share and explain your groupings and first pass at prioritization
  2. Revise if necessary
  3. Run steps 5-8 of the full OKR workshop above.
  4. Cut it short if done early!

Step 3: Get aligned across functions

Organize a meeting for team leaders and key members of each team in which you:

  1. Present team OKRs to each other
  2. Collect feedback for revision (and either revise in meeting or outside meeting and resend afterwards
  3. Gain agreement on your OKRs that require support from other teams

Step 4: Ensure Cascading

Review higher and lower levels OKRs (or vision and lower level OKRs if you are at the top of the cascade) to make sure your OKRs are contributing and supporting.

Note: Not all OKRs need to cascade perfectly as long as they capture the essence of what your management is trying to achieve, are not contrary to company strategy or you have secured alignment from cross-functional teams and your OKRs do not block/hinder the success of their own OKRs.

Step 5: OKRs are now finalised! Publish and share across the company

By this stage, your OKRs should be well-socialised and there should be no surprises when you share them with the company. Keep them front of mind and use them to stay on track through the coming OKR cycle.

In summary...

OKRs are an effective methodology for product organisations that want to take an objectives-based approach to management. This article has given you the basics of how to use them with your team but there are plenty more resources you can use if you want to go into more detail with OKRs.

Many of our clients use their time with a product coach to help them work out the specifics of how to make the most of OKRs in their product teams. If that sounds useful to you, book a free coaching consultation and we’ll talk it through together.

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Robin Zaragoza
Robin Zaragoza

Founder and CEO at The Product Refinery, Robin has been working in tech for 20 years and delivering product for the last 15 of those at companies of various sizes, from early stage start-ups where she was the first product manager, to large publicly traded companies where she led teams of product managers.

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