Every product and service should have goals and objectives. Setting goals can help align your team, prioritize your roadmap, and communicate your progress to your stakeholders. But how do you set and track your goals effectively? One popular method is to use Objectives and Key Results, also known as OKRs.
What are Objectives and Key Results?
As a product manager, you are responsible for defining and delivering the value proposition of your product to your customers. You need to have a clear vision of what problem you are solving, who you are solving it for, and how you will measure your success.
OKRs are a goal-setting framework that helps you define and measure your outcomes. OKRs consist of two parts: an objective and one or more key results. The objective is a clear, specific, ambitious, and time-bound goal that aligns with your product strategy. The key results are measurable indicators that show how you will achieve the objective. Each OKR follows this pattern.
We will [ objective ] and will measure this by [ key result(s) ]
Let’s use YouTube TV as an example. An OKR for YouTube TV, a product that allows subscribers to stream and record live sports, shows, and news, could be:
Objective:
Increase subscribers for YouTube TV
Key Results:
- Achieve 10% month-over-month growth in subscription revenue
- Increase retention rate to 90% by reducing churn
- Improve customer satisfaction score to 8/10 by enhancing user experience
Now, how the team achieves those key results can be further broken down into smaller goals and milestones and measured with KPIs.
How are OKRs different from KPIs?
Those 3-letter acronyms can sometimes be thrown together and used synonymously but each are distinct measurements. OKRs are different from Key Performance Indicators (KPIs) in that they are not just metrics, but also goals. KPIs are used to monitor the performance of your product, but they may not reflect your desired outcomes. OKRs, on the other hand, are used to set and communicate your direction, focus, and priorities. OKRs can help you answer questions like: What do you want to achieve? How will you know if you are successful? What actions will you take to get there?
OKRs are flexible and can be tweaked along the way since they are designed for ambitious goal setting. Whereas KPIs are set measures and quantifiable measures of performance. The scope of an OKR is broad and usually highlights organization strategy and goals. Versus KPIs that are very specific and tied to specific measuring of results and performance.
In short, an OKR is a framework used to set specific goals while KPIs are the ways in which those objectives are measured and monitored.
How to Create an OKR
To create your own OKRs, you should consider the following steps:
- Create a product strategy
The first place to begin is understanding your product vision and strategy. What is the ultimate value that you want to deliver to your customers? How does your product fit into the overall vision and strategy of your organization? You should be able to identify key priorities, areas that your team will focus on to meet those objectives. Your product strategy may be more easily created with a visual roadmap to convey the direction of your product over a period of time. While a product strategy can take time to develop, it’s important to remain flexible and iterate on each goal.
- Identify your product objectives.
Some OKRs are defined by an organization, others you as the product manager may have to create on your own. What are the specific, meaningful, and achievable goals that you want to accomplish in a given time period? Your objectives should use the SMART framework: Specific, Measurable, Achievable, Relevant, and Time-bound. Objectives for OKRs are meant to be stretch goals, while it should be achievable, it should also require a little creativity and an extra push to fully meet the goal.
- Define your key results.
Defining your key results are important to track your results over time. How will you measure your progress towards your objectives? Your key results should be SMART, as well as quantifiable, verifiable, and challenging. You should have at least one key result for each objective, but not too many that would dilute your focus. While objectives are usually broad in scope and can encompass multiple key results, it’s important to be able to understand what the goal of the objective is, break down the objective into small actionable tasks, and ensure that each can be measured over time. Your key results should align with the organization’s strategy and you can always iterate and adjust your results and measures over time, just make sure you communicate any changes with your team and stakeholders.
- Communicate your OKRs
How do your OKRs align with the OKRs of your organization, department, and team? Consider how you can share your OKRs with your stakeholders and get their feedback and buy-in. By communicating your OKRs to others, not only do you get feedback on the direction of your objective, but it also signals a clear understanding to others that these are your top focus areas for the given period. A part of product management is constantly triaging requests and prioritizing as needed. By publicly communicating your objectives, it helps you maintain a north star for priorities as new requests come in.
- Track and review your OKRs.
Once you’ve done the hard work of realizing your objectives, it’s important to determine how you’ll know when you meet (or exceed) those objectives. This is where KPIs are created to regularly track and analyze the performance towards your objectives. You need to determine;
How will you monitor and report your OKRs on a regular basis?
How will you evaluate your performance and learn from your results?
How will you celebrate your successes and address your gaps?
This is not an exhaustive list of questions but are some key things that need to be considered once you have established your OKR. If you cannot measure your objectives, it’s difficult to get buy-in and support from others if you can’t convey the progress. Continuously review your metrics and refine your strategy as needed based on feedback from customers, market conditions or even a change in direction from your organization.
OKRs are a powerful tool for product managers to set and achieve their goals. They can help you align your team, prioritize your roadmap, and communicate your progress to your stakeholders. By using OKRs, you can ensure that your product delivers value to your customers and your organization. It helps you easily align your product strategy with company goals and objectives so that you can ensure you’re working towards the right goals and achieving the best results.
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