Being a product manager nowadays may seem like a daunting task. Strict deadlines, exhaustive assignments, and being on top of customer trends can be draining. This is why successful product managers are always on the lookout for a better, more effective way to do their job.
As a manager, you’re responsible for your whole team. Having a framework that incorporates the goals and objectives of a business with a proper structure can be all you need to manage your day-to-day operations efficiently.
Product management OKRs or Objectives and Key Results, provide you with such a structure.
In this article, we’ll discuss what OKRs are, why they’re important, and how to implement them into your business practices.
What are OKRs in Product Management?
OKRs is an abbreviation for Objectives and Key Results. It is a goal-setting framework that encourages collaboration between team members and drives positive change in the overall organization.
This goal-setting methodology was first introduced by Andy Grove, CEO of Intel, in the 1980s. Other prominent names in the industry such as Bill Gates and John Doerr learned about this model and have been implementing it since.
OKRs started gaining recognition in Silicon Valley and they constitute a framework used by Google, LinkedIn, Intel, Twitter, and many other corporate giants.
Product management OKRs help create a sustainable system to grow as this framework focuses on the bigger picture. Rather than jumping from feature to feature and continuously updating your products, the OKR approach focuses on the outcome of processes – the behavioral change in employees that attracts growth.
To get a better understanding of OKRs and their importance, we need to be familiar with the two main elements of OKRs:
- Key Results
Objectives are the qualitative goals that the company strives to achieve within a given time frame. These are often broad so that all members can participate and discuss different paths to achieve the objective.
Well-established objectives push your team, develop their skills, and are realistic.
Key Results are specific quantitative goals that help measure your success in achieving the objective. These give you a clear idea of what to focus on and are tracked to know whether you’re making progress and meeting your objective.
Ideally, you should set 2-5 key results for an objective as any more can over-burden your team and divide their attention. Remember, key results should push your team out of their comfort zone but also be realistic.
There are also two other crucial components of OKRs that provide a complete and efficient framework. These are:
- Weekly Check-ins
Initiatives are the “how” behind your Key Results and are the backbone of defining productive OKR sets. It is the plan of action to achieve your key results and helps define what tasks need to be completed to get a defined outcome.
Checking in on the progress of your OKRs is also essential to know what’s working and what’s not. Every week you can check and assess the work and adjust your strategy accordingly. Since OKRs are open-ended, there’s always room for adjustments which is why you should check in once a while and see if anything needs changing.
We discuss these elements in further detail below to give you an even better idea of how to use this knowledge to achieve the best results with your OKR sets.
Why OKRs Are Important in Product Management
“OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of ‘organizing the world’s information’ perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most.” – Larry Page, Co-founder of Google
OKRs are crucial for business growth as they encourage change and improve the production process to stand the test of time. Gone are the days of working endless shifts in a factory churning out features on the production line.
Below we’ve highlighted the benefits of using OKRs for your business.
Provides a Clear Focus
Product management OKRs provide a framework that takes into account the tasks you want to achieve. This hierarchy makes it easier for your employees to prioritize tasks and give them an idea of what to do next.
Improves Your Team’s Ability and Skills
Effective key results are those that push your team to expand their capabilities. This way of goal-setting helps unlock your team members’ true potential and achieve difficult tasks efficiently.
Since these OKR sets are usually time-constrained, the tight deadlines will also motivate your team to better manage their time. Which leads them to become more productive and find efficient ways of accomplishing time-consuming tasks.
Encourages Collaboration Between Team Members
When setting OKRs, it’s important to include most, if not all, of your team members. OKRs are open-ended and therefore can be assigned to all levels of management which leads to improved collaboration between departments.
The sharing of different ideas and insights, and coming together under a common goal, will create a collaborative community that boosts morale.
Gets Things Done Faster
Product management OKRs are set up by team members themselves which allow them the freedom to set targets according to their strengths. This helps team members be productive and efficient.
Also, since OKRs are clearly defined and the strategy can be adjusted mid-way, team members can quickly track progress and adjust strategy to achieve goals on time.
As General George S. Patton said:
“If you tell people where to go, but not how to get there, you’ll be amazed at the results.”
Holds People Accountable
The main advantage of OKRs over other product management techniques is that it focuses on outcomes rather than outputs. Asking people to set their own goals encourages self-development. Holding employees accountable helps keep everyone focused on the task at hand and encourages them to take their work seriously.
How to Define OKRs
When designing an OKR framework for your business, you can work from the top-down or the bottom-up. The basic idea is that you start with a broad objective you wish to achieve with your business such as:
- “Have the highest market share in the SaaS industry.”
Next, break it down into key results and assign tasks with a set objective such as:
- “Increase customer base by 30%.”
To set your objectives and key results you need to consider the context of your business, your customers’ needs, and your unique strengths.
Ask yourself questions like:
- “What does success look like for us?” or
- “How can we fully utilize our strengths to achieve this goal?”
Knowing the answers to these questions might clarify what exactly you want to achieve with your OKRs. But before drafting your OKR framework, you should ask yourself:
- What will your quarterly/half-year goals look like for each department?
- What is your company’s Purpose and Vision?
- Do you have a proper Product Vision and Strategy?
- What are your company’s strengths and flaws?
- What does our product discovery, which provides an understanding of customer problems and their possible solutions, look like?
Creating product management OKRs without knowing the above can be troublesome. If you don’t have the answers to all your questions you should start now to find solutions.
If you do have your answers, then you’re ready to create high-quality OKRs. Remember quality inputs lead to quality outputs so having a good product strategy will lead to a better outcome from your OKRs.
This means you shouldn’t just list a bunch of tasks that need to be achieved and call it a day. You should challenge yourself and your team to look at the objective from different angles and find as many ways as you can to tackle them.
Most product managers commonly focus on generic metrics such as revenue or profits. That’s not bad but looking at the problem from different angles can open up new opportunities to enhance your workflow.
You can also focus on other metrics such as:
- Conversion rates
- User experience metrics (bounce rates, sessions, time on page, etc.)
- Customer reviews from sites such as App stores or G2
- Number of completed sign-ups, demo requests, forms, and surveys
- New product launches
Product Management OKRs Examples
Company OKRs shouldn’t be confused with the mission statement. The mission statement is the ultimate purpose of the company whereas Company OKRs are goals and objectives that are to be achieved within an established timeframe, usually, quarterly or yearly.
Below is an example of what the overall company’s OKR might look like:
Objective: Increase market share
KR1: Increase user engagement by 20%
KR2: Increase customers from Germany, France, and the UK by 30% to increase international sign-ups
KR3: Scale operations by launching the app XYZ
You’ll notice that the last KR is different from the others as it isn’t a variable that can be measured. This is because these KRs can cascade down to lower levels of management.
Product Team OKRs
The OKRs of the product team are closely related to the Company OKRs. Usually, the bulk of the pressure is absorbed by the product team who may be responsible for keeping the whole organization’s strategy intact.
Here’s an example of the Product OKRs
Objective: Launch app XYZ
KR1: 40% of all traffic comes from US audiences
KR2: Offer multilingual options in app XYZ to target German, French, and British users to increase international customers by 30% within the first two months of launch
KR3: Monthly traffic grows on app XYZ an average of 20% per month
As mentioned above, KR2 is closely aligned with the company’s KR2: increase the company’s reach to international customers by 30%.
Cascading key results like this provide a better structure and establishes a logical hierarchy within the organization.
Individual Team OKRs
Individual OKRs may handle the user’s needs directly and may be more specific to the product itself. An example might be:
Objective: Provide better after-sales support to customers
KR1: Reduce support ticket verification time by 50%
KR2: Reduce customer support ticket requests by 30%
KR3: Introduce a live-chat feature for shorter queries
Setting up Effective Product Management OKRs
When setting up OKRs, make sure that your key results accurately align with the objectives. Also, be sure to set product management OKRs sparingly and only include key tasks that need to be accomplished. Broad OKRs encourage team members to find different ways of accomplishing the task within the given time frame and incentivize them towards efficiency and innovation.
“If everything is important, nothing is.”- Patrick Lencioni
Designing an OKR framework should be a collaborative practice. Including as many people as possible is beneficial as they will each draft their OKRs according to their capacity. Every cross-functional team included should be on the same page to avoid future issues and misinterpretations.
If you take on a senior role, you should encourage everyone to join in on the discussion of setting the OKRs. Your objectives are ambitious so don’t trick yourself into following just one traditional way of doing the job. More input from employees can lead to further breakthroughs, innovation, and effective solutions.
Finally, to get the best results from your OKRs, you should make sure not to break down key results too much. Although cascading is helpful for collaboration and effectively achieving your targets, overdoing it may reduce the overall efficiency of the OKR goal-setting framework.
Planning Initiatives and Following an Action Plan
“Ideas are precious, but they’re relatively easy. Its execution that’s everything” – John Doerr
After setting OKRs, teams create a plan of action and get to work. This is the main bulk of the work which is why everyone needs to have a plan which makes sense to them and incorporates their unique strengths.
Perform Weekly Check-ins
The most effective OKRs are those that push your team to achieve their maximum potential. Thus, most successful OKRs have one thing in common – tight deadlines.
OKRs are time-bound, so it’s important to know whether the objective will be achieved within the deadline. This is why performing weekly check-ins is necessary. If you feel as if the current strategy is going to underperform, then this is an opportunity to adjust your strategy and make revisions.
These weekly checks allow you to assess the risks, challenges, and unexpected situations that may occur during the process. If you do find something worth noting, it’s a sign that it’s time to change aspects that might not be working.
OKRs lay out a reframed approach to the generic business process of pumping out feature after feature. Implementing OKRs for the first time can be difficult as you don’t know what to expect. But no matter your objective, the end goal of every OKR is the same – to drive long-lasting behavioral change which pushes your team to achieve their true potential.
This is why self-analysis and introspection are necessary at the end of each OKR time frame. Taking a step back and looking at the outcomes of the OKRs will help you plan for the future. Evaluation helps assess what works, what doesn’t, and what to do moving forward.
Examining the outcomes will enable you to revise future OKR sets and tailor your strategy accordingly. Following this process and refining your OKRs over time will empower you to set better goals and achieve difficult tasks in less time. Evolving a process like this will allow you to stay on top of your competition and excel in your product management efforts.
Differentiating Between OKRs and Product Management Roadmaps
OKRs are not the same as product management roadmaps, but rather, they are two sides to the same product management coin.
Product roadmaps provide the opportunity to develop and update products aligned with your company’s vision and progress. Roadmaps are an action plan for your short and long-term product goals.
Unlike product roadmaps, OKRs don’t focus solely on the product, but rather on the outcome of wider business processes.
The output is different from the outcome. The outcome is the behavioral change in your employees which has an overall positive impact on the company. The output is the result of different inputs that are limited to the product.
Knowing this difference can help you define more meaningful OKRs rather than focusing just on creating products and introducing new features.
Differentiating Between OKRs and KPIs
OKRs are also different from KPIs, although both can be used together. OKRs provide a framework that connects business goals. KPIs are key performance indicators that measure specific standalone goals.
KPIs give a metric to focus on and maintain for business success. But it doesn’t drive change as OKRs do.
Both reflect team performance and measure the progress of the business.
OKR Best Practices in Product Management
There are many ways of implementing product management OKRs that may leave room for error. Here are some best practices for setting effective OKRs for your organization.
Set Realistic But Ambitious Goals
The outcome of your results is dependent on the goals you set for your OKRs. You should set difficult goals that push your team to its limits and expand their capabilities. The goals should be difficult, but not impossible.
John Doerr also stresses this point by stating:
“If you’re getting 100 percent of your OKRs done, that’s not good. You probably weren’t aggressive enough.”
Don’t Break Down Tasks Too Much
Avoid cascading tasks to the very bottom of the org chart since that will overcomplicate and reduce the overall efficiency of the defined OKRs. You should keep KRs to a maximum of five and ensure the link between tasks is strong.
When setting OKRs, ensure a smooth process and communication between cross-functional teams and departments. Allow people to post updates on their progress, explain challenges and doubts they may be facing, and talk out their anxieties.
Make Following OKR Sets Easy
If you want your workforce to stay on track, you need to make your OKRs easy to manage and reference so people can stay updated. Also, since your workers are busy, keep meetings short and engaging – don’t fixate on minor issues.
OKRs provide an effective framework to achieve business objectives. They were a factor in the success of many major companies.
Implementing OKRs for your business will drive positive change to your business and direct your team members to work with purpose. If practiced consistently, OKRs can be crucial for your long-term success.