June 11th, 2022
Objective Key Results (OKRs) is an organizational goal-setting framework that was developed in the 1980s. Most tech companies live and breathe OKRs, including giants like Google and Airbnb. Even Microsoft is making their transition to OKRs. Despite their ubiquity, product managers often have a hard time coming up with good objectives and establishing key success metrics. In this blog post, I will go over OKR requirements, plus a couple of tips that are not essential to the OKR framework but can be thought of as training wheels that can help you ride.
Although not a required part of OKRs, context can set the stage and provide motivation, just like the introduction to this blog post. In this section, explain why you are pursuing this objective. Did you notice a pattern in one of the feedback loops? Is this going to help you achieve your product vision? You can also include social proof like customer quotes. I recommend starting with context first to organize your thoughts, then revisiting and possibly rewriting it as your final step. Keep it concise.
I deliberately skip the obvious next step of writing the objective and go straight to Key Results (KRs). It may seem counterintuitive, but KRs can help us understand the problem better and make coming up with a defined objective easier.
KRs help us measure success, the health of the objective and progress towards our goal. The KRs have to be quantitative and you should be able to measure them today. This way you will know whether you actually moved the needle or if the objective is not driving any impact. The KRs should not be used as a metric for managers to measure the performance of product managers but instead for prioritization and optimization of resources.
I group my key results into two groups:
Will this objective bring value to users and if so, how can we measure user success? Try to define what success looks like for an engaged user. It could be posting and receiving 6 messages, connecting 2 additional accounts or inviting and engaging with 3 users on your app.
Will this objective bring value to the business and if so, how can we measure how much? At the end of the day, we want to ensure that the objective will also make our business more successful. We can measure things like the conversion of users from free to paid from interacting with that feature, or the number of users no longer dropping off because of a missing feature. We can also tie KRs to the revenue we are hoping to bring in thanks to the objective we are pursuing. Again, do not commit to something you cannot accurately measure or attribute to the objective.
The KRs have to drive an outcome and not output. Let’s say we wanted to add a new feature to our product. A potential KR could be:“We deliver the feature within 2 week period”
However, this focuses on the output without driving the outcome. Instead, we should focus on measuring the value that the addition of the feature will bring. Ideally, even before building the feature, you know which metrics you wish to improve and the feature is helping to drive those metrics up. Although not mandatory, I prefer to number my KRs in order of priority.
It is also a good idea to write KRs together with your product pod and to get their buy-in and sanity-check them with others in the company. Try to see if there are similar historical objectives, and if so, what KRs were measured.
Now that you understand the problem you are trying to solve and how you can measure the success of solving that problem, it should be straightforward to set a qualitative, aspirational objective. The objective should be a single, easily understood sentence. You will be using it to empower your team and get the buy-in from the leadership. It has to be specific to the problem you are trying to solve and could help support a higher level objective or company focus.“Deliver the best product onboarding experience to increase user activation”
The objective is aspirational and you understand what metric it is supporting.
Depending on your company or your team, there could be different requirements on what else should be part of OKR. I like to include the person responsible for the OKR (it should be the person writing it), my counterparts in the product pod contributing to OKR, stakeholders that approve the OKR, and others who should be informed. After, I include what initiatives we need to do in order to make this OKR a success. The next part is the milestones of when the KRs should be revisited and reviewed. Again, all of those parts are optional and could easily be part of a Product Requirement Document or another medium, depending on how you track and share information at your company.
Now that you have the OKR in your hands, it is time to get it out there and champion the objective and its success. Just make sure to review the KRs at the agreed interval defined in the milestone section.
If this helped you to write better OKRs, please share this blog with others. Let me know if you have any feedback by reaching out on LinkedIn.