Product management drives the product from concept to market. But how do we measure our outputs in the context of the company strategy and goals? Enter OKRs – Objectives and Key Results. When applied correctly, this strategic framework aligns and mobilizes teams towards shared goals with precision.
Product Team OKRs
Empowered product teams with design and engineering resources should proactively set their OKRs. These teams operate independently, with the tools and expertise to advance their projects. Once they establish their OKRs, they can consult with their direct managers. This step is not about seeking approval but rather an opportunity for managers to provide insights from across the organization to ensure alignment and share valuable context.
For a product management organization, typical OKRs might look like this:
1. Objective: Accelerate Product Innovation
– KR1: Launch two new flagship features driving a 40% increase in user engagement.
– KR2: Cut down feature development lifecycle by 20%.
– KR3: Achieve a product market fit score of over 8.0 for new releases.
2. Objective: Maximize Product-Led Growth
– KR1: Attain a 30% increase in user acquisition through in-product referrals.
– KR2: Improve net promoter score (NPS) to over 50.
– KR3: Grow monthly active users (MAU) by 50,000.
3. Objective: Optimize Operational Excellence
– KR1: Implement a new product management toolset to reduce go-to-market time by 15%.
– KR2: Achieve a 90% sprint completion rate.
– KR3: Decrease critical bugs at launch by 50%.
The OKR Creation Process
The process is democratic yet decisive. Each leader proposes what they believe the Product Team OKRs should be. Debate ensues, common themes emerge, and the decision-maker finalizes the objectives. This method ensures buy-in and leverages collective intelligence.
The Objective (O) sets your team’s goal. It’s your rallying cry, like a movie tagline that sticks in your mind, not tied to specific numbers but designed to inspire action and drive your team forward.
Key Results (KRs) are the signposts that track your progress toward that goal. They are concrete, quantifiable outcomes that clearly indicate whether you’re on the path to achieving your Objective.
Individual OKRs
Avoid OKRs for individuals. The cost to create and manage them across an entire team outweighs their benefits. Instead, contextualize individuals’ work in the overall Product Team or Sub-Team OKRs.
The OKR Timeline
Product teams should assess their previous quarter’s OKRs with a critical eye two weeks before the quarter’s end, recognizing that significant shifts in strategy are unlikely in the final stretch. This review determines whether to proceed with the current trajectory, pivot, or reset the objectives entirely.
While annual OKRs are crafted by executives, often during focused offsite meetings, the company’s quarterly OKRs are set shortly before the end of the current quarter. Initially, this may require several meetings to master the OKR process, but it should streamline to a single two-hour session over time.
Product teams should engage in a swift exchange of OKRs with other teams, ideally within a 24-hour window. This cross-review ensures that all teams’ OKRs are in sync and opens the floor for constructive feedback. It’s a collaborative effort to refine goals and strategies, with the understanding that collective improvement drives company success. Once the review period ends, teams commit to their OKRs for the quarter, avoiding the trap of over-analysis. This approach is about learning by doing, with each cycle offering a new opportunity to enhance the OKR process.
Tracking OKRs
Use a simple, color-coded system to track progress: green for on-track, yellow for slightly off, and red for far off-track. Regular updates ensure transparency and accountability, with any red flags triggering an immediate action plan. Alternatively, use third-party software to manage tracking OKRs.
