Contents
- What are the goals and key results (OKRs)?
- How do product managers use OKRs?
- Compliance of goals with the goals of the company
- Coordination with other functions
- Compliance with the product strategy
- How to write an OKR (with examples)
- Example no. 1: OKR based on results
- Example no. 2: Convert delivery target to OKR
- Downloadable and customizable OKR templates
- OKR best practices
- Check-in and check-out at OKR
- Implementation and monitoring
- Quarterly review
What are the goals and key results (OKRs)?
Objectives and key results (OKRs) can help product managers direct and focus team efforts, increase impact, align, and ensure everyone is on the same page.
The OKR framework was developed by John Doerr while at Intel in the early 1990s. Since then, OKRs have become a popular tool for measuring progress and improving performance in organizations as well as elsewhere.
doerr book,Measure what matters, show showcollects up-to-date and relevant datato track your progress to improve your scores. And in 2018 she gave an excellent oneTED talkabout why the secret to success is setting the right goals.
OKRs are widely used in product management because they enableproduct managersfocus on the goals their company has set to achieve and mobilize others in the organization to focus on them as well.
Using OKR allows product managers to:
- Track multiple priorities and goals
- Concentrate on the most important things
- Communicate product goalsinterested parties
- Measure progress against product goals
Although these are just some of themmany product manager responsibilitiesare usually among the most important. Project managers often delve into data and create reports and dashboardsmonitor progress towards key business goalsand provide updates to interested parties.
How do product managers use OKRs?
Project managers can effectively create OKRs in collaboration with other functions before the next quarter.
There are three main matching activities to triangulate successful product OKRs to help you avoid being swamped by new initiatives emerging during the quarter:
- Compliance of goals with the goals of the company
- Coordination with other functions
- Compliance with the product strategy
Compliance of goals with the goals of the company
When setting OKRs, it is important to align goals with the organization's strategy and ensure that important outcomes are measurable.
Coordination with other functions
Connecting with leaders from other departments will help ensure compliance and avoid losing initiatives that may need to be supported from a product governance standpoint. It also identifies any other urgent initiatives that may require development resources and prioritizes less urgent, strategic initiatives.
Compliance with the product strategy
Some goals may be related to your overall scoreproduct strategy. These goals can be reduced to the product experience itself and contribute significantly to the company's financial goals.
You should also work with yoursrelevant engineersto identify performance needs to meet company-wide goals by aligning company-wide product goals.
How to write an OKR (with examples)
There are a few things product managers should keep in mind when configuring their OKRs:
- Goals should bespecific, measurable, attainable, relevant and time-bound (SMART)
- Objectives must be consistent with the company's strategy
- Key results must be measurable
To demonstrate how to create an OKR, let's look at some illustrative examples:
- Results-based OKRs
- Convert delivery purpose to OKR
Example no. 1: OKR based on results
Intention
Build a high-performance demand engine.
Key results
- Increase the number of visitors on the page by 10 percent
- Get 100 new leads per month
What if the company has no purpose?
If you're not objective, you're probably taking orders from above. Either that, or you're a feature factory, or maybe you're running projects instead of optimizing to meet goals.
If you don't have a formal goal setting framework, try these starting points:
- Reset your electricityfocus on the productas a cell
- Associate it with one of the company's current goals
- Describe 2-3 measures that describe what success looks like
Example no. 2: Convert delivery target to OKR
Intention
Delivery of project X by the end of the year.
Key results
- Engineering teams maintain sprint speed at X story points throughout the quarter
- Conduct five customer interviews analyzing user experience to gather usability feedback
- Organize two product briefings to share project progress with your organization
If coming up with quantifiable metrics of what you're working on is too hard, maybe it's just a performance oriented goal and the key measure of success is getting something done by a certain date which is fine if it's a milestone to work towards again. You should still be thinking of metrics you can track along the way that show you're making the right progress.
Collect key performance data
Make sure you can actually get key performance data when you identify the critical metrics that show the success of your goal. If there are important success metrics you're not currently tracking, make sure they're in range and build them before you start reporting on them.
Tactics is not the key outcome
A common mistake is to treat key results as a to-do list. Key results should be easily measurable. if you present tasks to be done, they should be understood as tactics - things we can do to achieve a key result. This is best left to the team to weigh the effort and prioritize the best possible tactics.
Tactics can be gleaned by asking the wider group for ideas on how to achieve goals. A workshop session conducted by a product manager would be ideal here.
Limit the number of goals
Ideally you don't need more than three to five goals at each level of the organization as they are downsized. Individuals have their own goals, which should align with operational and business goals. Similarly, individuals should not actively pursue more than three to five goals at any given time.
Consider capacity
Limiting the number of targets across the board and making sure they are all lined up is also important for capacity.
Considering the above example,product, user experience and engineeringthey may need to work together to ensure proper planning is done to ensure sprint speed. Product and UX should work together to acquire customers and plan, conduct and synthesize interview results. This may limit their effectiveness in helping define work for engineering teams.
OKR standards and best practices
There are several OKR scheduling strategies. I suggest checking yours firstmetric piracy (AARRR):
- Acquisition- Customers who find a product
- Activation- customers who experience the core value of the product
- Book- returning customers to reuse the product
- Reference- customers who share the product with others
- Income- generating revenue from customers
There's one hereDownloadable and customizable OKR templateyou can use when planning your OKRs. We also have templates available for the following (more on these later):
Check-in and check-out at OKR
Reviewing and separating OKR from other functions is key to making sure you're aligned from the start and eliminating any surprises that happen during the quarter.
As a product manager, you often have the context around what the company is trying to achieve and you have to meet with other functions to adjust the OKR and make sure everyone is working towards the same goal. It is also an opportunity to understand what is important to stakeholders and share what you hope to achieve during the quarter.
In addition, it allows you to discover tactics together and determine which actions are appropriate to achieve your goals in the most effective way.
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FAQs
What are OKRs and how do you write them? ›
For how to write OKRs, the actual formula is simple: Objectives are goals and intents, while Key Results are time-bound and measurable milestones under these goals and intents.
What is an OKR template? ›What is an OKR Template? OKR (Objectives and Key Results) templates work as a performance management system to provide a framework for setting team objectives and tracking results.
What are examples of OKRs? ›- Hit company global sales target of $100 Million in Sales.
- Achieve 100% year-to-year sales growth in the EMEA geography.
- Increase the company average deal size by 30% (with upsells)
- Reduce churn to less than 5% annually (via Customer Success)
- Understand your company goals. Writing effective OKRs starts with understanding your organizational goals. ...
- Choose the right tools. ...
- Involve your whole team. ...
- Write an OKR objective statement. ...
- Develop key results. ...
- Plan your initiatives. ...
- Track them consistently. ...
- Celebrate 70%
OKR Methodology Overview
OKRs consist of an objective, a clearly defined goal, and key results, which measure progress toward achieving the defined goal.
An OKR consists of an Objective, which tells you where to go. Several Key Results, which are the measurable results you need to achieve to get to your Objective. And Initiatives, which are all the projects and tasks that will help you achieve your Key Results.
What are the 2 components of OKR? ›OKRs have two important parts: The objective you want to achieve and the key results, which are the way you measure achieving the objective.
How do I create a personal OKR? ›- 1 Choose your objectives. Take a moment to think about your mission. ...
- 2 Plan the key results. Now you'll need to break your goal into key results. ...
- 3 Track your progress. The final and most rewarding part of OKRs is tracking your progress.
Goals are the kind of long-term strategy or guideline. They explain what you want to achieve in your organization, and they are usually long-term and global. OKRs are short-term goals (often created quarterly) that are split into two parts: an Objective (the “what”) and Key Results (the “how”).
What are the five recommended categories for OKRs? ›OKRs provide your business with five important elements: focus, accountability, engagement, transparency and visibility.
What are leading indicators for OKRs? ›
Examples of leading indicators include user guide usage, calories taken per day and use of safety equipment. Lagging and leading indicators can be used together with the objective and key results (OKR), to determine the outcome of a business organization.
What verbs are used in OKRs? ›Since their purpose is to achieve a clear outcome, verbs such as “improve”, “increase”, “reduce”, “contribute”, “perform”, and “implement” are a perfect match to indicate how you will hit the target.
What common mistakes you should avoid when making OKRs? ›- Mistake #1: creating unachievable objectives. ...
- Mistake #2: failing to designate a DRI (directly responsible individual) ...
- Mistake #3: setting only top-down objectives. ...
- Mistake #4: authoring OKRs using vague language. ...
- Mistake #5: failing to track progress weekly.
The secret (or not-so-secret) ingredient is to define clearly what you are trying to do — within your company and within your product.
What is the 3 * 5 principle in OKRs? ›A typical OKR is made up of 3 to 5 high-level objectives, under which 3-5 key measurable results are listed. The said key results are measurable through a defined set of indicators or scores (usually between 0 and 1.0. The use of quantitative indicators allows an organization to check or measure progress.
What are the ABCS of OKR? ›Objectives and key results (OKR) is a framework for defining and tracking goals and their outcomes. It was first introduced by Andy Grove, the “Father of OKRs”, during his tenure at Intel, and it is now used by many technology giants such as Google, Twitter, LinkedIn, and Spotify.
What is an example of a key result? ›The key result aspect of a team OKR is where you get into the details, breaking down that big hairy objective into more tangible, realistic, measurable results. For example, if your objective is to “Increase sales volume”, then key result examples might be: 50% lift in new lead generation.
What are the best OKRs? ›Effective OKRs represent meaningful change, improvement and growth. They're our priorities for the next 30-90 days. Effective Objectives are meaningful, audacious, and inspiring. Effective Key Results are specific and timebound, aggressive and realistic, and measurable and verifiable.
What are the different types of OKR goals? ›There are two types of OKRs goal: committed OKRs and aspirational OKRs. Both committed and aspirational OKRs define different purposes and have separate methods to achieve them.
How do I run an OKR process? ›- Set the right environment. The right environment is one that you know your employees will be comfortable in. ...
- Start With a Review. ...
- Brainstorm Team OKRs. ...
- Present Drafts and Discuss Key Results. ...
- Write your first objectives and key results.
Which of the following is a common pitfall in implementing OKRs? ›
Pitfall #1: Lack of alignment across an individual, team, and company goals.
What is an example of a bad OKR? ›| Well-Written OKRs | Poor-Written OKRs |
|---|---|
| Objective: Reduce energy consumption by 20% | Objective: Save energy |
| Key Result: Implement energy-efficient lighting in all facilities | Key Result: Change the lights |
| Key Result: Increase the percentage of renewable energy used by 25% | Key Result: Use clean energy |
While the answer is the same across the board, there may be some nuances depending on an organization's size. Simplicity is always key. To capture the ambitions of your organization, you should have a maximum of three Objectives, each with 3-5 Key Results.
What is the difference between OKR and key metrics? ›OKR is the acronym for objective and key results—more specifically, an objective is tied to key results. OKR is a strategic framework, whereas KPIs are measurements that exist within a framework. OKR is a simplistic, black-and-white approach that uses specific metrics to track the achievement of a goal.
How many OKRs should a person have? ›We typically recommend setting a maximum of 3-5 OKRs per team per quarter. This is a maximum, not a minimum – it's perfectly appropriate to have only 1-2 OKRs. What matters most is that you don't pick a number and then let that dictate how many goals you need to achieve within the given timeframe.
How do you write an OKR product? ›To get the creative juices flowing, think about this formula when writing your Product OKRs: We will [Objective] as measured by [Key Results]. Keep in mind that Objectives answer the question “What do I want to achieve?” while Key Results answer the question “How do I know that the goal is achieved?”.
What is the best practice for setting OKRs in a company? ›3 Main Steps to Setting OKRs:
Define your overarching objectives—what you aim to accomplish. Set a time frame for reaching your objectives. List key results that will demonstrate that you've met each objective. Make them quantifiable, using numbers to make them measurable.
- Specific: I'm going to write a 60,000-word sci-fi novel.
- Measurable: I will finish writing 60,000 words in 6 months.
- Achievable: I will write 2,500 words per week.
- Relevant: I've always dreamed of becoming a professional writer.
Which three questions should you ask yourself to make a goal specific? Where should it be delivered? What do I want to accomplish? Who is involved?
Why not use OKR? ›OKRs work only when everyone from the top gets involved in the system. The team has to align from top to bottom. It will be challenging to perform. The top-level can't just design OKRs and implement them and then forget about it.
What words should key results not contain? ›
Key Result should not measure the output (number of emails, number of articles, etc.), but the outcome (revenue, increased referrals, client/team satisfaction, etc.). Controllable. As with Objectives, you need to have to be able to make an impact on the Key Results you set.
What are two of the most important things you can do in managing OKRs effectively? ›- Nail down 'Who, What and When' ...
- Identify whether OKRs are 'Committed, Aspirational or Learning' ...
- Come up with three to five key results per objective. ...
- Set ambitious OKRs. ...
- Make sure OKRs are specific. ...
- Commit to a very small number of OKRs. ...
- OKRs should be frequently reviewed.
Leading indicator examples include the Consumer Confidence Index, Purchasing Managers' Index, initial jobless claims, and average hours worked.
What are three examples of key performance indicators? ›- Gross Profit Margin (and %) Operating Profit Margin (and %)
- Net Profit Margin (and %) Operating Expense Ratio.
- Working Capital Ratio.
OKRs are a powerful tool for setting and measuring goals, but like all power tools, they can become dangerous in unskilled hands. When used in informed ways, they can improve focus and lift outcomes, but when mishandled, they can increase waste and inflict real damage upon the organizations that adopt them.
Do OKRs need to be measurable? ›OKRs at a glance:
Key results are measurable and should be easy to grade with a number (Google uses a scale of 0 – 1.0) OKRs are public so that everyone in the organization can see what others are working on.
A quarterly OKR cycle is ideally 3 months and can be approached in a step-by-step manner: At the beginning of every quarter, identify specific Objectives and the Key Results you'll use to monitor progress.
What is an example of a personal OKR? ›An example OKR
Train 5 days per week with 1 long run each week. Increase mileage by 5 miles per week. Drink at least 3 liters of water every day. Sleep at least 8 hours every night.
The OKR Formula
They can also be written as a statement: I will (Objective) as measured by (Key Results). For example, “I will fix the website for the vast majority of people as measured by 7 out of 10 people being able to get through, a 1-second response time, and a 1% error rate.”
It can help achieve mission and vision, aid in employee engagement, and bring to the surface the top priorities of a company. OKR's five key benefits include focus, alignment, commitment, tracking, and stretching — or as John Doerr likes to call them, “the five superpowers” of OKRs.
What are the 3 R's of goal-setting? ›
R = Rigorous, Realistic, and Results Focused (the 3 Rs).
A goal is not an activity—a goal makes clear what will be different as a result of achieving the goal.
OKRs (Objectives and Key Results) is a framework that helps a business define its goals, as well as a way to measure them. It's made up of two components: Objectives, which are specific and clearly defined goals, and Key Results, which is how the goal's progress is measured or monitored.
What is the difference between KPI and OKR? ›KPIs are used to measure performance but they don't tell you what needs to change or improve to drive the growth of those numbers. OKR is a quarterly goal-setting method that helps businesses improve performance and drive change. OKRs are used to decide what needs to be changed, fixed, or improved.
How do you present an OKR to a team? ›- Start with the why.
- Decide on the OKR cadence.
- Conduct an OKR presentation.
- Define your company's mission.
- Start with a pivot group.
- Assign basic rules.
- Conduct a strategic session with the team.
- Organize weekly/bi-weekly check-ins.
An example OKR
Train 5 days per week with 1 long run each week. Increase mileage by 5 miles per week. Drink at least 3 liters of water every day. Sleep at least 8 hours every night.
- Scheduling a meeting 📆
- Preparing the room 🏡
- Introducing the problem space ⛳️
- An ideas dump 💡
- Presenting and clustering 🎁
- Voting
- Prioritization matrix ⊹
- Stakeholder debrief 🗣
Effective OKRs represent meaningful change, improvement and growth. They're our priorities for the next 30-90 days. Effective Objectives are meaningful, audacious, and inspiring. Effective Key Results are specific and timebound, aggressive and realistic, and measurable and verifiable.
What are the different types of Key Results in OKRs? ›Your Key Results will usually fit into one of three categories: Inputs, Outputs & Outcomes. One technique we've found helpful is to be able to think of Key Results in each of these ways, then select the best one for your current needs.