Setting objectives and key results (OKRs) helps product managers define what needs to be done to solve customer problems, as well as to measure and record success. Initiatives are then used to achieve the desired outcomes. A product leader needs to position themselves in the driver’s seat when orchestrating this. After all, it’s their responsibility to create, communicate, and deliver on the product strategy and ensure that all teams are aligned and moving in the right direction.
We’ve written previously about how OKRs are used to align your team around the same set of goals. However, there are a few points product managers need to be mindful of when implementing OKRs into their product strategy – especially those in high-level positions.
1- It’s an objective. It’s not simply a goal
An objective is an actionable target that clarifies the desired outcomes. A goal tends to focus more on measurable outputs or milestones. Product objectives contribute towards achieving wider company-led goals, and the connection between them would be outlined in the product strategy.
2- It’s a key result. It’s not a key performance indicator (KPI)
Key results focus on the direct outcome of specific activities (or initiatives) which can be measured and learned from. KPIs are more commonly used to measure the continued success or progress towards a defined performance measure, not an outcome-focused objective. A lagging KPI may well lead to a discussion to identify a future objective (complete with the key result) to improve it.
3- Initiatives are something different, too
An initiative describes the specific activities or projects the team is working on to influence the success of an OKR. Even if you identify what you need to achieve (the objective) based on the company strategy and determine what good looks like (the key result), you’re not going to get very far if you’re unable to clearly communicate the actions you plan to take in order to get there (the initiative).
Let’s use this as an example:
Objective: Improve your overall health to avoid illness or injury
Key result: Lose 15 pounds by the end of 2020
Initiative: Exercise for more than 30 minutes at least 4 times per week
4- OKRs don’t always have to cascade
OKRs should not be put in place to control teams and trickle-down keeping everyone in check. They are used to unify teams, stretch yourselves to achieve greater things, and ensure that everyone is moving towards the same destination. Specific product objectives do not need to be entirely derived from those at the group level. It is the product manager’s job to make sure their OKRs are directly linked to the outcomes their products are seeking to achieve and not last week’s departmental leadership meeting. ProdPad can help you avoid this issue through the product and portfolio canvases. The portfolio canvas establishes the vision, high-level strategy, and approach to achieving the objectives for the entire portfolio of products. Some, but not necessarily all, of the product objectives should align with and help achieve those portfolio-level objectives.
5- Don’t lose sleep over the stretch target
Objectives are there to point you in the direction you aspire to go down. If you hit 70% of your stretch target then that should be applauded. You’re trying out something that hasn’t been done before. As long as you are testing and making informed decisions a reduced achievement won’t be massively detrimental. Be sure to record the outcomes of each OKR so that you can learn and improve. This will help you reduce risk in the future and operate on a more cost-effective basis.
6- Avoid gamifying objectives and key results
It’s important to remember that OKRs are not there as targets for the individuals in your teams. OKRs measure the overall success of the product’s performance. As a leader, it is not best practice to start trying to hide targets under your OKRs. This will stifle innovation and growth as team members will end up gaming the system to improve their individual performance. One great way to combat this is to build in counter-metrics that pair a quality metric with the quantitative key result measure.
When done well, with buy-in across the entire organization, OKRs can be a valuable tool to increase alignment, foster innovation, and propel your teams to greater success. Looking to implement OKRs into your own organization? Book yourself in for a free demo where our product experts will be happy to help.
Wes Galliher is the US Business Lead at ProdPad. Having spent most of his 10-year career either as a product manager or a consultant to product teams, he can empathize with both product managers themselves and the broader organizational challenges they often experience. He is passionate about teaching and supporting problem-driven approaches that achieve outcomes for both end users and business.