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How You Should Set the OKRs for Product Management

3 Mar 20224 mins read
Tomas Prochazka
How You Should Set the OKRs for Product Management
By Tomas Prochazka
CONTENTS

Do you ever find yourself setting off down one path — ticking off tasks and putting in the hours — only to have the project change direction? It often happens when teams think they’re collaborating effectively, but with little in the way of shared aims. 

Large, distributed product teams can fall victim all the more easily.

It’s here that OKRs come in so handy. In this article, we’ll tackle your burning OKR questions: what does OKR mean? How does it differ from a KPI? And how can OKRs help performance management in the world of product?

Keep on reading to find out.

OKRs

What is OKR?

OKR is an acronym for “Objectives and Key Results”: a goal-setting framework that helps teams establish a number of achievable (but often challenging) objectives, each with measurable, verifiable results. 

The OKR process can be applied across any organization, giving anyone from C-suite execs to sales and, you guessed it, product management teams, new goals to strive for. OKRs ensure that objectives become tangible targets with provable outcomes instead of vague ambitions with no clear start or endpoint.

For example, clothing brand Allbirds created an OKR plan to reinforce their sustainability goals and make them measurable. They listed multiple Key Results to aim for, including “supply chain and shipping infrastructure 100% zero waste” and “25% of material is compostable”. 

A little closer to home in a product management context, though, product owners or managers may choose to create an OKR for reducing churn rate through multiple steps, such as interviewing customers to discover what may prompt them to try an alternative.

Who created OKR?

Intel’s Andy Grove developed this methodology (originally known as Intel Management by Objectives: iMBOs), and author John Doerr broke the process down in his 2017 book ‘Measure What Matters’. Major brands like Netflix and Google have adopted the OKR approach over the years — so you know you’re in good company.

How many objectives should a product have?

It’s crucial that product teams plan objectives and key results carefully to avoid spreading themselves too thin. A simple, concise OKR is best for any product, even in bigger companies working on a major product launch. 

Generally, we should aim to keep a product’s OKR to between three and five objectives with a similar number of key results each. All of this information should cover no more than two pages, but ideally one for optimal conciseness. Create a list of achievable objectives consisting of just one sentence each: keep them focused on actions to avoid any confusion. 

Good objectives will guide an entire team throughout the product design and development process. Key results explain how to achieve objectives in a measurable way within a fixed timeframe.

OKRs meeting two men in a office

What’s the difference between OKR and KPI?

If your head is spinning with all the acronyms and phrases used in product environments, you wouldn’t be alone. So let’s settle an argument once and for all: some people may use OKRs and KPIs interchangeably, but wouldn’t be quite right. 

  • The OKR methodology will help you set ambitious but achievable goals to drive team members to achieve success via a number of clear steps. You can use it to boost performance and initiate valuable changes in product management.

  • Key Performance Indicators (KPIs) enable managers to measure performance over time (e.g. monthly, quarterly) without offering information on how to improve those results. 

Analyzing KPIs helps product teams determine what aspects of their work need to be changed and improved to cultivate better results. Once they have their objectives, they can decide on Key Results and build an OKR. 

4 examples of OKRs for modern teams

Product owners and managers can use OKRs to help teams grow, perform to a higher standard, and deliver a more satisfying customer experience.

But getting started can be difficult if you’re new to OKRs in a product environment. That’s why we’ll look at four examples below. Once reading these, you’ll be ready to get started with an OKR framework of your own.

OKRs setting

Example #1- Better product experience

Objective: 

Provide customers with a better product experience. 

Key results:

  • Customers flag no more than three critical bugs in each sprint.

  • Delivered story points remain at current level (e.g. 50) in each sprint or increase. 

Example #2 - Convert more website visitors

Objective: 

Improve the product release process

Key Results:

  • Reduce bugs found after the release by 30%

  • Reduce the sign-up flow churn from 35% to 10%

  • Improve the App Store rating of the new version from 4.0 to 4.5

Example #3 - Create a smoother process for scrum teams

Objective: 

Create a smoother process for scrum teams.

Key Results:

  • Deliver a sprint goal 70% of the time. 

  • Increase story points delivered in each sprint to a fixed amount (e.g. 50). 

  • Add no new stories to a sprint once it’s underway to reduce stress levels and maintain focus.

Example #4 - Provide customers with more value with minimal investment

Objective: 

Provide customers with more value with minimal investment.

Key Results:

  • Boost Feature Fit Index score to a set figure. 

  • Quality of features over quantity of releases (don’t fall into the ‘feature factory’ trap!)

  • All features to have a minimum viable product (MVP) form and one iteration (minimum).

A template you can use for your own OKRs is “We will [objective] as measured by [specific key results]”.

OK… go!

As we’ve seen, setting OKRs can add structure, alignment, and team effectiveness to any team.

Why not try it for yourself today?

And for more product management insights and ways of working, the airfocus blog is always available.

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