In this exclusive Prioritised member AMA, Jeff Gothelf, co-author of Lean UX and Sense & Respond, provides insights on objectives and key results (OKRs). He also discusses the biggest challenges that come along with adopting this business model.
Watch the recording in its entirety or read on for the highlights, including:
- Creating impactful OKRs for product teams
- Timing OKRs to perfection
- Using OKRs in a B2B context
- Integrating OKRs in large organisations
- Levels and integration within OKRs
- Proving the value of OKRs
Creating impactful OKRs for product teams
A good OKR is fundamentally a metric that is set to impact customers that use your product. One of the common issues with creating effective OKRs is finding a measure that shows you are delivering value to everyday customers. Your job as a product leader is to ask what your customers will be doing differently once that change happens, and once you have the answer to those questions, you can create an OKR from that. Jeff says, ‘What do we expect to see when you make a product change or introduce a new feature? Use that as a conversation starter to create a real definition of success.” Doing this results in creating the best possible outcomes and answering the right questions.
Timing OKRs to perfection
Setting quarterly and annual OKRs are best, Jeff recommends. Shorter cycles in what you’re doing today is a great place to start. A quarter should be plenty of time to make some changes. However, for other changes, you may need more time. Create several short to long term strategic goals that vary per idea. Jeff recommends using this concept:
Short cycles allow us to learn and adjust because we’re less committed to ideas due to them being created and tracked over a short period. It provides more of an opportunity to learn and change the course of new product features. Match the time of OKRs to the targets set in your business, but challenge yourself to experiment on more of a granular level to increase the likelihood of making the most impact possible.
The goals that you set for teams should reflect the company mission. There will be some teams tasked with being innovative, and teams that are creatively maintaining the product.
Using OKRs in a B2B context
When using OKRs in a B2B context, it’s important to remember that humans are behind every business. Regardless of the company type, you’re still providing products for people and have a target audience. You can therefore develop personas around that information.
There’s an opportunity to build a conversation with the humans that you’re selling to. “There are going to be fewer people to talk to in comparison to B2C. You have to account for this and be aware that you’re working with a smaller pool of individuals.”
Integrating OKRs in large organisations
Asked how to integrate this framework into a large business with several objectives and results, Jeff explains that teams are imperative to maximising its impact. Leaders and managers have a key role to play to “see the forest from the trees”. What becomes powerful is to take several teams and give them the same results to achieve. “Doing so reduces the complexity of the organisation, optimizes teams, and reduces the tension between individuals,” Combining these teams increases effective cross-collaboration and improves business culture. It builds a shared understanding of why you’re pushing for a specific initiative.
Levels and integration within OKRs
Jeff believes that setting the right level for OKRs is crucial. You need to set bars that product teams can influence to track feature changes and customer behaviour.
If they’re set for individuals, there are so many other factors that contribute to that. Your work alone can’t directly be correlated to a change in sales or revenue. Otherwise, you’re setting yourself up for failure. The key is to set a metric that you as a team can influence. An OKR is a team goal. You can set them for your personal life and development goals, but for product goals having multiple individuals working towards a single OKR is key. Stick to team-level goals, Jeff believes.
A common mistake is for organisations to tie bonuses to key results. In some cases, this means that they set the bar low and take fewer risks to receive a higher bonus package. It’s important to separate OKRs from individual performance results. “If these two are combined, then we are not telling teams what and how to build,” he says. It’s the behaviour exhibited through product discovery that Jeff believes should be the performance evaluator, not the results of a product. “We have to decouple it, have conversations with HR leaders to change the ideology around these two models.”
Proving the value of OKRs
When asked how to showcase the true value of OKRs, Jeff says that if the product is getting better, then the framework is working—it’s a customer-centric goal-setting metric. You must always be looking from the outside, see how people are behaving, and find ways to make those users more successful in using your product. “If OKRs are working, you’re making customers and users more successful, if you’re making them more successful, then the business is improving with this framework.” he closes.
Discover more content on OKRs. For even more content on a range of product management topics, see our Content A-Z.