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Product Management

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Everything wrong with the product management job market. And how to fix it

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Advice for internal product managers

Nacho Bassino has been leading product teams for over ten years in different companies and industries, currently as Director of Product at XING, the social network for business professionals. Before XING, Nacho held other leadership positions as CPO at Bestday, Head of Product Development at Almundo, and Director of Product at Despegar. He is also passionate about sharing experiences and helping the product community. He organized Product Tank in Buenos Aires and Cancún and gave product management classes in different institutions. Most recently, he wrote Product Direction, a book that addresses how to create a winning product strategy and align its execution through strategic roadmaps and OKRs.

Nacho Bassino

Every three months the dreaded OKR setting process begins. People at different levels in the organization (especially large ones) start working around the clock to find the best opportunities for the next quarter, find the right ambition levels, deal with dependencies, balance top-down vs bottom-up requests, and a myriad of activities that turns this goal-setting period in a stressful moment for everyone.
But… Does it need to be a stressful period?
Definitely not. When we run into this situation it is because we are filling the gap created by lack of a previous alignment of strategy and opportunities. If every quarter I can go in any direction, it is logical that teams will start exploring multiple (and likely unaligned) alternatives, creating more tension in the definition process. 
This is a signal in companies that don’t have a strategy or fail to connect it to OKRs and team execution. 
It doesn’t need to be this way. 
While we want the healthy tension of discussing how far we can go with our Key Result, or debating the effects of different alternatives, having previously set the direction will help teams understand what problems they should focus on, generating less friction between top-down and bottom-up alternatives. Moreover, teams aligned in the same direction will have fewer “dependencies” debates and will generate impacts on top of each other. For example, the results of one team adding new payment options will increase checkout conversion, on top of another team improving the checkout UX to minimize friction (error messages, form layout, copy, etcetera). This will maximize success when solving problems related to the same theme (like “checkout experience” in this example). 
<h2>How can we put it into practice?</h2>
As the title suggests, I’ll assume that <a href="https://medium.com/swlh/rocking-at-product-strategy-3-steps-and-10-tools-to-succeed-where-most-companies-fail-98e64246bdc" target="_blank" rel="noopener">you have a product strategy</a>, and I’ll focus on how to use it to direct objectives creation and align multiple teams. 
Through <a href="https://www.mindtheproduct.com/finding-a-framework-for-strategy-insights/" target="_blank" rel="noopener">insights</a> and the definition of your strategic positioning, you have selected what are the problems and opportunities you must tackle to advance towards your vision and create solid strategic advantages.
<figure id="attachment_25947" aria-describedby="caption-attachment-25947" style="width: 1600px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" class="wp-image-25947 size-full" src="https://www.mindtheproduct.com/wp-content/uploads/2021/11/fe13612f-6a46-4d05-b63a-05348e056d5c_Untitled.jpg" alt="" width="1600" height="468" srcset="https://www.mindtheproduct.com/wp-content/uploads/2021/11/fe13612f-6a46-4d05-b63a-05348e056d5c_Untitled.jpg 1600w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/fe13612f-6a46-4d05-b63a-05348e056d5c_Untitled-300x88.jpg 300w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/fe13612f-6a46-4d05-b63a-05348e056d5c_Untitled-1024x300.jpg 1024w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/fe13612f-6a46-4d05-b63a-05348e056d5c_Untitled-768x225.jpg 768w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/fe13612f-6a46-4d05-b63a-05348e056d5c_Untitled-1536x449.jpg 1536w" sizes="(max-width: 1600px) 100vw, 1600px" /><figcaption id="caption-attachment-25947" class="wp-caption-text">The first step to creating aligned OKRs is to use strategy and Direction to choose the right problems. (Source: Product Direction book)</figcaption></figure>
Now with three steps, we can go from strategy to defined Objectives and Key Results. 
<h2>Use roadmap themes or strategy drivers as objectives</h2>
An easy and powerful approach to keep strategic communication consistent is to use the drivers, or strategic-roadmap themes, as our “Objectives” in the OKR framework.
This may sound highly dependent on how you created your strategy, but most times strategies have this high-level focus area that can be used to express goals. 
Another way to “find” these focus opportunities or, even better, make them a bit more concrete, is to use the top part of an <a href="https://www.producttalk.org/2016/08/opportunity-solution-tree/">opportunity solution tree</a> to explore problems and opportunities related to our strategic goal.
Let’s see the following example for a company focusing on reducing operating costs, using the strategic driver “Decrease 20% the number of call center information calls” as our Objective (see figure below).
<figure id="attachment_25946" aria-describedby="caption-attachment-25946" style="width: 1156px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" class="wp-image-25946 size-full" src="https://www.mindtheproduct.com/wp-content/uploads/2021/11/c5373820-27b6-498e-be02-bdd4703e78a5_Untitled.png" alt="" width="1156" height="651" srcset="https://www.mindtheproduct.com/wp-content/uploads/2021/11/c5373820-27b6-498e-be02-bdd4703e78a5_Untitled.png 1156w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/c5373820-27b6-498e-be02-bdd4703e78a5_Untitled-300x169.png 300w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/c5373820-27b6-498e-be02-bdd4703e78a5_Untitled-1024x577.png 1024w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/c5373820-27b6-498e-be02-bdd4703e78a5_Untitled-768x432.png 768w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/c5373820-27b6-498e-be02-bdd4703e78a5_Untitled-285x160.png 285w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/c5373820-27b6-498e-be02-bdd4703e78a5_Untitled-570x320.png 570w" sizes="(max-width: 1156px) 100vw, 1156px" /><figcaption id="caption-attachment-25946" class="wp-caption-text">Example of the top part of opportunity solution tree, with 3 levels of opportunities and its relation to objectives and key results</figcaption></figure>
Continuing our example, we can use go down one level in the tree, and use the third level opportunities as input for our key results: “Respond to 30% of calls with an automated information solution” (see figure above).
<h2>Grouping opportunities into objectives</h2>
While the above example was straightforward, depending on how intertwined your strategy is, you may decide to use a different approach, grouping opportunities under objectives with a different logic.
Using an exaggerated example, let’s consider a movie streaming service with a strategic driver related to geographic expansion and another to capture fans of horror films, a different niche from the ones currently served. You can select opportunities from both themes and combine them into an “Increase users” objective (see figure below). You will still use KRs similarly, but you can group opportunities of different strategic drivers into a newly created objective measuring how you increase your user base with different paths.
<img loading="lazy" decoding="async" class="aligncenter size-full wp-image-25945" src="https://www.mindtheproduct.com/wp-content/uploads/2021/11/dc4982d5-0c7e-49a1-ab77-44900cf98345_Untitled.png" alt="" width="826" height="616" srcset="https://www.mindtheproduct.com/wp-content/uploads/2021/11/dc4982d5-0c7e-49a1-ab77-44900cf98345_Untitled.png 826w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/dc4982d5-0c7e-49a1-ab77-44900cf98345_Untitled-300x224.png 300w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/dc4982d5-0c7e-49a1-ab77-44900cf98345_Untitled-768x573.png 768w" sizes="(max-width: 826px) 100vw, 826px" />
<h2>Select specific metrics</h2>
Selecting a metric for the Key Result may be less controversial. One of the topics I like to focus on to achieve high-quality OKRs is to explore which “sub-metric” is the one that will be affected by the opportunity you are pursuing, instead of simply using one high-level product KPI. For example, Revenue in e-commerce is a result of multiplying Number of Visitors by Conversion Rate and Average Sell Rate. Grow any of these figures, and revenue will increase. In turn, Average Sell Rate is formed by multiplying Number of items in order and Average price per item. Conversion Rate is composed of multiple step-by-step conversion rates in the funnel. And we can continue breaking down metrics. KPI trees help us visualize this composition.
<figure id="attachment_25949" aria-describedby="caption-attachment-25949" style="width: 1350px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" class="wp-image-25949 size-full" src="https://www.mindtheproduct.com/wp-content/uploads/2021/11/957dca85-66cb-4e03-a8bc-8f252ad5cbe8_Untitled.png" alt="" width="1350" height="1500" srcset="https://www.mindtheproduct.com/wp-content/uploads/2021/11/957dca85-66cb-4e03-a8bc-8f252ad5cbe8_Untitled.png 1350w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/957dca85-66cb-4e03-a8bc-8f252ad5cbe8_Untitled-270x300.png 270w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/957dca85-66cb-4e03-a8bc-8f252ad5cbe8_Untitled-922x1024.png 922w, https://www.mindtheproduct.com/wp-content/uploads/2021/11/957dca85-66cb-4e03-a8bc-8f252ad5cbe8_Untitled-768x853.png 768w" sizes="(max-width: 1350px) 100vw, 1350px" /><figcaption id="caption-attachment-25949" class="wp-caption-text">Part of a KPI tree for e-commerce products.</figcaption></figure>
Read this post by Emily Tate on <a href="https://www.mindtheproduct.com/the-importance-of-metrics-maturity-for-evidence-driven-teams/" target="_blank" rel="noopener">The importance of metrics maturity for evidence-driven teams.</a>
So to finalize the stress-free OKR creation, teams should make sure they are using the key result that is the most specific to the problem they are trying to solve. For example, suppose you are improving the search results page’s sorting algorithm in this e-commerce platform. In that case, Conversion Rate will be the ultimate desired outcome, but “Click rate in top 3 positions” is a more precise indicator of the problem the team is trying to solve.
<a href="https://www.mindtheproduct.com/create-product-strategy-nacho-bassino/" target="_blank" rel="noopener">Listen to this podcast on How to create a product strategy with Nacho Bassino.</a>
It may be worth saying that finding the Key Result may also happen by detecting an opportunity that impacts a lower level metric, that we can then match with a higher level result. For example, if during discovery we identify a low number of users clicking on the first positions of our search results page, we have the opportunity to improve the search algorithm and impact the “Click rate in top 3 positions.” With the KPI tree, we can analyze all indicators and how they link to the company’s strategic goals.
As usual, there is no magic formula or process, but I hope you find part of these steps applicable in your situation and you can reduce the stress of your next OKR cycle!
This article is based on Part III of Product Direction, a book that describes tools and a practical approach to go through the creation of a Product Strategy, a Strategic Roadmap, and OKRs, and how to navigate the critical links between each of them to achieve success at scale.
<a href="https://www.mindtheproduct.com/category/okrs/" target="_blank" rel="noopener">Explore more OKR content</a>

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