Nacho starts by showing us that setting OKRs need not be stressful if they are connected to company strategy. He says that the OKR setting process becomes stressful if it is used to fill the gap created by lack of a previous alignment of strategy and opportunities.
With three steps, he says, we can go from strategy to defined Objectives and Key Results.
Use roadmap themes or strategy drivers as objectives
An easy and powerful approach to keep strategic communication consistent is to use the drivers, or strategic-roadmap themes, as objectives in the OKR framework, says Nacho. He runs through the example of a company focused on reducing operating costs using “decrease 20% the number of call center information calls” as the objective.
Group opportunities into objectives
This is a different approach. Nacho gives another example to show what he means – 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.
Select specific metrics
Nacho likes 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 the number of visitors by the conversion rate and average sell rate. Grow any of these figures, and revenue will increase. In turn, average sell rate is formed by multiplying the number of items in order and average price per item. He says: “We can continue breaking down metrics. KPI trees help us visualize this composition. To finalize 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.”
Read the original post: How to connect strategy with OKRs