Jenny opens by explaining how we are currently living through a tumultuous time of economic downturn. As product managers, we must find new ways of working no matter what the future brings, and how it will affect our users. OKRs are a great way to bridge all of your business ideas together, Jenny says, as you have a common barrier to success.
Where to begin with OKRs
Jenny says to start with KPIs. What things actually need to be built and maintained for the health of the business? You can form these by analysing your vision, purpose, strategic priorities, and strategic results. KPIs are usually department-focused and don’t allow cross-collaboration, which is where OKRs come in.
OKRs are all about growth, they have an element of stretch and are intended to drive cross-functional behaviour.
Balance what you measure
The challenging aspect of OKRs is having to balance every aspect that you measure. Jenny explains that you need at least two key results for each objective. For every qualitative measure, you need to balance it out with a quantitative measure.
The more you place attention on a single metric and a single KR, the more opportunities there are for corruption and error. Therefore, Jenny reiterates how important it is to balance each key objective with multiple key results.
Common OKR mistakes
Jenny lists some common mistakes when crafting OKRs
- Tying OKRs to compensation: conducting performance reviews based on whether or not you achieve your outcomes is a no-no
- Output-based KRs: OKRs should not be a reinterpretation of your roadmap tasklist
- Hard cascades: OKRs align, and teams have the opportunity to align to strategic parent-level OKRs
- Failing to trust: Cultivating trust happens when leaders set a clear direction, give people what they need to see things through and getting out of their way to get it done
- Doing too much: The idea with OKRs is to focus. Less is more
- Lack of executive sponsorship: Senior leaders must set the direction and the tone
Putting it all together
Wrapping it all together, Jenny uses the road trip analogy. First, you use our business strategy to figure out where you want to go, then use your OKRs as your GPS to figure out whether you’re on the right path, finally, use KPIs as your dashboard to check if everything else is okay along the way.
Jenny says to ask these four questions when crafting OKRs
- What will make a difference to our customers?
- What will make a difference to this business?
- What will make a difference to this team?
- What are the outcomes we want?
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