Product managers are versatile thinkers by nature. One minute you might be discussing nitty gritty code issues with engineers and the next you’re discussing the desires of your customer base.
You’re responsible for a productive harmony among the individuals in your cross-functional team. It helps to have a common language to frame common goals, and a structure that works well for everyone.
This is the beauty of OKRs: Objectives and Key Results. In this explainer, we'll lay the fundamental facts about OKRs, how they're made, and how you can use them in any business to aim for moonshots.
The first OKR structure was created in the 1970s by former Intel CEO Andy Grove, but most people know about it because of modern Silicon Valley. Grove taught OKR strategy to investor John Doerr, who brought the idea to a one-year-old startup called Google.
The list of tech titans that have credited OKR with their rise includes LinkedIn and Zynga.The tools and strategies that made these companies prosper are at their core very simple and available to you.
The Objective and Key Results (OKR) methodology is a collaborative, goal-setting framework that helps teams and organizations reach their goals through identifiable and measurable results.
OKRs are composed of two main components:
Objectives
The objective is what you're trying to accomplish. It's a qualitative, aspirational statement.
Every OKR has one objective, such as…
Objectives are broad for a reason: they encourage your team to dream. Specific outcomes are the realm of key results.
Key Results (KRs)
The key results are specific ways that you'll measure whether you achieve an objective.
A key result must be quantifiable and verifiable – no room for ambiguity. An OKR has numerous KRs – we recommend at least 3 per OKR.
Examples of Key Results....
The key results, like the objectives, are supposed to be reasonable but ambitious for your team. As we’ll discuss below, you want to set OKRs that you can achieve, but not so easy that you always achieve them 100%. The goal is to always be pushing your team to the limit of its ability.
A lot of businesses use roadmaps to ship and update products on a steady timeline, and it's great for that. But this focus on output, rather than outcome, can create a short-sighted vision for your work.
OKRs, by contracts, are outcome focused. The outcome is the change that results from the work you put out. It’s not about the latest product update – it’s about how that update will help make you into the company you want to be.
Key Performance Indicators are useful in their specificity, but they’re not often tied to broader business goals. It's like setting key result goals without over-arching missions to guide them.
A product team, for example, might aim to decrease latency with certain software tools. This is an admirable target, but how does it connect to larger business goals? OKR, by contrast, builds those connections into the earliest planning stages.
The best OKRs are those that improve people's focus, creativity, and productivity. It’s worth repeating: objectives should be actionable, time-bound, and ambitious. Key results should be clear and quantifiable.
We caution people against taking on too many OKRs at once. Too many challenges can spread your attention and time too thin. In a given business quarter, we recommend no more than 3 objectives. For each objective, we recommend 3 to 5 key results.
"We will __(Objective)__ as measured by __(these Key Results)__.
The open-ended nature of OKRs is one reason why they can be adapted to any department in a business. Product management is no different. Here are some examples from different parts of a team’s work.
Identifying user needs
Objective: Understand user needs and desires
Design + Development
Objective: Create an irresistible interface
Product Release
Objective: Users are our un-official marketing team
User behavior
Objective: Users empowered to solve their own problems
Internal operations
Objective: Better team meetings
OKR is more than a chart containing objectives and key results – it's a culture and a process. Broadly speaking, here are the stages of that process.
OKR Rollout
At the very beginning, when those charts with objectives and key results really are the focus. Everyone should be involved in this process, from the c-suite executives to the freshly hired junior admin team. C-suite might define the larger company mission, but individual teams will be responsible for designing their own OKRs within this mission.
Action Plans
Once the OKRs are set, individual teams hash out plans for achieving the Key Results. This is a process of individual design and collaboration, so that every person has a plan that makes sense to them. With these action plans complete, everybody can get to work.
Check-Ins
Businesses often set quarterly OKRs (though you can choose any timeline). In order to keep the OKRs in motion, it's important to regularly check in on everyone's progress. This is an opportunity for assessing unexpected challenges and circumstances, coming up with creative solutions, and even revising key results within an OKR as needed. Tracking progress in a central location is also helpful.
Score + Reflection
No matter how well your team performs, analysis and reflection are necessary at the end of each OKR period. This is an opportunity to see how OKR performance might reflect the need for organizational changes. It's also a chance to revise the OKR process for success in the next round.
Yes, OKRs enable ambitious growth, self-directed innovation, and the occasional jaw-dropping moonshot. But at the end of the day, it's not the OKRs doing all of that – it's your team that's making it happen.
OKRs simply set you up for success. Here are some ways they affect change in your company culture.
Sharper Focus
Priorities are made clear when you hash out what the objectives really are. And the intentionally grand, not-quite-achievable nature of OKR objectives builds ambition into every quarter.
Collaboration
Outcome-focused goal achievement requires (and encourages) a diversity of ideas and skills sets. Calling on different people's insights creates a more dynamic workplace environment, boosting morale. Since OKRs are applied to any level of a business, from the micro to macro scale, collaboration takes many different forms.
Agility
Companies love agile project management because it gets results without getting bogged down in the notions of how things ought to be done. OKRs are perfectly suited to this style: methods for achievement are never predetermined and the key results are always open to revision at any stage in the process.
Accountability
People are setting their own goals and deciding how they'd like to achieve them. This promotes accountability in the most positive sense by promoting individual ownership over the work. Quantifiable key results also provide people with very clear goals to aim for, day by day.
Due to the open-ended nature of OKRs, there are a myriad of ways to implement them. Here are some suggestions for making the process simpler, more effective, and satisfying for everyone involved.
Cascade Sparingly
Company-level OKRs provide a great initial guide for all of the teams as they begin the process – just don't overdo it. It's tempting to cascade objectives from the very top to the very bottom (and it looks cool on charts). But cascading is by nature a top-down process, and OKRs are most effective when built from the bottom-up.
Welcome Input From Everyone
From the very first meeting with your product team, make clear the value of everyone contributing. This will serve your overall mission in two big ways. First, it lays the groundwork for building enthusiasm and a sense of shared purpose. Secondly, the goal here is ambitious change and that requires as many good ideas as you can possibly find.
Check In Regularly
We've all had the experience of a business quarter magically slipping by in the blink of an eye. OKRs are often built on quarterly (or even monthly) timelines, so every day is important. We're big believers in weekly check-ins for OKR teams. They don't have to be exhaustive, dramatic, hours-long affairs. It's more about making space for people to really think about the OKR at hand.
Stay Transparent
One reason why Google doesn't tie OKR performance to staff compensation is that they want the process to be as clear-eyed and accurate as possible. Clear communication is essential to actually getting things done. Create a space where people can post regular updates about progress, challenges, and anxieties.
Keep It Streamlined
The people on your team are already busy. One of the best things you can do for them (and yourself) is to make OKR participation as easy, efficient, and painless as possible.
Create shared spaces where OKRs are easily referenced. Make status updates simple. Prevent discussions from dragging on. The sooner you can track everyone's status, the better prepared you'll be to leverage success or pivot to new approaches.
The genius of OKR is its ability to keep a person’s focus on daily improvement and big-picture dreams at the same time. It does this with a very simple, formulaic set of objectives and key results.
The simplicity of the format lends itself to each unique role on a product management team. Engineers and marketing folks with radically different world-views can share common language in an OKR framework and design individual plans that play to everyone’s strengths. OKRs are built from the bottom-up. Meaning: the people who are going to put these plans into action are the ones writing them too.
Much more than a simple goal-setting worksheet, OKR is an ongoing process, one that teams usually set up on quarterly timelines. By promoting regular engagement, collaboration, and open communication around OKRs, you can integrate them into your established product management team culture.
The daily, weekly, and monthly work of tracking, reviewing, and revising OKRs is where the real work begins. A streamlined OKR space makes this work more efficient and more fun for your team to engage. Ready to try it out? Consider using Koan as you roll out your OKRs with your teams.
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