OKRs are a “strategy in a nutshell” for individual Product Teams, helping connect short- and mid-term priorities to the overarching WHY.”
– Tim Herbig, Product Management Coach and Consultant
Done right, Objectives (O) and Key Results (KR) implementation in a product team:
- aligns the efforts of the team to other departments;
- connects product development to wider business goals; and
- ensures the focus for the team is the impact of the product, not just its existence.
For some departments, OKRs are naturally influenced by company-level OKRs. For example, if a company has a particular growth target, sales can align their acquisition rate or average deal size objective accordingly.
For product development, however, this process can be harder. It's important to be aware of the common pitfalls that prevent you from reaping the real benefit of OKRs.
1. Your OKRs aren’t product-related
It’s very easy to focus on what your department needs to achieve when setting OKRs. A department-focused objective might be:
- Push out an upgrade, on time, every quarter.
This sounds like you’re focusing on product improvement, but there’s no interrogation of why. How does an undefined upgrade being on time help your business grow?
The focus should be on what the product needs to achieve to support the business OKRs. This in turn sets the direction and priority for the department.
If the company objective was, ‘increase customer retention by 25%’, a good, cascaded product OKR would be:
- Create a better user interface (objective).
- 10% increase in average user time (key result).
- 15% decrease in inactive users (key result).
2. Your OKRs and your roadmap are interchangeable
A roadmap brings focus to teams working in product management. It provides a clear timeline for updating existing products and creating new ones.
However, some companies make the mistake of thinking that their roadmap, or parts of it, constitute OKRs. For example, a team might consider ’add reporting function by January 20th’ an OKR.
The mistake here is focusing on output rather than the outcome. You need to interrogate the ‘why’ of your objective and think about what change that outcome will affect.
Say a company objective is to acquire 10 new enterprise clients. A powerful supporting product objective could be:
- ‘Release 3 new functionalities to support enterprise clients’
Notice, this objective is less restrictive. It encourages teams to be creative in their approach to product development and innovation. Part of the plan to achieve that objective could be ‘add reporting function by January 20th’, but that is not the objective driving the team.
3. You’re creating your product OKRs in isolation
Allbirds is a sustainable shoe company that has OKRs (which they call KIWIs) deeply embedded into its processes and culture. The benefit product innovation sees from this is that it’s much easier to get support from other teams to progress their work and achieve their objectives.
In order for everyone to work towards the same top-level KIWIs, the product design team and the development team works closely with the sustainability team. As engineer Winston Kim says, 'our teams are nice and cozy, just like our shoes'.
It’s important to understand interdependencies when setting OKRs and ensure cross-functional alignment with other departments. How your product supports business OKRs will need input from customer support. And marketing will need to be aligned with your product objectives to make the most of everyone’s efforts.
OKRs, done right, help everyone across the business speak the same language and prevent silos of activity. After all, the whole can be greater than the sum of its parts, when it works as one.