Everyone agrees that setting objectives and key results (OKRs) is a useful way to measure performance, drive team alignment and motivation, and track company progress. The real question is, how do you set them correctly? The process of properly establishing the right set of OKRs for your product team can be challenging.
There are many ways to set your goals, which makes it difficult to know which one is the best for you. Similarly, there are many ways to manage and measure them as well. In this blog post, we’ll walk you through an end-to-end guide on how to set, manage, and measure your OKRs as a Product Manager — all from the perspective of an agile coach with years of experience working with various teams in numerous companies.
Why use OKRs?
The first question to ask is why you’re using OKRs in the first place. While it’s true that OKRs have been shown to deliver value, you need to make sure that it’s the right fit for your company and the right fit for you as a Product Manager.
There are three main reasons why you should use OKRs if you haven’t already. Firstly, they drive consistency across teams and functions. Secondly, they ensure that all employees are held accountable and progress can be measured. Finally, they allow for collaboration and sharing of ideas across teams.
Step 1: Decide on a timeframe and measurement
The first step in creating effective OKRs is deciding on the timeframe and what you will be measuring. As a Product Manager, you’ll likely want to select a timeframe that matches your company’s product roadmap. This would be your ideal or aspirational roadmap. In most cases, the roadmap will consist of the next 12–18 months of product initiatives, product launches, and company goals.
You’ll want to select a timeframe that aligns with your company’s goals and supports your team’s product roadmap. The timeframe you select should be challenging, but realistic. In addition to deciding on a timeframe, you’ll also need to decide what you will be measuring.
While there are many ways to measure progress, you’ll want to select metrics that align with your company’s business objectives and support your product’s key metrics. This is where you’ll need to do some research and find out what information is most useful for your company. Remember, the metrics you select will likely change each time you set new OKRs.
Step 2: Decide on key product metrics
The second thing you’ll want to decide is which key product metrics you’ll be tracking for each initiative. There are many ways to decide which metrics to use, but it will largely depend on your company’s industry, your product’s lifecycle, and your team’s goals. For example, if you’re a B2B company, you’ll want to track lead generation and how many leads are being generated from each campaign.
If you’re a B2C company, you may want to track the growth of your user base and how many new users are signing up per month. You’ll want to select metrics that are quantifiable and provide enough direction to indicate success or failure. At the same time, the metrics you select should be strategic, flexible, understandable, and easy to track.
Step 3: Decide on key product usage metrics
The third thing you’ll want to decide is which key product usage metrics you’ll be tracking for each initiative. You should select metrics that evaluate the level of engagement of your customers and the effectiveness of your product. For example, if you’re a SaaS company, you’ll want to track the average number of times a user engages with your product per month and the average amount of time they spend on your product.
If you’re a media company, you may want to track the top 10 articles your users are reading and sharing the most. You’ll want to select metrics that are quantifiable and provide enough direction to indicate success or failure. At the same time, the metrics you select should be strategic, flexible, understandable, and easy to track.
Step 4: Decide on organizational change initiatives
The fourth thing you’ll want to decide is which organizational change initiatives you’ll be focusing on. Organizational change initiatives are intended to create positive change and help your business become more effective. For example, if you’re a B2B company, you may want to focus on generating more leads, improving the quality of leads, and closing more deals.
If you’re a B2C company, you may want to focus on increasing the number of users on your platform or improving the retention rate of those users. You’ll want to select organizational change initiatives that are strategic, meaningful, and important to your company. You’ll also want to select initiatives that can be tracked as progress toward achieving your OKRs.
Step 5: Conclusion
This brings us to the end of our ultimate guide to setting, managing, and measuring product OKRs. We hope that you’ve gained some insight into the importance of setting effective OKRs and have an idea of how to go about it. Remember, there is no one-size-fits-all approach to setting OKRs. The best approach is one that is tailored to your organization and goals.
