Combining OKR and Product Management

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Working in product development, it’s easy these days to get lost in frameworks. Whether it’s about building products or entire organizations.

And while I have become more cautious about introducing new frameworks to my work the work of teams I’m leading, some combinations stuck with me.
For example the Auftragsklärung format (or: mission briefing after its inventor Stephen Bungay). But when I took over iridion at the end of last year, I was looking for something more detached from the product development and instead focussed on company alignment.
After reading the excellent book ‘Radical Focus’ by Christina Wodtke, I decided to implement Objectives and Key Results (OKR).

I have heard opinions that OKR and formats like other alignment tools (whether its Auftragsklärung or Intermission) would contradict each other. But at this point, I have also received requests from fellow product people wondering how multiple formats across various strategic levels could play together.

So, here’s how we organize our work at iridion (below the levels of our overall mission, vision, and strategy):

Combining OKR and Product Management

We start with the OKRs, settling on a maximum of 3 company level Objectives (equalling ‘themes’). They are documented in a Google Sheet, and the progress is re-visited every week.

The various paths to achieve the desired results get discussed among the responsible persons of a domain (e.g., product, product marketing, sales, etc.).
The potential solutions are outlined as epics and follow a lightweight mission briefing structure for developing a shared understanding. We look at the context, the intent, the key implied tasks, potential boundaries and measures of success.
Epics can transition through five states, which are reflected in our Epic Priority Board:

  • Backlog – Subject for further discussions
  • Committed for Quarter – Matching our OKR focus theme
  • In progress – Discovery & Delivery
  • Done – Core scope has been shipped
  • Outcome achieved/failed – Measuring if we actually achieved our goals and not just pushed something out the door.

While there indeed is an overlap between these two formats, we found that the space of elaborating on, e.g., market dynamics and user feedback, as well as defining specific boundaries helped to prioritize and plan the work.

Beyond that, we follow a two-week SCRUM cycle and as many direct user interactions as possible to validate new assumptions or check-in on feature usability.

While we certainly didn’t re-invent the wheel and are by no means at the end of our process improvement, this currently works quite well for us. Let’s see where we end up in 3 to 6 months.

A typical discussion around OKR in product management evolves around the ambition level when setting goals and how high to aim for works best for committing on it as the Product Owner and getting the (Scrum) team on board.
As you may know, the procedure of setting goals which are entirely out of reach (and where achieving 70% is the maximum success rate) has its origins in the OKR methodology which has mainly been shaped by Google after originating from Intel.

So, when I was recapping our discussion, I revisited the best source around OKRs in product development and took some time to dig into the topic.
While there are a lot of valuable details in the re: work guide by Google, I wanted to highlight some of them, in particular, to help you establishing OKRs in product development:

  • Creating unachievable goals is tricky as it could be seen as setting a team up for failure.
  • Moreover, when aiming high, even failed goals tend to result in substantial advancements.
  • The key is communicating the nature of stretch goals and what are the thresholds for success.
  • Google likes to set OKRs such that success means achieving 70% of the objectives, while fully reaching them is considered extraordinary performance.
  • OKRs should be public within an organization so that every employee knows the organizational objectives and metrics for success.
  • Pick just three to five objectives – more can lead to over-extended teams and diffusion of effort.
  • Avoid expressions that don’t push for new achievements, e.g., “keep hiring,” “maintain market position,” “continue doing X.”
  • Use expressions that convey endpoints and states, e.g., “climb the mountain,” “eat five pies,” “ship feature Y.”
  • Determine around three key results per objective.
  • Key results express measurable milestones which, if achieved, will directly advance the objective.
  • Key results should describe outcomes, not activities.
  • If the KRs include words like “consult,” “help,” “analyze,” “participate,” they’re describing activities.
  • Instead, describe the impact of these activities, e.g., “publish customer service satisfaction levels by March 7th” rather than “assess customer service satisfaction.”
  • Measurable milestones should include evidence of completion, and this evidence should be available, credible, and easily discoverable.
  • Use this Scorecard to look back at your OKRs

Example OKRs for Product Managers

Objective: Grow user base within the new customer segment ‘Online Marketing Managers’

Key Result 1: Collect 100.000 new leads from industry ‘Online Marketing’.

Key Result 2: $50.000 additional revenue with customers from within this segment.

Key Result 3: Average Customer Satisfaction Rating within this segment of 75%.