And ideas on how to overcome them Photo by on Mikito Tateisi Unsplash To drive results, alignment and transparency I’ve been using as goal setting tool the now popular for about 3 years, in 3 different companies. OKRs (Objectives and Key Results) And I have repeatedly found similar challenges when setting them. I would have loved to found stories of people facing similar difficulties and how they were dealing with them. Unfortunately, I didn’t find any. So I wanted to share my story in case someone is out there struggling like I was and may find some of this experience useful. 1. How will you measure Key Results? It sounds silly. You already know that Key Results should be measurable. But every example you find is something like: “increase sales 10%” or “increase conversion 10%”. But… Is that 10% against last month, same month last year, average monthly sales? How to make it better Be very precise on the key result: . “increase total sales 10% in the whole quarter versus same quarter last year” 2. When will you measure it? Again this sounds silly. You will constantly measure it to check progress and how are you moving towards your goal, and determine the final achievement by the end of the quarter. But… for example, if you are implementing a feature that will impact performance and it will be ready at some point during the end of the quarter: should you measure average performance in the entire quarter or after the feature is released? How to make it better Again, be very precise on the key result: . You can even say “in the first week of January” if you expect to deliver too late in the 4th quarter. “increase 10% organic traffic conversion measured in the last week of the December as compared to the monthly average of December last year” 3. Isolating results that are affected by many teams In mid to large companies you have many pieces of a large puzzle affecting similar results. So if you consider for instance the goal “increase conversion 10%” for a product team, it will be influenced by how marketing is “buying traffic”. On the other hand, if marketing perfects its traffic acquisition you may have a 10% increase without any product improvement. If marketing is under great pressure to increase sales, it may lead to buying long tail traffic that doesn’t convert as much, and you may not reach a 10% conversion increase even with great product enhancements. Two options to make things better . Instead of having “increase conversion 10%” for the product team and “increase sales 10%” for the marketing team, give both teams both goals. a) Giving all “contributing” teams the same goal . For example, instead of having “increase conversion 10%” use “increase organic traffic conversion 10%”, where the product team efforts may be isolated from marketing traffic acquisition strategies. b) Isolating major contributing factors to have goals that the team can feel in control of : I prefer the first approach because it increases synergy and collaboration. For instance, marketing may start investing in a new traffic source and after seeing suboptimal conversion, they may work with the product team on making a new landing specific to this new users. The product team will understand the importance of making this traffic convert because they are also urged to increase sales since both share the same goals. Note 4. Area and personal OKRs I advocate for team OKRs. Especially in product teams where you have interdisciplinary small cells working towards delivering results, it doesn’t make sense to split those outcomes into specific individual tasks. But what about multi-team areas? Do you set goals at the area level? Do you set goals for the entire product organization? If so: what’s the value? Is it top down or bottom up? For managers: do you set personal goals or they just go with the area OKRs? How to make it better This is an area we are still struggling with. I do value area OKRs because they provide visibility for teams on how they are contributing to the “greater good”. Area goals may feel too abstract ( ) and no one is quite as accountable for them as team OKRs, but still provides a level of visibility that I believe to be helpful. “increase sales” Something related happens with managers/directors. If you assign the area OKRs to them, they won’t probably contribute to all of those key results. And the outcomes of their particular contributions will not be measured against any KR. So I do like having personal OKRs in those cases. 5. Bottom-up vs Top-down OKRs are supposed to be a , but that is easier said than done. I have never seen too much bottom-up traction when teams are initially introduced to OKRs. As teams gain seniority (in OKRs and the business in general) they organically start pushing more for the things they believe should be in the OKR list, achieving that bottom-up contribution. mix of bottom-up and top-down How to make it better This is what we do today: set initial high-level top-down OKRs, then let teams challenge their own KRs and also add objectives if there are other “outcomes the team want to focus on” not covered by the top-down OKRs. This will trigger the “should we focus on this or not” conversation, so you open the top-down vs bottom-up discussion in a very natural way. 6. Cross-unit OKRs A key element of OKRs is achieving synergy throughout the efforts of the entire organization. In practice, this means that some areas will be . driving some “OKR” requests to others For instance, let’s say that a particular business line has a growth key result. They will ask marketing to grow their investment. Likewise, marketing may request the product development team to build a new landing. This dynamic breaks the top-down vs bottom-up approach and brings a side-to-side OKR setting dynamic. It usually works well enough (since we are all seeing the company goals and on what we are focusing). But a problem may arise when a team has already too many OKRs under their belt and they can’t commit to new ones. Should the requesting team drop their request or should the requested team remove an existing objective? How to make it better In reality, this is a good conflict. . A good way to set a better stage for this conversation is to have all 3 teams working together in an OKR session. Maybe those 3 teams receive conflicting goals (ie — reducing marketing expenditure). But since they are on the same “working session” they will help each other achieve some balance and probably fight back together to the management team who set those conflicting goals and achieve a better overall company-wide result. It drives the conversation between teams about what is more important every team achieves for the organization 7. Solution-specific vs problem solving Given the nature of our work at some point, we will have identified a solution that we are going to implement. When setting OKRs many times the teams or stakeholders want to see if that implementation reflected on the OKRs for the quarter. Setting an OKR like “implement X feature” goes against the benefits of generating team autonomy and accountability towards the business results. How to make it better In the (highly recommended) article “ ” describes 8 levels of targets for a team, starting from “implement exactly this” to “Generate this long-term business outcome”. Beyond Outcome vs Output John Cutler I would argue you should never set OKRs at level 1 or 2 (solution specific) and you should move between levels 3 to 5, probably being 4 and 5 the best options. 8. Granularity On the other hand, being too broad on your goals (like “Increase conversion rate X%” or “Increase sales by $Y”) is not necessarily good for the team either. It would lack focus (there are a gazillion ways to increase conversion), it would probably lack synergy with efforts in other areas, and unless there is a big opportunity there will end up in marginal improvements. How to make it better Being more granular. Let’s say you have a multicategory e-commerce site and your conversion rate is 2%. You may set the goal increase conversion rate to 2.5%. If that is the case, the team can do a myriad of things and each of them will probably have little impact. On the other hand, let’s say you identify a category that is underperforming with a 1% conversion rate. If you set the goal to “duplicate conversion rate for X category”, teams will be really motivated and focused in that particular piece of the product. This will leverage synergies (many teams working on that category) and changes will be more visible instead of hidden under the overall conversion. Note: I previously did an entire post on this one. _NOTE: This claim is merely based on my experience using OKRs on the last 3 years, and reading/watching a bunch of…_hackernoon.com One of the most unmentioned factors of successful OKRs — Granularity 9. Timespan From a product strategy and planning perspective, the quarterly OKR mindset is great to focus us on things that we want to “solve” this quarter. But what if there are shorter or larger things? What if we are dealing with a small fix that we want to highly prioritize and see the results as soon as possible? What if we are working on a huge thing that would have a large impact after the quarter ends? How to make it better For “short & high priority” items I usually work with specifying the key result with a particular time frame. Suppose you saw an opportunity integrating a new payment method that will take about a month to complete. The key result may be “Achieve X% share of Y payment method in [Second month of the quarter]”. For longer efforts, you should strive to have some smaller milestone, that delivers a lower impact. Even when the “big” impact may occur the next quarter, I will still set key results that display the small value we can deliver sooner. 10. Outcome vs “process & practices” We usually focus OKRs on business outcomes. But what happens when the teams need to focus time and energy on some particular process or practice they need to improve (for example, improve experimentation). Many times I have tried to add side by side OKRs that are business related to “process-related”, only two find out two uncomfortable truths: a) It’s hard to compare (and thus to prioritize) such unrelated goals. When comparing business goals, it’s easier to choose which one to prioritize when under pressure. . Furthermore, you risk a lack of understanding on why that process or practice is needed, undermining the possibility of a cultural or mindset shift (which is the case in the “improve experimentation” example). b) When the only motivation to improve a process or practice is a KR, the practice gets lost as soon as the objective is removed How to make it better This is another area I’m still struggling with. My current recommendation is to have only business-related OKRs at the team level. To encourage process & practices, use another type of evaluation like 1–1 feedback, and/or communities of practice (like the “chapters” model in a Spotify-like organization). Conclusion Hmmm, OKRs setting looks quite hard after writing all these challenges. Fear not! I would say its actually the opposite. OKRs are quite easy to start with, and even when your initial versions will not be perfect, you will gain a lot of value at the beginning with the outcome focus, transparency, and alignment you will get. After a few quarters, you will start perfecting the technique and I hope this article helps you improve them faster. By the way, one last big challenge is how to align monetary compensation (bonuses) to OKRs. _I’ve been working with OKRs (Objectives and Key Results) for a while, and one of the problems I recurrently face is…_hackernoon.com How to handle bonuses in an OKR world Thanks for reading! I would love to hear feedback (or claps!) and your stories about OKR challenges. If you enjoyed it and want to receive more tools & tips to improve your product, you can subscribe here and join hundreds of readers of my Lean Experimentation blog!

BUNCH

The Maintenance vs. New Feature Product Manager

Should a team have complete freedom of choice on tools and processes?

Download a section of my book Product Direction

10 Challenges in Setting OKRs

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

3 goals to quickly improve the Product Management practice in your team

28 Stories To Learn About Goals

5 Productivity Hacks for Solo Founders

A Guide to Improving Your Focus

A Step-By-Step Guide to Reflect on 2022: The Most Powerful Journaling Exercise

Achieving Your Financial Goals: What To Consider Before Setting Those Goals

3 goals to quickly improve the Product Management practice in your team

28 Stories To Learn About Goals

5 Productivity Hacks for Solo Founders

A Guide to Improving Your Focus

A Step-By-Step Guide to Reflect on 2022: The Most Powerful Journaling Exercise

Achieving Your Financial Goals: What To Consider Before Setting Those Goals

Light-Mode

Classic

Newspaper

Minty

Dark-Mode

Neon Noir

Minty

HN StartUps