In this two-part article I will cover the journey from business objectives to roadmap and execution and illustrate the connections between different product development processes and the way it ties back to business goals.

What are OKRs?

Objectives key results (OKR) is a popular management strategy framework for defining and tracking objectives (goals) and their outcomes. This framework, which is widely common in medium — large enterprise tech companies meant to connect between the company’s goals, the department’s, the team’s and even personal goals over a specified period of time.

If used correctly, OKRs can enable companies and teams to increase efficiency and focus their efforts so they can work together in one unified direction.

Objectives & Key results

Your objective(s) should answer the question: “What am I aiming to accomplish?” and it doesn’t matter if you are setting OKRs for a company, a project or a product team you should always have an objective(s). On the other hand, your Key results should describe “What actions are you going to do in order to achieve your objective(s)?” they are meant to be expressions of success and represent progress towards the objective.

A data driven approach for Objectives key results

Let’s say that your company owns a mobile app and your team is responsible for generating traffic for this app (to simplify things let’s assume quality traffic measured daily and that we are able to measure its impact (Which can also be done with the right OKR setting).

Step I: Defining the Objectives

Our first step will be to identify the objectives based on our product, business needs and requirements. Based on the case study above we can define the following objectives.

• Increase mobile app user base.
• Increase app usage.

Step II: Assigning relevant KPIs for each objective

Understanding the objectives and defining the right key results is a crucial step when setting OKRs. With the approach presented in this article we will identify the relevant KPIs for each objective and place weight to represent the importance of every KPI.

Note: Using KPIs as key result bring deeper understanding of the objectives and will allow more accurate measurement during the given period. In order to better illustrate the impact of the approach let’s define two key results that aims to increase the number of new users, one will be with the KPI approach (KR1) and the other with the common approach (KR2):

O: Increase the number of new users.

KR1: Increase first opens by X%

KR2: Start 5 new acquisition campaigns

The main difference between the two KRs is that starting 5 new acquisition companies does not guarantee an increase in new users (in theory those campaigns can provide 0 new users) while an increase in first opens necessarily means that our ‘new users’ base will grow. With a KPI-First approach we train ourselves to understand the “moving pieces” behind the objective(s) and lay down the foundations for figuring out the “How” (e.g. create an acquisition campaign) which I will cover in part II of this series.

Note: This article is meant to demonstrate an overview of the approach and doesn’t take under consideration all possible KPIs/Key results (e.g. one might say that Churn rate can be a KPI to consider for increasing your app user base).

Step III: Indicate the growth for each Key Result

For each KR we will define three levels of success 0.3, 0.7 and 1.0 (see example below). Setting the goals for a Key Result can be very challenging, on the one hand you don’t want to make it too easy but on the other hand not to hard, try to adjust your goals in a way that will increase your team capacity and will increase efficiency, if you’re continuously hitting 1.0 or even 0.7 you are probably not challenging yourselves enough.

O: Increase mobile app user base

KR1: Increase the avg quarterly number of first opens

1.0 — Increase first opens by 70%

0.7 — Increase first opens by 49%

0.3 — Increase first opens by 21%

Note: Implying statistical methods can be very useful for the accuracy of your result, there are many ways to do that, however in this article I’m presenting only one example for “goal setting”, the above should be done for each Key Result and be evaluated carefully considering your objectives and overall goals.

Step IV: Track your objectives and key results thought out the quarter (or the other given period).

One of the advantages of the approach presented in this article is the ability to demonstrate your progression throughout the quarter, this can be useful in a lot of different ways, from contributing to your agile processes and prioritization and up to stakeholder management and cross-company collaboration.

Understanding the results

Looking at the above example we see that Q1 ended with a score of 0.42 for KR1 “Increase the avg quarterly number of first opens”, the weight assigned to this KPI was 0.1 so in order to evaluate the true impact of KR 1 we will multiply 0.42 X 0.1 which shows that the calculated score for KR1 one is 0.042.

KR1 is just one out of 5 Key Results that represents the success of delivering the objective “Increase mobile app user base” the total score for the objective will be given by the sum of all calculated scores for KR1–5.

Final notes

I’ve seen a lot of companies and teams trying to implement processes and methodologies to increase efficiency and improve their development and business (and I’m not talking only about OKRs), it’s important to remember that the processes and methods you take-on should conform to help you and not the other way around.

In order to be able to take-on new methods and processes you should understand your business/product and the areas you operate in (strengths and weakness alike). Don’t underestimate the importance of diving into the bits and bites of your success metrics and KPIs, taking the time to plan your OKRs and track them properly can have a huge impact on your work.

See you in part II where I will cover the next steps the connection between OKRs, roadmap and agile process.

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