Product managers have a lot to deal with. Client requests, project deadlines, and team management are just some of the challenges they face. It can be difficult to carry out all these while maintaining delivery schedules.
In this case, product objectives and key results (OKRs) and adopting a goal-setting framework come in handy. They can aid in prioritizing and coordinating product managers’ efforts with the company’s goals.
Product OKRs also document the outcomes of adjustments and advancements produced by the team, which aids in gauging the growth of product development.
What are OKRs in product management?
In product management, OKRs is a quarterly goal-setting approach adopted by product teams to concentrate on the most crucial improvement areas and provide beneficial measurable results to the company.
This goal-setting framework was devised by an Intel man Andy Grove. The adoption of OKRs by businesses like Google and Adobe has sped up innovation and growth by enabling teams to understand how their efforts contribute to the organization’s larger goals.
Product OKRs are built around two key components:
- Objective – the qualitative goal that describes what needs to be improved in a product
- The key results – these are the outcomes that determine if the team is moving forward to achieve the objective.
The objective is similar to a mission statement, but only for a quarter. Great objectives challenge the team to achieve the key results within 90 days—making it ambitious yet realistic.
The success will be determined by the project manager, with the key results under the objective measuring it. The team should also have three or four key results for each objective, all measurable or quantifiable.
OKRs and KPIs – what’s the difference?
While an OKR is a goal-setting technique that helps enhance performance and empowers the team, KPIs are business metrics that indicate performance. KPIs produce the data the team must analyze to establish the foundation for its OKRs.
Both OKRs and KPIs are quantifiable and reveal just how the team performs. The main difference between the two is what is being measured and how these measurements are determined.
KPIs are utilized to assess performance. However, they do not identify what needs to be changed or improved to boost those figures. They are simply the business performance data analyzed regularly.
On the other hand, OKRs determine what needs to be modified, rectified, or enhanced. After identifying which areas need improvement, Objectives specific to that area are established, as well as the Key Results to gauge the progress toward the Objective.
Why OKRs are important for product managers
This goal-setting framework can foster an atmosphere where the team works with a sense of purpose. Numerous organizations have had tremendous success with OKRs, especially in product management.
Here are some of the reasons why it is important for product managers.
The product team can concentrate on what matters when things are kept simple and there aren’t many Objectives and Key Results.
Although product teams usually operate in sprints, OKRs do not interfere with this process—they offer a focused strategy to pursue for the next three months.
Remember that OKRs often do not cover all actions performed daily because, ideally, they should reflect the most crucial areas for the product team to develop rather than specific jobs.
Flexible product management and development processes
In contrast to conventional long-term product planning, OKRs employ a cycle of quarterly goal-setting and weekly check-ins. This enables product teams to make changes immediately and learn through retrospective reviews.
Product teams benefit from increased agility, the ability to assess risks, and a reduction in resource waste.
The quarterly setting of OKRs enables everyone to concentrate on significant improvement and examine the outcomes to make better choices for the following quarter.
Cycles that are regular and shorter cut down on planning time while giving team members autonomy to deliver urgent action plans and clarity about the long-term strategy.
Finding the best solutions easier
The biggest problem with most product teams is that they define Key Results as a set of action-based outputs rather than as measurable results.
The outcome is the quantifiable result aimed to be observed after completing outputs, whereas the output is a project that is aimed to perform to meet the goals.
Team members can choose which tasks (Initiatives) to concentrate upon in the quarter in order to achieve the Key Results. If they choose the minimum initiatives, the Key Results they set for themselves will fail.
Everyone has personal accountability and clarity about their team Objectives since OKRs are determined by the entire team, not just the team manager, which makes it more compelling to accomplish them.
Aligned products with business objectives
Setting OKRs for product teams aids in integrating team goals with that of the organization. Every team member is then aware of how their job relates to the top-level objectives.
When used properly, the OKR framework may unite the entire organization and motivate everyone to work toward a common purpose.
Moreover, encouraging team members to do work that has more excellent value and an impact on business results can be accomplished by periodically addressing OKRs and analyzing accomplishments and obstacles in the quarter.