OKRs
As a business begins leveraging OKRs for goal setting, I’ve never seen, nor heard, of an organization that hit the nail on the head on the first pass. Rather than tell one specific iteration we made towards OKRs, I’ll share where we ended up after 2 years of tweaking and refining.
Reasoning.
Here are some of the biggest problems we ran into with OKRs:
Early on, there was a significant amount of attention towards output and working towards the board meeting instead of focusing on the impact to the customer.
Our OKRs really started to cause some unneeded whiplash, where, for example, two weeks into the quarter we’d need to make a strategic change and the OKRs were obsolete.
We were constantly getting to the point where OKRs weren’t getting finalized until we were already a month into the quarter.
The product teams set OKRs, but then would not reference them throughout the quarter.
The product teams would reach the end of the quarter with not much impact to the OKRs.
Much of the insight we leveraged around OKRs is from Felipe Castro.
Documentation.
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The executive team provides a half strategy as to where the business needs to improve.
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The product focus first contains the company’s half goals, and then product objectives pointing to the company’s goals by each product domain. Each objective has:
A hypothesis defining how it will feed into the company goals
Key metrics explaining where performance is currently and what success looks like if the objective is achieved and links pointing to the internal reports of the key metrics.
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The charter is the north star for each product team. This document contains an evergreen vision as to the direction of the squad including a mission, goals, success metrics, and a brief summary of how the squad got to where it is now. The purpose of this artifact is to be referenced as OKRs are being set, to ensure long term alignment.
Mission: In one sentence, define what the product team’s purpose and responsibility is.
Goals: 1-2 specific and actionable objectives derived from the mission and higher-level business strategy
Success Metrics: Define 1-3 KPIs that will define the health and success of the product.
Summary: In 2-3 sentences, summarize what the team is responsible for, how they’ve gotten there, and the architectural domains the squad is accountable for.
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The squads are to set objectives and key results that align with the product focus. Each objective should be directional, but not too specific.
There are then two different types of key results: Impact and Insight.
Impact KRs are focused on the outcomes of delivery making an impact on the business and the user. These should be very specific about a specific metric with a baseline metric as to how performance is currently and where we hope to get it. These KRs are communicated out to all stakeholders
Insight KRs are focused on the outcomes of discovery efforts. For example, what the squad trio hopes to learn from discovery initiatives or what needs to be done in order to have enough context in what their impact KRs should be.
Rather than have key results all based upon what can be achieved in a quarter or half, we have found that it is more effective to have squads set deadlines as to when they think they can impact their goals.
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Each product team at the end of each month provides a summary defining the status of OKRs, accomplishments, challenges, and needs of the team. Then at the product domain level, leadership provides an update on the status of the key metrics for the half with additional context on each product team’s performance. This is then reported on and shared out at a company level.
Process.
Product Leadership OKRs
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Gather monthly summaries from product teams and document a half summary by the beginning of the month prior to half's end.
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Each product domain leadership to propose how the domain will support the company’s following half goals. This will be reported on with the previous half’s summary
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Meet with product leadership to:
• Review the status, accomplishments, and challenges of the Product Half Summary.
• Define what of the previous half has been completed, still outstanding, or no longer a priority.
• Discuss what potentially needs to be included in the coming half strategy.
• Discuss proposed core metrics for the coming half strategy.
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Via email, we will review with Key Stakeholders (Executive, Marketing, Operations) on the current half’s Product Focus and align on the proposed coming half’s Product Focus.
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Review with Squad Trios on the current half’s Product Focus and defining the coming half’s Product Focus.
Set Expectations:
• Realigning to OKRs to new core metrics
• Define where OKRs might change completely
Squad OKRs
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Description text goes here
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Description text goes here
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Monthly Reporting
By the first Friday of the month, each product team is to complete their monthly summary, and then by the following Monday, group-level leaders are to provide the product domain summary containing the product teams’ summaries.
On the following Tuesday, director leadership shares a single monthly summary pointing to all of the summaries and reports in the director level meeting on OKR updates. On that same Tuesday and Thursday, each product domain reports on outcomes, delivery, and discovery updates to the product teams referencing the monthly summary.
Outcomes.
Alignment
This aligning made it very clear for each product trio to know what they need to focus on, preventing distractions. Morale was improved with the squads feeling in control of their own destinies and also being bought in and excited about the goals that they set up.
Whiplash was decreased due to less frequent pivoting by the company, aligning existing goals to the new strategy versus coming up with new goals every beginning of a half, as well as the flexibility to only have goals per squad that were applicable and to depricate goals that had gone stale.
Achievements
During our implementation of OKRs in the above format, considerable gains were made, including a 73% lift in listing conversion, nearly 2x list in tour request conversion, and 4x engagement of filters, favorites, and saved searches.