How to Prioritize Your OKRs
Prioritizing OKRs Is Similar to Prioritizing Work on the Product Itself
As a product professional, you know the dilemma well: You always have more ideas for your product than you have the resources, budget, or time to execute on those ideas.
The same challenge, unfortunately, holds true for the broader business objectives you have in mind for your product – the marketing goals, sales goals, media goals, etc. No product team ever has enough resources to simultaneously achieve every business objective it thinks up.
So how do you determine which business goals to pursue for your product’s success (and which ones to let go)? The same way you make decisions about your product itself: prioritization.
When you need to narrow your idea-filled product backlog to a handful of epics, features, or other items that will deliver the greatest strategic value for your customer, you prioritize. There are plenty of useful product prioritization frameworks out there to help you determine which product initiatives to pursue (or at least to pursue before others).
And when it comes to setting market goals for your product, the most effective prioritization approach we’ve ever seen is the Objectives and Key Results (OKR) framework.
What Is the OKR Framework?
The OKR strategy comes from venture capitalist John Doerr, who introduced the concept to a fledging little company called Google, where he was one of the original investors and advisors. Doerr later wrote about his OKR framework in his book Measure What Matters. And if you’re serious about steering your product to success, we believe that reading this book is one of the best ways to invest five or six hours of your spare time.
The foundation of the OKR model is that both the Objective and the Key Results need to be specific. As Doerr explains in his book – and as he told those early Googlers 30 years ago – if you can’t put a number to it, you can’t call it a Key Result.
This forces your team to limit your focus only to those objectives you can quantifiably and definitively measure. And as Doerr argues, that’s an invaluable limiting mechanism, because it forces your team to choose strategically advantageous goals and then put their energy into achieving them. As you know, what gets measured… gets done.
Examples of OKRs
Let’s look at a couple of hypothetical OKRs for marketing your new product.
OBJECTIVE:
Increase trial usage.
KEY RESULT:
Reach 1,000 free-trial downloads per month (within the next four months)
OBJECTIVE:
Increase Sales-Qualified Leads (SQLs).
KEY RESULT:
Improve the conversion rate from Marketing-Qualified Leads (MQLs) to SQLs from 1% to 2.5% (within the next three months).
In both of these examples, the desired outcomes have a few important characteristics that make them a valuable way to measure progress:
- They’re quantifiable.
(Either you achieve the desired numbers, or you don’t).
- They have clearly defined time windows.
(Either you achieve the outcomes within the established timeframes, or you don’t). - They’re realistic.
(When everyone will be monitoring your progress, you won’t set unachievable goals.)
How to Decide Which OKRs to Prioritize Over the Others
Back to our original question: How do you choose which OKRs to pursue?
As we noted in the intro, you’ll want to take a similar approach when weighing the competing OKRs to the approach you take when narrowing your product backlog to just a few strategically beneficial epics, stories, or other items to work on first.
Because you’ll never have enough resources to pursue every OKR on your wish list at the same time, you’ll need to review them all against each other using key strategic criteria. It’ll be a balancing act where your team weighs, for example, each OKR’s potential:
- Impact on the product’s success
- Level of effort or difficulty
- Cost
- Contribution to your company’s broader business objectives
With that in mind, let’s take another look at the first hypothetical OKR above and consider its possible benefits and drawbacks.
OBJECTIVE:
Increase trial usage.
KEY RESULT:
Reach 1,000 free-trial downloads per month (within the next four months).
At first glance, this seems like a great OKR to pursue. And it might be. But let’s take a closer look. (This is the type of strategic analysis you’ll need to do with your OKRs to spot the possible risks, pitfalls, and ways that prioritizing one might actually undermine your business goals.)
Potential benefits:
- More inbound leads for the sales team.
- Useful information about who your most interested user personas are and how they’re learning about your new product.
- More early usage data for the product team to analyze (and use in its ongoing efforts to improve the product).
Potential drawbacks:
- You could be unintentionally incentivizing your marketing team to cut corners to increase these numbers. Marketing might increase trial signups, for example, by:
o Shortening the signup form (and sacrificing data that’s valuable for your sales reps).
o Accepting Gmail signups instead of demanding corporate email addresses (further weakening the value of each lead).
o Offering free stuff – say, an Amazon gift card or being entered into a big-prize drawing – for downloading the free trial.
When you step back and view the OKR this way, you’ll see that it carries risks of undermining your main goal: to pull in legitimate, qualified leads and to gain valuable business intelligence by monitoring how these early users engage with your product.
But it could be even worse than that!
Take another look at the second hypothetical OKR we introduced above:
OBJECTIVE:
Increase Sales-Qualified Leads (SQLs).
KEY RESULT:
Improve the conversion rate from Marketing-Qualified Leads (MQLs) to SQLs from 1% to 2.5% (within the next three months).If you want to pursue this goal, you need to consider that also prioritizing the first OKR could directly undermine this one.
If your marketing team knows you’ll be judging them on whether or not they can deliver 1,000 signups per month, then you’re giving them a direct incentive to take those shortcuts we just discussed – and that means encouraging lower-quality leads (competitors using their Gmail address, people just looking for the free gift card, etc.).
And these poor-quality leads risk both actually lowering (instead of increasing) your percentage of new SQLs and – even worse – wasting more of your sales reps’ time pursuing “prospects” who never had any intention of buying your product.
Bottom Line: to Decide Which OKRs to Prioritize, First Determine Your Broad Objective
With all of this in mind, it should be clear now that the best way to prioritize your OKRs is to take a big step back and decide on your overall objective. You first need to know in the broadest possible terms what you’re hoping to achieve within a specific timeframe – Gaining more user insights? Growing your lead funnel? Boosting revenue? – before you can determine how to develop your OKRs and then in what order to pursue them.
And if you’re looking for help building your OKR process, keep an eye here on the Craft.io blog. We’ve got a big announcement coming soon.
In the meantime…
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