Introduction: The Best Method for Identifying the Right Success Metrics to Track?

Because Product Managers are responsible for their products’ market successes or failures, they need clear, quantifiable feedback on whether the solutions they release are in fact viable.

But there are so many ways to define “success” that product professionals often find themselves suffering from metric fatigue. When a product team chases too many goals at the same time, its focus and energy become diluted. Worse, the company could miss out on the real successes that it might have achieved if everyone were focused on just a few big strategic goals.

 

 That’s where the Objectives and Key Results (OKR) framework comes in. Popularized by the early team at Google, OKRs have become one of the most proven methods for helping teams make big strides toward their most ambitious goals.

 

In the sections below, we’ll explore in detail how the OKR framework is so effective at helping any team – product, marketing, development, customer success, etc. – achieve significant objectives. But as a brief preview, the framework has a few distinguishing traits that make it ideal for pushing organizations to greater success. For example:

 

A few key reasons OKRs are the ideal success metrics

• They’re inspirational

The objectives in the OKR framework are designed to be “stretch” goals – possibly attainable but aggressive.

This forces the team to think big and aim high.

 

• They’re quantifiable

As OKR popularizer John Doerr told his colleagues at Google in its early days, if you can’t put a number to a key result, you can’t call it a key result.

 This ensures the team’s analysis and learnings are supported by hard numbers.

 

• They’re aligned to business objectives

In selecting objectives to focus on, the team starts by reviewing its company’s big-picture strategy – and then finds specific goals that align with that strategy 

This helps ensure the team is focusing only on product objectives that support the organization’s broader business priorities.

 

What Is the OKR Framework?

The Objectives and Key Results (OKR) method is a way of prioritizing large-scale, aggressive goals and then aligning teams to collaborate and steer toward those goals. The framework’s components are: 

Objective: The desired outcome.

Key results: The quantifiable (and timebound) metrics that signal the team has achieved its desired outcome.

 

How OKRs differ from KPIs

It’s important to note that OKR is not simply a different acronym to describe a success metric, interchangeable with the more commonly used KPI (Key Performance Indicator). There are at least two key differences.

 

 First, a KPI can refer to any type of goal, large or small, but the objective in an OKR is always an ambitious stretch goal. That’s a major advantage of using the OKR framework – it forces your company to aim high. In fact, if your team implements this framework and finds that you’re consistently meeting or exceeding your key results, you’re probably not setting those key results high enough.

 

A second distinction is that KPIs don’t always have the equivalent of key results to generate a clear yes-or-no answer about whether you’ve achieved success. Keep in mind, a “key performance indicator” is just that – an indicator of performance; it’s not necessarily a clear line separating success from failure.

 

For example, a customer success department might set a KPI to “reduce answer time” for customers who call into their contact center. That’s a legitimate goal. But the OKR version of that goal would need to be far more definitive and audacious. It might look like this. 

 

Objective:

Become a contact center team worthy of rave reviews.

Key results:

1. Reduce average answer time to a single ring within the next 2 months.
2. Bring our Google Reviews average star rating up to 4.7 within 6 months.

 

A few OKR best practices to keep in mind

 In addition to setting aggressive stretch goals for each objective, there are a few other best practices to consider when devising your team’s OKRs. 

• Limit your objectives for each time period

Teams typically set OKRs for timeframes longer than a development sprint – sometimes quarterly, sometimes semi-annually or even annually.

Remember, each of these objectives should be ambitious. So you’ll want to concentrate your organizations’ energy into pursuing only a few at a time.

For context, when Google implemented this framework (and for many years after), each of its teams would set only about five OKRs per quarter.

• Limit each objective’s key results

You’ll want to assign only a few measurable milestones to any objective. That way, your team will be able to focus its time and creativity on achieving those key results.

Smart teams typically set only two or three key results to each objective.

• Use short statements, in plain language, to describe each objective and key result

The OKR framework is designed to be collaborative, to help you enlist the help of stakeholders across your company to work with you toward reaching your big objectives.

 The best way to ensure everyone is steering in the same direction is to make sure that when you share your OKRs with your organization, each one is immediately clear to every stakeholder who sees it – whether they speak your product team’s unique language or not.

 

Examples of OKRs for Product Teams

 We summarized one hypothetical OKR above for a customer success team. Now let’s review a few examples of product-related OKRs. 

Objective:

Achieve product-market fit

Key results:

1. Generate 100 trial downloads per week in the next 90 days.
2. Convert 20% of new weekly trial users to paid subscriptions within 90 days.
   

Objective:

Make Product X a material contributor to the company’s overall revenue targets 

 Key results:

1. Sign five new resellers as channel partners within the next 3 months.
2. Achieve 40% growth in channel sales by end of Q3.
3. Close four new multiyear enterprise accounts within the next 6 months.

Objective:

Generate a big boost in customer retention

 Key results:

1. Increase annual renewals by 15% in 4 months.
2. Sign 30% of users nearing end of subscription to our new cost-savings incentive plan.
3. Implement freeware-bundle offer for existing customers and sign 5% to term extensions by end of Q1.

For a few additional examples, check out our blog on how to prioritize your OKRs.

 

OKRs must map to your larger business objectives

We noted above that you’ll want to start your OKR process by reviewing your organization’s business goals and then setting OKRs that align with those objectives. With that in mind, let’s briefly discuss the examples here.

 

Imagine that your company’s primary business objective for this year is to increase market share or expand your customer base. In that case, Objectives #1 and #2 – achieve product-market fit and add revenue – would align with that goal. But Objective #3, to boost retention, wouldn’t.

 

And if your organization wanted to boost revenue, then Objectives #1 and #3 might not be appropriate. The first objective is all about finding an audience for your product, but that might involve making it available free for a time. And to achieve the final objective, about convincing existing customers to renew their subscriptions, your team might prioritize lowering your prices for existing customers or offering them other money-saving incentives to stay with your product.

 

 Key takeaway: Not every objective will serve your team well, especially if achieving it will require you to set key results that run counter to your organization’s larger goals.

 

Benefits of OKRs in Product Management 

If you agree that Google knows how to put out a strong product and continually improve its user experience, then you might consider deploying the OKR framework for your organization. And if the fact that Google still uses it after decades isn’t enough to persuade you, then consider these other benefits.

 

1. They help teams strive for greatness.

 

It’s easy to set realistic and achievable goals for your product (or your team, organization, whatever) and then congratulate yourselves when you reach those goals. 

But that’s not how great products or great companies are built. 

OKRs encourage your team to think bigger, to demand more, and to innovate. You won’t set an objective to “become bigger than Apple” – because that would be insane. But, with the OKR method, your team can definitely set out to “Become a major provider in our industry.”

 

2. They align stakeholders toward a shared goal.

Everything about how the OKR is designed – bold objective, written clearly, backed by quantifiable results to determine success – makes it easy to communicate across your organization.

The other stakeholders contributing to your product’s success – development, sales, the executive decision-makers – will all know exactly what the plan is and how their skillset fits in.

 

3. They keep the company’s focus tight.

OKRs are by definition limited in number. You’ll be setting and working toward only a few each quarter or six months.

 

The benefit of this is that your contributors and other stakeholders don’t become distracted chasing different metrics or prioritizing initiatives that could actually undermine your big objectives. Keeping the list of objectives narrow also gives each team (and even each individual contributor) more freedom to innovate, streamline processes, and develop creative solutions to challenges that will inevitably arise. 

 

And when everyone on your cross-functional team is steering in the same direction, your organization becomes a lot stronger as they strive for those big goals.

 

Tips for Tracking Your OKRs

Now that you know how to establish objectives and key results (and why they can be so helpful for your product success), the next question is: Once you’ve set your OKRs, how should you monitor your progress? A few thoughts.

 

1. Make sure each one has data-driven milestones.

We’ve made this point repeatedly, but it’s worth restating here.

The point of the OKR method is to assign quantifiable metrics to each objective. So the fundamental first step to ensuring you’ll be able to monitor your progress on any objective at any time is to make sure it’s tied to key results that have hard numbers – new customers, average session time, YoY revenue increase, etc.

2. Set up your data tracking mechanism for each key result.

One great best practice is to create a list of data sources – apps, dashboards, key contacts within your company, etc. – where you’ll be pulling the data periodically to monitor how your team is performing against your goals. Examples include:

• Your product (if, for example, you sell software and your objective involves boosting product usage).
• Your marketing platform (if your key results involve boosting inbound leads, impressions, etc.).
• Your CRM or even a sales manager (if your OKR is focused on increasing overall revenue or average contract amount).

3. Establish a progress-review cadence.

OKRs are longer-term initiatives than, say, sprints. That makes sense, because an OKR is usually a big, ambitious objective, so it will take time to achieve. 

But you can learn well before the end of your OKR’s timeline whether you’re moving toward your desired outcome. So it’s a good idea to check in regularly on each OKR’s progress. 

For example, if you have an OKR with a six-month time horizon, you might want to review your progress on each key result every week or two – just grabbing the list we just discussed above and examining the numbers on each tracking platform you’re using.

This way, you’ll learn whether what your team is doing is working or if you need to adjust some of your priorities and shift some resources to try other approaches.

Note: Don’t fall into the trap of checking every data point every day. Reviewing your stats too frequently, particularly in the initiative’s early days, can give you a false sense of failure and possibly convince you to change strategies or direction before your strategy has a chance to start performing. This is another reason we set OKRs for longer time horizons – achieving big things takes time.

4. Share your OKR’s progress regularly with your team. 

It’s also a great idea to bring your team together periodically for quick sessions to update them on the current status of the OKRs they’re working hard to achieve.

These brief sessions are a great way to keep everyone on your cross-functional team aligned, make every contributor feel included and valued in the process, and give you a chance to discuss new ideas or approaches if some of your key results aren’t materializing to the degree you had expected.

Why OKRs Are a Perfect Fit for Product Roadmapping

Now let’s discuss how your objectives and key results fit into your roadmap. Fortunately, this part is easy. (And if your team has the right software platform, even easier.)

If you use the Theme > Epic > Story framework to build your roadmaps – where the Theme is the highest-level strategic item – then an objective could be one of your Themes, and each key result beneath it might be an Epic (or even a Story). 

And as simple as that sounds, the great news is that it doesn’t even need to be that much work.

If you’re using Craft.io’s end-to-end product management platform (and if you’re not, try it free now), you’ll be able to plug your OKR elements straight into our purpose-built OKR roadmap.

 

Our solution lets you quickly add objectives, key results, and the timelines you want for each. You can even use any of our other pre-built prioritization templates to score competing OKRs and decide which ones to focus on next.

As effective as the OKR framework can be at helping your team identify big success goals to strive for, you can make the process even better with the right tool.