<title-serif>Implementing shared and highly visible<title-serif><title-sans> goal-setting (OKRs)<title-sans>
Part 4: We condense the experience of product leaders, a decade of client work and best industry practices into a six-part series of essential habits that organisations can adopt to nurture product culture.
Empowered teams aligned on what matters most across the company are an essential component of a strong product culture. A tried and tested way of cultivating this is by setting Objectives and Key Results (OKRs). When done well, they drive focus towards a few common goals.
This can amplify growth, lead to transformative customer experiences and, ultimately, determine enduring product success.
How OKRs nurture product culture:
1. OKRs promote meaningful conversations. By communicating priorities through shared goals and measurable results and focusing efforts on doing a few things really well, you will see the benefits quickly .
2. OKRs strengthen collaboration. Publishing and committing to OKRs at all company levels highlight interdependencies and avoids conflicting or duplicate initiatives.
3. OKRs align teams around customer outcomes. They encourage teams to continuously think, discuss and commit to goals (objectives) that positively impact the customers’ experience (results). OKRs should all contribute towards an overarching customer-centred metric—an indicator of enduring product/market fit— your North Star metric.
4. OKRs empower your teams. The company leadership should focus on where the company is heading and communicate this context to the teams through strategy and objectives. The teams are accountable for choosing how best they will realise this and demonstrating the impact of their choices through the results they agree with the leadership.
5. OKRs encourage organisational agility. The ability to respond to market conditions and competition is an essential competitive advantage. Quarterly cycles, contextualised by a long-term vision and strategy, ensure that teams can effectively plan for the future whilst remaining responsive to the present.
Paired metrics help to avoid falling into the trap of making what you measure. When teams define OKRs, they mustn’t optimise for any single topline metric to the detriment of others.
By designating paired metrics, they can broaden the conversation and consider the long-term consequences of short-term optimisation efforts. This establishes and communicates ‘limitations’ to operate within in the pursuit of realising goals.
For example, pairing business performance metrics (such as average cost per order) with a customer satisfaction metric (e.g. ease of use) will counterbalance optimisations that could lead to unintended negative consequences.
A ‘market-based’ approach
We have found a ‘market-based’ approach (top-down and bottom-up) to goal-setting to be the most effective through our experience working with companies of all sizes, whether they have a portfolio of products or multiple brands within a group and/or business lines.
Once the leadership presents topline OKRs, the rest of the business is free to set their own (or part of their own) objectives and key results, which empowers everyone to define how best to contribute to company goals based on their knowledge and insights ‘on the ground’. This can help to avoid attempts to cascade objectives or distribute targeted results amongst different teams. This requires full transparency around OKRs and a commitment to define objectives in a way that is mindful of the company’s high-level objectives.
Over time, goals tend to converge, and potential issues or duplication of efforts are spotted early.
What more to expect?
We believe that products are fluid and should be continuously improved based on a better understanding of customer needs. This is why product discovery at different altitudes is essential. Our next habit will focus on continuous product discovery by creating routine touchpoints with customers, taking advantage of technological developments, and analysing product/market fit continuously.
Part 4: Implementing shared and highly visible goal setting (OKRs)