Week 4 - Week in Product Series - Secrets of Success (OKRs)
Week 4 - Week in Product Series - Secrets of Success (OKRs)
Quote
if you don’t know where you’re going, you might not get there - Yogi Berra
💯 Framework
TLDR;
Why the secret to success is setting the right goals
How can you set measurable goals through OKRs
Examples of OKRs
What are OKRs
OKRs are the short form for objectives and key results. OKRs are a collaborative goal-setting protocol for companies, teams, and individuals. OKRs can guide you to the mountaintop or to the vision you want to get to.
Let's dig deep into how are OKRs constructed and how can they be used to reach goals.
An Objective, Is simply WHAT is to be achieved, no more or less. By definition, objectives are significant, concrete, actions oriented, and ideally inspirational.
Key results benchmark how to get to the objective. Effective key results are specific, time-bound, aggressive, and realistic. it's not a key result unless it has a number on it.
Credits: https://okrexamples.co/okr-format
Let's look at some examples now, the more example you read the more you understand OKRs
NASA
Let's assume you work for Nasa and as an organization, you are tasked to write OKRs for the next manned moon mission. The goal is to achieve a manned mission and you come up with objectives to achieve that you are tasked to write KRs for one of the Objectives which is to build a space suit for the next moon mission. When you write KRs make sure you keep them specific, measurable, attainable, relevant, and timely. Here is an example of how can you write KRs for the tasked objective.
Objective: Build a space suit for astronauts to walk on the moon
Key Result: The cost of the suit should be no more than $2M to produce
Key Result: The suit must not weigh more than 62 pounds without the life support backpack
Key Result: the suit must be of the highest quality fabric and seams to support an operating pressure of 3.7 psi
Allbirds
Let's assume you work for Allbirds shoe company and you have an objective to create the lowest carbon footprint in your industry.
Allbirds Objective: Create the lowest carbon footprint in our industry.
Key Result: Supply chain and shipping infrastructure 100% zero waste.
Key Result: Pay 100% carbon offset for calculated carbon dioxide emissions.
Key Result: 25% of the material is compostable.
Key Result: 75% of the material is biodegradable.
Zume Pizza
Let's assume you work for Zuma Pizza company and you have an objective to Delight customers.
Zume Pizza Objective: Delight customers. Ensure that our customers are so happy with our service and product that they have no choice but to order more pizza and rave about the experience with their friends.
Key Result: Net Promoter Score (NPS) of 42 or better.
Key Result: Order Rating of 4.6/5.0 or better.
Key Result: 75% of customers prefer Zume to the competitor in a blind taste test.
Things to consider while setting outcome-oriented goals
Be specific
Measurable
Attainable
Relevant
Timely
Here is a comparison between bad KRs and good KRs
Credits: https://weekdone.com/resources/okr-examples
Assessment of OKRs
OKRs should be ambitious but achievable. If you achieve less than 70% of your KR, it may have not been achievable. If you are regularly achieving 100% of your KRs, your goals may not be ambitious enough. so while setting OKRs make sure they are ambitious but achievable.
Hard goals drive performance more efficiently than easy goals. specific hard goals produce a higher level of output than vaguely worded ones.
The Moral of OKRs: You're not going to get the system just right the first time around, It's not going to be perfect the second or third time, either. But don't get discouraged. Persevere.
The hardest part of setting OKRs is to pick top objects that translate maximum value, sometimes the Top 3 or 4 objectives can drive up to 80% of the value for a product, keep that in mind.
OKR scaling
You can use several methods to grade OKRs. Regardless of the method you choose, you’ll need to determine at the outset what scale to use, what each increment represents, and how to define progress. For example, if your key result is to win 20 new memberships, will winning 10 memberships score 0.5, or will 14 memberships score 0.7? In addition, each key result needs its own scoring criteria. The whole team must clearly understand the scale for each key result they will work on.
in this system, you grade each key result, then average the results to grade the overall objective.
Averaging an OKR looks like this:
Key result #1: 0.5
Key result #2: 0.7
Key result #3: 0.3
Objective: 1.5 ÷ 3 = 0.5
you complete an objective when you accomplish 70 to 75 percent of each key result. For aspirational objectives, consider scores of 0.6 or 0.7 as successful. OKRs bring focus and alignment between teams and help you to commit and track your goals.
📚 Book
Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs
Legendary venture capitalist John Doerr reveals how the goal-setting system of Objectives and Key Results (OKRs) has helped tech giants from Intel to Google achieve explosive growth—and how it can help any organization thrive
🎧 Youtube:
😎 Meme
Credits
https://www.smartsheet.com/content/okr-scoring
https://www.whatmatters.com/resources/google-okr-playbook#writing-effective-okrs
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