It's that time of year again! Time to start the annual planning process for next year.
Many software organizations have adopted OKRs (Objectives and Key Results) as their company goal setting framework of choice. (If you're looking for a primer, check out Measure What Matters or Radical Focus.) Planning and goal setting are important, and having a handy framework should make it easier for companies to efficiently establish focus for the upcoming year. Unfortunately, I've seen OKRs be implemented very poorly, resulting in huge amounts of overhead with little value, lack of strategic focus and alignment, and friction within teams instead of fostering collaboration.
Make sure your OKRs are OK and that your team is set up for success for next year.
Here are some pitfalls to avoid when creating OKRs:
Output instead of outcome
Siloed to a individual department
Owning things you can't control
Lacking strategic alignment
Output instead of outcome
One of the key tenants of OKRs is to focus on outcomes. However, product leaders still end up writing OKRs for their teams the focus on output. Do not write an OKR based on "number of things happening" (e.g. number of releases per quarter or number of requirements written). Instead, focus on the intended outcomes you want to achieve for your team and your product. (Hint: If you're stuck on a "number of things" OKR, ask yourself "what would hitting that number get me?" What would having 3 releases get me in terms of customer acquisition or retention? Then reframe your OKR around that outcome.)
Siloed to a individual department
OKRs have the opportunity to foster collaboration by bringing teams together and focusing on a common goal. Good OKRs can be a "battle cry" that rallies the troops and gets people aligned and focused on shared outcomes. However, it's really easy to instead give each department head the mandate that they must create their own department level OKRs that they must own. Don't do this. Focus on what the company goals are, and work cross-functionally to establish OKRs that bring teams together. For example, if there is a company goal to expand into new markets, there should not be separate Sales, Product, Engineering, and Marketing OKRs where everyone is working in their own silos. Work together to figure out how your team can help contribute to achieving the shared goal and develop a cross-functional plan to make it a reality.
Owning things you can't control
It's tempting to assign OKRs to key leaders, but often times companies miss the mark on where true ownership lies. For example, I have seen product managers assigned ownership of OKRs around product releases. First - that's a bad OKR because it focuses on output (see above). Second, the PM has no control over the speed at which a product gets developed. If you are going to be dogmatic about assigning a single owner to every OKR, make sure it's the right person who has the authority, autonomy, and influence to truly own it.
Lacking strategic alignment
Too many OKRs is a sign that you have a lack of strategic focus. While every company would love to decrease churn, increase upsells, increase TAM, win new deals, increase deal size, decrease tech debt, increase security posture, and decrease risk, the truth is you simply can't do them all. There are limited people with limited resources and limited time. You have to make tough decisions about how to best prioritize and focus. The lens at which you make these decisions is through your company and product strategy. If these strategies are ill-defined, do not bother starting to come up with OKRs. Set your strategy first, then write a few OKRs. Then delete at least 20% of the OKRs you just wrote down.
Conclusion
Good luck to all of you coming up with your 2023 OKRs during this wonderful OKR season! Try to avoid the pitfalls listed above and if you need more help with OKRs or product KPIs, reach out to me at michael@product-bridge.com.
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