We are right in the middle of the OKRs cycle review at the end of the quarter. So, I thought I’d help you by providing four common challenges teams face when defining OKRs and how to overcome them.

These real-world scenarios are extracted from my extensive experience, designed to streamline your OKR-setting process and enhance team performance.

OKR Challenge #1

Imagine this scenario: your product is experiencing low conversion rates and you’re in the planning phase of the upcoming OKR cycle. 🤔

Here’s the challenge: Would you define an OKR as “Improve Conversion Rate by 30%”?

Of course not! This is a common mistake that provides little or no guidance to the team. ❌

The truth is your goals cannot be as complex as the challenges you face. If the problem is conversion, your OKRs can’t just be about “converting more”.

✨ The real focus should be on thoroughly understanding the challenge. Diagnose the situation and identify guiding policies (strategic hypotheses) to overcome it. Ask yourself: “What needs to be true to validate this hypothesis?”

Going back to the initial challenge, if the problem is with conversion and you conclude that the issue is with onboarding, then you should set one to three OKRs to specifically improve that area.

🚀 Think about the change you could bring about by focusing on improving onboarding. For instance, an OKR could be “Increase the completion rate of the new user onboarding process by 40%”. This is more tangible and actionable than simply “improving conversion”.

OKR Challenge #2

Imagine your product has low engagement, leading to user churn, and you’re in the planning phase of the upcoming OKR cycle.

Would you set an OKR like “Improve Engagement”? 🤔

Obviously not.

Turning Ambiguous Goals into Meaningful OKRs

Transforming an ambiguous or overly ambitious goal into effective OKRs might seem complex, but it becomes much more manageable with the right approach.

Identifying Key Hypotheses

Suppose your goal is to increase user engagement in your app. Start by identifying key hypotheses like, “Improving the interface will boost engagement.” This approach of asking, “What needs to be true to achieve this goal?” can transform vague ambitions into concrete objectives.

Validating Assumptions

Next, apply the “How could we validate this assumption?” method. For instance, redesign the interface and measure its impact on engagement. Here, your Objective could be “Create a more engaging and intuitive interface,” with Key Results like “Increase average session time by 20%” and “Decrease bounce rate by 15%.”

It’s crucial to keep your OKRs specific, measurable, and achievable. Remember, we’re aiming for tangible results, not wishes upon stars.

Using OST to Define OKRs

You can use the following technique, which is an adaptation of Opportunity Solution Trees, to collaboratively and visually break down overly ambitious goals into effective OKRs for your team.

  1. Place the overarching goal at the top of the tree. Then brainstorm strategic hypotheses by asking “what needs to be true to achieve that goal?”, select the most significant ones, and place them at the second level.
  2. Then, for each strategic hypothesis, brainstorm possible strategic solutions by asking “how might we achieve the strategic hypothesis?”, select the most promising ones, and place them below.
  3. Select the branch that makes the most sense to start with and define an OKR.

OKR Challenge #3

Imagine your team is about to start planning the next OKR cycle, and you get a request from your CEO to deliver ‘Project X’. What OKRs would you set? 🤔

Most teams, driven by frustration, would just set a goal like “Deliver Project X”. Which is actually what you have to do. However, there is a better way.

Reverse Engineering OKRs

Even teams that see themselves as mere “feature factories” can develop meaningful OKRs.

It’s about identifying and tackling specific challenges and risks unique to your team’s context, aligning with broader objectives but focused on areas where you can genuinely make a difference.

Many teams I’ve worked with have expressed frustration at feeling like mere ‘order takers,’ ‘feature factories,’ or ‘delivery units.’ This perception often turns their OKRs into a lengthy checklist of tasks (output-focused OKRs), or leads to the creation of fictional OKRs that merely resonate well with an already defined project list.

This practice, which I refer to as reverse engineering goals, is a trend I’ve observed in many Scrum Teams. Lacking a coherent strategy, they receive an agenda for the upcoming sprint and retrofit a sprint goal to match. It’s quite an ironic situation, isn’t it?

Identifying Unique Challenges

Even if your team is in ‘feature factory’ mode, focus on unique challenges and objectives within your sphere of control. Think about the gaps between the mandated tasks and your current capabilities, such as addressing technical debt or improving delivery metrics.

Establishing Strategy-Aligned Goals

By focusing on these specific areas, your team can establish meaningful goals that respond to upper directives and foster genuine progress.

OKR Challenge #4

Imagine you’re about to start your OKR planning for the next cycle, and you receive input from your higher-ups that revenue is declining. Therefore, you set your OKR to “improve revenue by 30%.” Is it that straightforward? No!

Let’s consider another practical approach from the perspective of product metrics.

Leading vs. Lagging Indicators

Understanding the difference between these two types of indicators is crucial. Leading indicators allow for timely adjustments in your actions, while lagging indicators show results after actions have been taken.

Practical Example: StreamlineApp

Take, for instance, a task management app where a leading indicator could be “The percentage of daily active users using new features.” This allows for quick adjustments based on user engagement. In contrast, a lagging indicator like “Quarterly increase in user retention” reflects long-term impact but doesn’t permit immediate adjustments.

Defining Leading Indicators

To identify direct actions and impacts, ask questions like, “What would need to happen for the lagging indicator to improve?” This helps in pinpointing measurable and impactful metrics.

Defining OKRs for Your Team

The key lies in identifying which metrics you can directly influence and continuously measure. Ask yourself: “Is this metric a direct predictor of success? Can it be measured and impacted within our objective cycle?” 

Avoid general indicators and consider the specific context of your team and product.

While lagging indicators provide certainty, leading indicators offer agility and the ability to respond quickly. The magic happens when we achieve a balance between the two, aligning our actions with strategic objectives and responding flexibly to changes.

Differentiating between leading and lagging indicators is essential for creating efficient building cycles and achieving product success.

Balance and Strategy: The Keys to Successful OKRs

As a coach specialized in product discovery and strategy, I’ve witnessed how balancing leading and lagging indicators can transform how organizations meet their goals.

Focusing solely on end results (lagging indicators) can lead to short-term actions that don’t support sustainable growth. Conversely, leading indicators, being proactive, provide a compass for precise navigation and real-time adjustments.

Your ability to discern and strategically apply these indicators can make a difference in the long-term success of your products and services.

Conclusion

As we’ve explored, setting OKRs is an art that comes with its set of challenges. Yet, with the right strategies, these challenges can transform into opportunities for growth and alignment within your team.

Remember, the goal is to create OKRs that are not just a formality but a catalyst for meaningful progress and achievement.

Are you ready to revolutionize your OKR process and lead your team to new heights of success? I’d love to hear how you’re applying these solutions or any questions you might have.

Reply to this email or click here to schedule a one-on-one session with me. Let’s make our next OKR cycle the most effective yet!

Stay innovative,
Gerard.


 

‘Focus on What Matters: Field Book for Effective OKRs’ 

‘Focus on What Matters: Field Book for Effective OKRs’ is designed to guide you through mastering Objectives and Key Results (OKRs) in a way that’s both practical and transformative.

This book represents a significant milestone in our shared journey towards excellence in product strategy and leadership. It’s crafted to provide you with the tools and knowledge needed to implement OKRs effectively, enhancing focus, alignment, and achievement within your teams and organizations.

If you haven’t had the chance to explore it yet, I warmly invite you to do so. Discover how to elevate your strategic planning and execution with ‘Focus on What Matters: Field Book for Effective OKRs’.

Get your copy now and start transforming your approach to achieving remarkable outcomes.

Focus on What Matters - Field Book for Effective OKRs - OKRs Book - Objectives and Key Results - Gerard Chiva

What’s Inside?

  • In-depth exploration of the relationship between strategy and OKRs.
  • Tailored guidance for managers and teams on effective OKR implementation.
  • Real-life case studies and examples that bring theory to life.
  • Practical tools, templates, and techniques to enhance your OKR journey.

Why This Book?

As a dedicated follower of my work, you understand the challenges and opportunities that come with setting and achieving impactful goals. This book addresses these head-on, offering not just theories but actionable solutions that you can apply in your day-to-day professional life.

Stay Engaged and Empowered

As you delve into its pages, be prepared to unlock new insights and strategies for mastering OKRs. Let’s dive into the world of effective OKRs and transform the way we approach our goals and success.

Thank you for being an integral part of this journey and for your continued support!

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