This article is an extract from our latest book, Product Academy Volume 3 dedicated to Product organizations. This book is aimed at anyone who wants to structure their organization with a view to making the best possible digital products.
"I have no idea what the company's strategy is for this year.", "I understand the overall strategy, but my objectives are either too vague or completely unattainable." How many times have I heard these phrases? Such dysfunctions are a significant concern for a CPO because they often lead to:
- A lack of team engagement, as they feel disconnected from the company’s strategy and their own goal-setting.
- A lack of purpose in individual actions, making work mechanical and repetitive.
- Inconsistencies and coordination issues between teams, resulting in lower-quality Products and wasted resources.
- Failure to recognize and reward good work and performance, which harms collective morale.
- An incoherent Product due to contradictory decisions.
- A Product that doesn’t help the company achieve its objectives, as it is sometimes just one of many levers to meet business goals.
Here is an introduction to the OKR method, which works exceptionally well for Product teams and is implemented at Thiga.
OKR = Objectives 🎯 & Key Results 🏋
The OKR method was developed at Intel and implemented at Google in 1999. Since then, Google has standardized this approach, inspiring many other companies to follow suit.
This method is simple and relies on two main pillars:
- 1. Ambitious and inspirational Objectives.
- 2. Key Results, which are quantifiable, time-bound indicators that assess the achievement of a given objective.
In the OKR method, Objectives are not quantified and remain relatively broad.
The Key Results (KR) provide the measurable criteria for success, enabling:
- Clarification of the Objective. For example, "Launch a successful MVP" can be broken down into dimensions like retention rate, user satisfaction level, media impact, etc.
- Setting measurable levels of ambition for each dimension.
You shouldn’t overload each Objective with too many Key Results. A range of 2 to 5 KRs per Objective is ideal, as it avoids scattering focus across too many metrics while ensuring no critical aspects (e.g., optimizing conversion rate without considering retention) are overlooked.
Starting from the big picture 🔭
OKRs exist at multiple levels: a strategic level and an operational level determined by each team.
Starting from the company’s mission statement, top management defines what will constitute success for the coming year—these are the strategic OKRs of the organization. Typically, this is done during an annual meeting where the CEO and the executive team agree on the company-wide objectives. We believe this meeting should be prepared in advance by each executive team member, in collaboration with their teams, to identify ambitions and success criteria for each entity within the organization. The Product team then translates these strategic objectives into Product objectives.
For example:
- Strategic OKRs: These represent the company-wide goals, such as "Expand market presence in X region by 20%."
- Product OKRs: Derived from strategic OKRs, these specify the Product-related contributions to the company’s objectives.
Key Results, or the key to the problem 🗝
Each Product team defines its Key Results quarterly, alongside its Objectives. These are then discussed with management. We recommend starting by listing all relevant Key Results (unquantified) and prioritizing them. Next, select the most critical ones and assign quantifiable targets to each.
KR formulations might look like:
- "Achieve X new sign-ups during the period."
- "Reach Y daily active users."
A confidence score should accompany each KR. A good KR is ambitious yet achievable, with a confidence level of about 50%—a coin toss. This ensures that KRs are aspirational, encouraging teams to strive while accepting the risk of falling short.
At the end of the designated period (usually a quarter), teams review their progress and assess the percentage of completion for each KR using pre-defined indicators.
Unlike many traditional goal-setting systems, failing to meet a KR is not considered a failure in the OKR method. The value of OKRs lies not only in achieving goals but also in fostering transparency, aligning teams, pushing organizations and individuals to excel, and learning what they are capable of delivering within a set timeframe.
For this reason, it’s best to separate OKRs from a bonus or incentive system. If you must link OKRs to rewards, ensure employees can still earn bonuses even if they don’t achieve 100% of their OKRs—provided the goals were ambitious and the effort to meet them was substantial.
Initiatives: the 3rd pillar of the OKR method 🏛
Alongside Objectives and Key Results, initiatives form the third pillar of the OKR method. Initiatives are planned actions aimed at improving one or more KRs. They represent the team’s to-do list. Alongside Objectives and Key Results, initiatives form the third pillar of the OKR method. Initiatives are planned actions aimed at improving one or more KRs. They represent the team’s to-do list. Like Objectives and KRs, initiatives must be transparent and tracked over time, often using a kanban board or another visual tool.
To ensure Objectives guide daily work and provide a steady rhythm for the Product team, we recommend aligning efforts with a Scrum-style cadence. Sprint planning sessions help determine the immediate action plan, such as:
- Initiatives and Objectives Example: A team might determine its initiatives for a two-week sprint as follows:
- What are the 3–4 initiatives we will achieve during the sprint to progress one or more KRs?
- Which projects need to be anticipated over the next month?
Not everyone will be able to take part in all these events; organize them by team (multi-disciplinary if possible), but don't forget to also communicate about the results throughout the organization (visual management, newsletter, quick sync points, dedicated Slack channel...). You can take inspiration from this very simple newsletter format to share progress on OKRs:
- List of goals and KRs and reminder of the confidence level for each (highlighting those that have been revised up or down)
- Reminder of initiatives carried out the previous week or 15 days
- Proposed initiatives for the following period by quarter
In a nutshell: a surprisingly complex method
The OKR method may seem straightforward, but implementing it effectively requires discipline.
Key Tips for Managing OKRs Effectively:
- Avoid “top-down” OKR definitions: Let your teams define their own Objectives, aligned with the organization’s strategic goals.
- Communicate objectives widely: Teams should always have a clear understanding of the company’s and other teams’ OKRs. Set up a simple tool so that everyone can view and track their own OKRs and those of other teams.
- Limit the number of objectives: For beginners, start with one or two and gradually scale up.
- Use varied types of KRs: Focus on multiple aspects of success, not just one or two KPIs.
- Set ambition levels that match your team’s maturity and risk tolerance to avoid demoralization: OKRs are designed to be aspirational, but not unachievable.
- Focus on “outcomes,” not “outputs”: Avoid KRs like “complete the project” or “deliver the new version.” Instead, aim for measurable performance improvements.
Resources - to go further:
- of course, our book Product-Oriented Organisations which includes a chapter on the OKR method!
- Tools for setting up and tracking OKRs: Perdoo, Weekdone, 7Geese, Javelo...
