You understand what you want to achieve with your product and why it matters. This is your product vision. Now you need to define what success looks like so you can figure out the work it will take to get there. This starts with setting concrete product goals and success metrics. Then you can determine the product initiatives, features, and releases that will help you achieve your goals.
Product teams use various goal-setting frameworks — objectives and key results (OKRs) is one of the most popular. Using the OKR framework pairs product objectives with key results that indicate achievement. If you do not know why you are building something or how it supports your goals, it is time to cut it from the plan. The free OKR templates included in this guide provide a lightweight way to customize goals for any product.
Establishing goals is just the start. Every smaller unit of work on your product roadmap needs to connect back to the top-level goals. Track the detailed work in a way that is clear to the team and shows impact to leadership teams and stakeholders. Purpose-built tools like Aha! Roadmaps give you a centralized place to build strategy, connect goals to product plans, and roadmap the future.
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What are objectives and key results (OKRs)?
It can be helpful to understand the history of OKRs as you do your own strategic planning. The concept of management by objective (MBO) was first introduced by management consultant Peter Drucker in the 1950s. Its purpose was to improve employee engagement by giving people a voice in their professional goal-setting. OKRs evolved from the MBO model and were first introduced by Andy Grove, CEO at Intel in the 1980s. OKRs were later popularized when former Intel employee John Doerr introduced them at Google.
The idea behind OKRs is that you plan what you will achieve (an objective) alongside how you will measure success (key results). Each objective is assigned a score from 0.0 to 1.0 — with 0.7-1.0 indicating the objective is nearing achievement or fully achieved. Scoring helps you evaluate progress and adjust your priorities if needed.
Many organizations use OKRs to set an annual company-wide strategic direction and to monitor progress towards top-level business goals. You can also set OKRs by portfolio or product as well as by team or individual. Connecting each of these back to the high-level business goals aligns the entire organization around shared targets. This understanding of priorities helps you make better decisions about where to invest time and resources. Most importantly, it helps you understand how smaller units of work impact overall organizational success.
How do product managers use OKRs?
The best product managers employ a goal-first approach — right down to detailed planning. OKRs give you a framework to pair product objectives with the key results that will demonstrate achievement. For example, if your company has a business goal of increasing revenue, then you will want to establish a product goal that connects back to the business goal:
Business objective: Increase company revenue by $X
Product objective: Increase annual recurring revenue (ARR) by X percent
With the help of company leaders and the product team, you will need to determine how to quantify and measure success. For instance, potential key results for a SaaS product could be the following:
Key result 1: Add X new customers per month
Key result 2: Reduce new user churn to less than X percent per month
Key result 3: Increase average subscription to $X per month
Once you have defined your objectives and key results, you can plan the initiatives and major areas of delivery that will help you reach your goals. You should tie goals all the way down to the feature level — so that you can prioritize the features that will bring the most value to your customers and the business.
OKRs inform but do not replace your product roadmap. Time still exists and is an important factor for any product team working to deliver a Complete Product Experience to customers. So you will need to identify what you will do to achieve those OKRs and when you will do it. Any meaningful product will have related initiatives, releases, features, dependencies, and resourcing constraints to manage.
How to create an OKR
Creating a strong OKR starts with understanding exactly what you want to achieve and how you will measure success. While each business and product development team will establish their own objectives and key results, the process for making an OKR is fairly straightforward and applicable to all types of teams.
Read on for step-by-step instructions for how to get started defining your own OKR:
1. Understand business objectives
These are the high-level company goals that will guide you as you define your product strategy and specific areas of investment. Common business objectives include increasing revenue or reducing churn by a certain amount.
2. Set product goals
Each product goal should link back to a business objective. For instance, if a company goal is to increase revenue by $5 million over the next quarter, you can establish a corresponding product goal to increase annual recurring revenue (ARR) by a certain percentage.
3. Define success metrics
Company leaders and the product development team should cooperate on how to best quantify success. Examples of key results for a SaaS product include adding a certain number of new customers each month or reducing new user churn by a certain percentage per month. Many teams use a product value scorecard to further measure and prioritize the value each piece of work will deliver.
4. Determine product initiatives
Now that you have your product objectives and the key results you are aiming for, it is time to clarify how you will actually achieve those results. This is where product initiatives come in — they are the broad themes or areas of work the product team will pursue in order to achieve each goal. Examples of initiatives include improving users' mobile experience and enhancing specific product capabilities.
5. Map out corresponding epics, releases, and features
Each initiative will likely have its own epics, releases, and features. By linking each of these units of work on your product roadmap to a company objective, product goal, and product initiative, you ensure that the team is focused on what is most impactful to the business.
6. Track metrics over time
Creating an OKR is not a one-time exercise. You must regularly review your OKR to make sure you are attaining the results you want. Some product teams discuss their objectives and key results in weekly or biweekly meetings, while others track progress on a monthly or quarterly basis.
Customizable OKR templates
If you are just getting started with OKRs, begin with the six templates below. These are flexible templates that you can customize further if needed. You may need to make some light changes to match the way your team works.
1. Simple OKR template
This basic OKR template follows a common format — making it simple to get started quickly. List company-level and team objectives in the top section and product-specific objectives and results in the bottom section.
2. Team OKR template
Use this template to focus on team-level OKRs in more detail. You might designate shared OKRs for the product team or even specify OKRs for product leaders versus engineers, for instance. By assigning a set of OKRs for different team members to own, you can share the responsibility while also viewing team-level progress.
3. OKR confidence tracker
This OKR template helps you gauge results at different checkpoints throughout the month or quarter. Typically, confidence trackers are used to forecast progress. You would assign a score of 0.0-0.3 if the OKR is at risk, a score of 0.4-0.6 if the OKR is lagging but still achievable, and 0.7-1.0 if you are confident that you will achieve the OKR by its intended deadline. Although a confidence tracker measures sentiment, it is not subjective. Scores should still be based on objective results and actual progress.
4. Weighted OKR template
A weighted OKR template gives you the flexibility to calibrate results based on the significance of the goal. Determine your own weighting in the spreadsheet and the weighted scores will automatically adjust.
5. OKR simple presentation template
This template provides a streamlined way to display your OKRs in a presentation. It adds a layer — labeled key activities — so you can share planned work with cross-functional groups.
6. OKR detailed presentation template
Sometimes you want to share more details with company leaders and your colleagues in engineering or user experience. This presentation template gives you areas for yearly and quarterly objectives, as well as top priorities and upcoming plans. Adjust the colors to match your brand and go from there.
Excel OKR templates can be a helpful place to start. But the downside is that you will need to continually update these static documents — especially before your next meeting or leadership presentation. That is where product management software can save you a lot of time.
Set brilliant strategy, prioritize features, and share visual plans with Aha! Roadmaps — a purpose-built product development tool. Get started with a free 30-day trial.
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