Without ‘Objectives & Key Results,’ a product team is like a ship without a rudder. The team will have a hard time steering itself onto the right course.
The steps below outline the New York Times’s approach to setting OKRs, with a dash of my own technique thrown in. Here is an overview of the overarching process:
Start with a strategic vision
Grade your most recent OKRs and identify your learnings
Draft the Objectives
Draft the Key Results
Map the dependencies
Prioritize, align, and cut
Finalize the OKRs and commit
Periodically review and note progress
Step 1: Start with a strategic vision. There comes a lull during the month of December where sales deals close more slowly, new product features launch less frequently, and the Product Manager finally (finally!) has a chance at operating on a “maker’s schedule.”
Long stretches of undisturbed time are perfect to hole up in a room with a whiteboard. Bring a horde of markers, kidnap your engineering counterpart if you must, and let your creative juices run loose.
Identify the company’s big strategic goal (e.g. by 2025, we will hit X) and the current baseline (e.g. in 2020, we were at Y). With this framing in mind, answer the following: How should the product and the team evolve so that the business can move from Point A to Point B?
Step 2: Grade your most recent OKRs and identify your learnings. What were some highlights? What were some lowlights? What does the team propose to STOP doing as we embark on the next six months?
Grading OKRs and reflecting on learnings ensures that the team not only tests hypotheses but also applies the learnings of each experiment.
Step 3: Draft the Objectives. Now you are arriving at the meat of the planning process. Start with a draft of 3-5 objectives and assess whether each objective passes the following litmus test:
The objective ladders up to the broader company-wide objectives
The objective enables the team to deliver on the strategic vision
The objective aligns with the team’s mission
The objective can be evaluated using a measurable metric'
Step 4: Draft the Key Results. Here is a useful technique to apply: “use the Key Results as the test for whether or not you have achieved the Objective.” Well crafted KRs should tie in with improving the team’s key metrics. So bring out your KPIs and feel free to refer to them!
Step 5: Map the dependencies. Success will be limited if the team encounters blockers while attempting to achieve those objectives. For each OKR, identify any dependencies on other teams and share your objectives with impacted teams so that all teams may evaluate whether the objective can be supported. Likewise, keep your ear to the ground and identify all the possible objectives that may have a dependency on your team. Wherever possible, identify if it may be possible to set shared OKRs.
Step 6: Prioritize, align, and cut. You may now find that there are more proposed OKRs than what the team can realistically accomplish. How can the list be narrowed down? Set a High / Medium / Low score for three dimensions — Business Value, User Value, and Level of Effort — and assign an overall priority ranking for each OKR. Once the ranking order has been determined, “draw the line.” Above the line are objectives that the team can commit to. Below the line are objectives where leadership should help make tradeoff decisions.
Step 7: Finalize the OKRs and commit. Congratulations, you are nearing the completion of a new set of OKRs! The team should now have a prioritized list of OKRs. The OKRs have been reviewed with other teams to ensure cross-team alignment. Most importantly, the OKRs are grounded in the team’s past learnings and the company’s strategic vision.
Take one final pass through each OKR. Ensure the baselines and targets are documented. Make one last editing check, commit as a team, and… publish! Publish? Yes! Make it as easy as possible for the team and the team’s stakeholders to consult the final set of OKRs.
Step 8: Periodically review and note progress. Find a cadence that works for your team to check-in on the OKRs. Raise risks early and celebrate your wins!