Defining Success: When to Use OKRs and Product Goals
Clarity on what success looks like is crucial for any initiative. Two popular methods for achieving this clarity are Objectives and Key Results (OKRs) and product goals. But when should you use which method? In this guide, we’ll explore the benefits and limitations of OKRs and product goals, and provide tips on how to measure success in either case.
The Power of OKRs
I’ve worked with companies of varying sizes, from a handful of employees to several thousand. The larger the organization, the more challenging it becomes to align everyone’s goals. Failure to address this issue can lead to confusion, with teams often heading in different directions.
In one company I worked with, we had about 300 employees spread across eight product teams. Before introducing OKRs, each department set its own goals, and product teams adhered to individual feature roadmaps. This led to competition instead of collaboration, resulting in demotivating outcomes and a decline in team morale.
The introduction of OKRs changed everything. Management formulated objectives, explaining their importance to the teams, who then crafted key results for each objective. Although the process was initially tiresome, it allowed us to align and commit to key results, fostering a spirit of collaboration over competition.
When OKRs Shine
OKRs are effective in certain situations:
- The product is already available to consumers
- The business has achieved sustainability
- There are sufficient teams to address various objectives and key results
- The initiative is in the mature or maintenance phase
The Limitations of OKRs
However, I’ve encountered situations where OKRs didn’t work. In my experience with startups, for example, OKRs often caused confusion and hindered learning. Instead of aiding us, they led to:
- Teams unsure about prioritizing objectives, operating in isolated silos
- Every team trying to tackle multiple key results at once, stretching resources thin and hampering delivery
- Endless meetings in an attempt to align everyone, leading to more meetings and less actual progress
When to Abandon OKRs
Situations where I’d advise against OKRs:
- The product hasn’t launched yet
- The product faces challenges in gaining market traction
- The company has five or fewer product teams
- The initiative is a completely new venture
The Alternative: Product Goals
In a startup scenario, especially when aiming to launch a new product, the OKR approach proved too cumbersome. Instead, we set single, clear product goals. This approach resulted in:
- Reduced ambiguity
- More team collaboration, with fewer divisions into subgroups
- All team members working toward the most crucial goal
Measuring Success
With OKRs, measuring success is straightforward. You have the key results and can track your progress against them. However, with product goals, the measurement approach can vary. If the goal is outcome-oriented, it’s similar to OKRs. If it’s a binary goal (either achieved or not), then it requires creativity in measurement.
Key Takeaways
- OKRs are more suitable for established and mature environments
- In situations demanding high flexibility, OKRs can introduce confusion rather than guidance
- Product goals may be more effective for products in the pre-launch phase or new projects
- Regardless of your chosen method, it’s vital to find ways to quickly gauge progress
- Stay adaptable. If a particular framework hinders progress, don’t be afraid to abandon it in favor of a more effective approach