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Pactum AIBerlin · UTC+1
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Occasionally, mostly about the parts of product management everyone performs and few examine.

OKRs - When to embrace when to avoid

Explore why Product Managers love OKRs and if this shiny framework really serves your needs.

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OKRs - When to embrace when to avoid

OKRs: When to embrace when to avoid?

OKR is one of the most popular wordings in technology companies. It doesn’t matter if you’re a universe size company with lots of cross-functional teams, or a startup where product folks also known as Swiss knife, OKRs are everywhere. But, what distinguish to getting the most from OKRs or just using because simply everyone is using it? Spoiler alert: OKRs are not for everyone!(Nothing personal lol)

Before digging into when to apply OKRs, let’s properly define a what OKR is and how to define OKRs.

What are OKRs?

OKRs are goals comprised of two key components:

  • Objectives - Defining Purposeful Targets: At the heart of OKRs lies the objective, representing the desired outcome you aim to accomplish. These objectives should be inspiring, challenging, and aligned with your broader vision. They serve as the guiding star that directs your efforts and provides a sense of purpose.
  • Key results - Measuring Progress with Precision: These are quantifiable and tangible milestones provide measurable indicators of success or progress. They enable you to track and measure progress objectively, ensuring transparency, alignment and accountability.

Why PMs love OKRs?

Okay, I assume these key elements are pretty self explanatory. Now let’s zoom out with that knowledge and look why use OKRs:

  • They create centralized alignment. Product Managers should ruthlessly prioritize and make trade-offs to to make sure their team always working on the most impactful tasks. Having well-defined objectives and associated key results is crucial leverage for PMs to create company-wide alignment and justifies saying ‘no’.
  • Empower cross-functional teams. While Product Managers are the main driver of prioritization, each team member gains their autonomy to asses why a product or feature needed and what tradeoffs need to be made.
  • They provide sanity check. Looking at how the outcome of product or feature performed against by implementing regular review process, OKRs make sure you are always working on the most important thing.
  • Leadership buy-in. There is no better way to onboard your senior leadership than showing your OKRs and how it can drive where your organization wants to go.

When to use OKRs?

OKRs are the most effective when there’s large number of stakeholders that aim to improve an existing product. This outcome can be boiled down to two main reasons:

  • OKRs require stakeholder involvement. This involvement ensures that the goals set through OKRs reflect the collective vision and priorities of the stakeholders, leading to increased commitment and ownership of the outcomes. It’s much harder to create OKRs for an ideation-phase product, since it’s challenging to align stakeholders with lots of uncertainties.
  • OKRs require some level of vision certainty. When the vision is uncertain or constantly changing(for a product that looks for product-market fit i.e), it becomes challenging to set meaningful OKRs and track progress effectively. Having a relatively stable and well-defined product vision is crucial for leveraging the full potential of OKRs.

While OKRs have gained immense popularity in technology companies, it is important to recognize that they are not suitable for every situation. To get the most out of OKRs and avoid using them simply because everyone else is, a thoughtful approach is necessary. By properly defining what OKRs are and understanding their key components - objectives and key results - we can appreciate why product managers love them. ❤️