Objectives and Key Results
During his time as CEO of Intel, Andrew Grove introduced the concept of OKRs (Objectives and Key Results). In his book High Output Management, Grove suggests that managers accomplish the long-term goals of the organization (i.e., the strategy) by using short-term Objectives (sub-goals) and Key Results (clear milestones for each objective to measure progress).
An Objective answers the question, “Where do we want to go?”
A Key Result answers the question, “How will we know we're getting there?”
OKRs have been widely used since the publication of the book and are currently adopted by companies such as Google, Uber, Zynga, and LinkedIn.
How to use OKRs
OKRs can be used on a company, team, or personal level. This course will focus on the tech team responsible for turning the roadmap elements into reality.
Choose 3-5 main objectives that are ambitious, clear, measurable, and achievable.
Under each objective, write down 3-4 measures that reflect the achieved objective.
Communicate the OKRs to the entire team.
Update results regularly (weekly updates are preferable).
When 70-75% of the measures have been achieved, the objective is considered achieved. If 100% have been achieved, then the objective was not ambitious enough.
Objectives and Key Results: An Example
The images below contain a lot of detail and it might be difficult to read all the text in the diagrams. Download a copy of the final diagram here. Put it on your desktop and open the file. You will be able to follow this example more clearly.
Imagine that your product is doing well. However, increased revenue has become an important objective.
Remember that an Objective answers the question “Where do we want to go?” and a Key Result answers the question “How will we know we're getting there?”
Increasing revenue could consist of several factors:
Getting new customers.
Encouraging existing customers to spend more.
Discouraging current paying customers from canceling their subscription.
In this example, visualize such Objectives and Key Results like this:
Now apply the same process to multiple objectives (each with its own key Results). It might look like this:
Principles of Roadmap Alignment to Objectives
Setting priorities is a key component of making a roadmap. What themes and customer problems are the most important? Which customer problems and areas for improvement do you tackle and when? Which do you leave off?
A helpful approach is to link each of the roadmap items to the objective that you think it will help achieve. The image below illustrates how you can create such a map between themes and the objectives of the product team.
When you show the link between roadmap items and the team's objectives, healthy conversation and debate can happen about whether the team has the right product roadmap to achieve its business objectives. This is a good conversation to have!
Putting it all Together: Creating a Theme-Based Roadmap
In the previous sections, you have learned the elements of an effective product roadmap. The order below is a more realistic one to follow:
Company Objectives
Product Vision
Broad Timeframes
Themes
The product exists within the larger context of the organization. Products help customers do their jobs while also helping the business to achieve its goals.
At an organizational level, the business Objectives and Key Results (outcomes) should be set first. A product vision is created to help the business realize its objectives, while also creating a positive product experience for the customer.
Choosing a set of broad timeframes depends on what works best for the organization. The organization should agree on the labels. Terms such as Near-Term, Medium-Term, and Far-Term could be used - or something entirely different.
Next, choose a set of themes to add under each broad timeframe. Add themes/features in each timeframe that help achieve the Objectives and Key Results for that timeframe. For example, in the Near-Term timeframe, the themes should address short-term objectives (3 months).
Finally, add a disclaimer to the roadmap before sharing internally and externally.
Summary
Every product team should have a long-term strategy which is achieved through medium-term objectives.
The team should decide on a set of key results that represent progress towards each of these (medium-term) objectives and should update progress weekly. This lets you know if you are achieving your objectives.
When designing a roadmap, it is important to relate each roadmap item (i.e., theme) to the objective that it is helping to achieve.
Use the following order when creating a roadmap:
Company Objectives
Product Vision
Broad Timeframes
Themes
Additional Resources
The Washington Post on how Andy Grove's High Output Management became a classic.
How Buffer uses OKRs (note this focuses a little on OKRs for employees as well as OKRs for a tech team/product but is still well worth reading).
In the next chapter, we will look at how to uncover customer needs which is a fundamental part of determining which roadmap elements can have the biggest impact.
