Objectives and Key Results of Product Principles (OKR)

This article is an excerpt from the Shortform book guide to "Inspired" by Marty Cagan. Shortform has the world's best summaries and analyses of books you should be reading.

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What are objectives and key results (OKR) in terms of product principles? What is the goal of setting OKR in a company?

OKR is meant to track progress against a measurable goal. There are six things to keep in mind when setting OKR at your company.

Here’s what you need to know about objectives and key results of product principles.

Objectives and Key Results of Product Principles

Product principles can be broken down into “Objectives and Key Results,” or OKR. This is the system that Google has used almost since its inception. The system is meant to empower employees while also properly measuring their progress. (Shortform note: OKR is meant to track a company’s progress against measurable goals.) Here are some things to keep in mind when setting objectives and results metrics:

Make the objectives organization- or product team-wide. They shouldn’t be personal.
Maintain a small number of objectives that you feel confident you can complete.
Keep clear data on your progress toward completing objectives.
Maintain transparency across the company on teams’ progress.
Create accountability by establishing an incentive structure in the case that teams can’t accomplish their objectives.
Make all results measurable.

Individual employees, of course, can and should have their own goals. But the OKRs, again, should be at least product team-wide, and should be uniform across the organization, so that everyone knows that they are being judged on the same broad standard as their counterparts. Naturally, this is more difficult the larger the company is. When a company is scaling up, OKRs are useful, because they’re fairly conducive to scale; you can easily add objectives and new data points to OKRs while your company is growing. During a company’s scaling process, leadership needs to make sure that all OKRs remain aligned toward the same larger goal/vision.

Product Evangelism

“Spreading the faith” is essential to success. The more people there are inside and outside the company who believe in your idea, the more likely you are to succeed. On the other hand, if you can’t excite many people about your idea, you’re almost certainly doomed to failure. Here are 10 ways to get employees excited about a product:

Build prototypes. Allow people to see what you envision rather than having to imagine it from a description.
Explain the pain. Make clear exactly how your product will make people’s lives better, or reduce their pain and frustrations.
Explain the vision. Make sure your product vision is airtight before presenting it to anyone else, and make sure that you believe in the vision yourself.
Share what you learn. Make sure that all stakeholders understand a product’s potential efficacy. Team members won’t understand the good of the product if leaders don’t share their vision.
Share credit. When you find successes in focus groups, surveys, technological improvements, or anything else, give credit to your team and other stakeholders.
Work on your presentations. Make sure your presentations to your own team, customers, and other executives effectively sell the value of the product.
Be prepared. Make sure you know everything there is to know about your product and your industry. People trust those who know what they’re talking about.
Be excited. Be aware of your own enthusiasm level—if it’s lagging, consider ways to increase it, like thinking about the final launch, or about how customers might respond.
Show your excitement. Make sure your team and your managers know that you’re excited. This could make them more excited as well.
Hang out with the team. Be sure that your team likes and trusts you. Spend time with everyone on your team.

A Note on Structure

Even when teams are functioning properly and leadership is properly overseeing the company, if there are a lot of product teams that are working on different components of the same larger product, it can be difficult to keep everyone on track and aimed at the same goal. There are a few principles to rely on that can help to fix this issue.

Leaders should communicate the vision of the company and the strategic direction down the ladder to the bottom rung of the company. Everyone should be aware of the company’s larger goals.
In order to maintain a cohesive unit, leaders should have a clear investment strategy. They should know what products or divisions are succeeding and pour more money into those, while reducing investments in units or products that are starting to stagnate.
Teams should share services and lessons learned with one another, but not depend on each other. This is a tough balance to strike, but leaders should encourage collaboration among teams while also stressing that each team is responsible for delivering on their own work and has the autonomy to do so without interference.
Leaders should keep team size between two and 12 engineers to every product manager/designer.
Develop and improve upon the structure/architecture of the company before attempting to engineer the vision. People should understand their roles and prove their competency at them before starting a huge project. Companies should also realize that in response to challenges, their structure may well change. The structure of a company should always be flexible.
A company should know what its customers want before launch, and should have specific teams targeting specific groups of customers. If a company is, for example, serving as the liaison between real estate agents and first- time house hunters, part of the company should be responsible for dealing with the agents while another part will deal with the house hunters.
Leaders should continue to stress the importance of cultivating and keeping missionaries.

Objectives and Key Results of Product Principles (OKR)