Product Practice #307

How to Turn Company OKRs into Product OKRs

READ ON ​HERBIG.CO​

PUBLISHED Feb 2, 2024

READING TIME 4 min & 30 sec

​Dear Reader,​

Happy 2024 (if we can still say that 😅)! I hope you had a great time over the holidays. Personally, I enjoyed the time off with my family during Christmas. In January, I spent time by the sea, made the most of the snow we got with my son, inspected the location for our wedding in March, and was focused on hosting my 3-day in-person Strategy/OKRs/Discovery workshop in Berlin.

But now I'm more than happy to be back in your inbox and to tackle practical topics in each issue. Having said that, let's dive into today's newsletter:

There are two fixes when teams can’t influence their Key Results because they are out of reach:

1. Expanding their Sphere of Influence through shared OKRs​
2. Shrinking the out-of-reach KR into their Sphere of influence​

This newsletter is about the latter.

Let’s look at a large e-commerce product:

One of the company-level KRs is to “Increase the conversion rate from homepage to completed confirmation by 7%.”

Between the homepage and the purchase confirmation page, the “ideal” user journey might consist of five steps: searching for a product, viewing a product detail page, adding the product to the cart, starting the checkout, and completing the checkout.

For every team responsible for site sections along the journey, setting up their KRs with tiny contributions to the overall +7% might be the obvious choice. For example, the checkout team might want to contribute 3% since they are the closest to the final purchase.

But that’s a loser's game since the general conversion rate increase depends on more than “just” what’s within the zone of control or even the sphere of influence of this (or any individual) team. No matter how you slice it, the overarching KR will always only remain within the area of contribution for any particular team–rendering any broken down KRs of that metric pointless since the team can’t use it to measure THEIR progress.

Instead, the checkout team needs to shrink the company metric by reinterpreting the intention expressed through the KR along their zone of control and sphere of influence.

For example, they can INFLUENCE the time spent on the checkout page, the payment validation error rate, or the conversion rate from checkout started to complete.

They can also CONTROL the number of mandatory address fields shown, the payment methods offered, or the checkout's loading time.

Let’s assemble the pieces:

The Area of Contribution consists, among others, of the Impact Metric: “Increase the conversion rate from homepage to completed confirmation by 7%.”

Within their Sphere of Influence are Outcome Metrics, such as “Reduce time spent to complete address and payment details by 13%.”

Within their Zone of Control are Output Metrics like “90% of all requested payment methods are available in all markets.”

HOW TO PUT THIS THEORY INTO PRACTICE Get Clear on the Company's Intention by finding the intent beyond the metric that sits within your KRs. Understand your Sphere of Influence and Zone of Control by mapping out your responsibilities relative to the company and other teams. Shrink it into your Sphere or Zone by lining up the metrics that correlate with a contribution to the company's intention AND that you can own with integrity. Make these your team OKRs.

Thank you for Practicing Product,

Tim

How to Dive Deeper into OKRs

Learn the strategies and tactics you need to use OKRs in a way that helps product teams prioritize work based on user problems and business goals—instead of replicating existing feature backlogs.

My Outcome OKRs for Product Teams Course enables product teams to use OKRs as a tool for decision-making in the context of Product Strategy, Product Discovery, and Scrum. Without the fluff, but with a focus on practicality in everyday work.

Learn more about my OKRs Course

Content I found Practical This Week

What I hate about OKRs, and what to do about it. Ever looked at your OKRs mid-quarter and realized, ‘sh*t we haven’t done anything about this one.’ You’re not alone. My advice for preventing this pattern is to bring OKRs into the same place where your team is doing the work. For teams using Coda, that often means embedding company tracked OKRs into their team hub. There are many ways to do this, but you’ve got to figure out some way of pulling OKRs into the ongoing cadence and artifacts that the team lives in everyday. Another way is to automate sending out your metric or OKR dashboard, instead of relying on busy people to regularly visit it.. Read it here

Why OKRs Do Not Come First Ok, what’s the point of this? In my opinion, OKRs are dangerous. It is yet another framework that has very good intentions and makes total sense but in reality, it seems to me that more likely people will get it wrong. The vast amount of articles on OKR antipatterns and the consulting business built on getting OKRs right is a sign of that. It may also not be the framework itself that is evil. Since Google used it, everybody wanted to use it to be as successful as Google or at least demonstrate it to their candidates in the interview process. Such trends are especially attractive these days when so many are hoping to replicate a success story by just mimicking the parts that are easy. Read it here

Hot Take Alert #10: OKRs Like all frameworks, OKRs are a tool that you can leverage to address a set of problems that you’re experiencing or about to experience in your organization. The reality is that if you don’t have these problems and you don’t see them on the horizon, then maybe you don’t need OKRs yet (or ever!). And introducing them actually injects unnecessary work into the organization. More motion, less progress. Read it here

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Who is Tim Herbig?

As a Product Management Coach, I guide Product Teams to measure the progress of their evidence-informed decisions.

I identify and share the patterns among better practices to connect the dots of Product Strategy, Product OKRs, and Product Discovery.