And here’s a fun twist—you have to pick one at a time. That’s right. One of the things that makes OKRs effective is that they keep the team focused. When you try to meet too many objectives at once, you’re going to fail at all of them. “People can’t hold that many things in their heads,” Christina said. “One OKR you can remember, you can focus on, you can commit to.”
Even when you restrict yourself to one OKR, moving an important number can take longer than you think, so make sure that you’re picking a focus and a time frame that’s long enough to make a dent. You don’t move an enterprise business into China in a week. Give yourself time to get a few things wrong and correct them.
STEP 2: Generate Key Results
Once you have the objective for your project, you’re going to pick your key results. To do this, you’re going to need your team and some sticky notes. Give everybody a packet of sticky notes and ask them to write down, without discussing it with each other, every single metric they can think of for understanding if you have a market foothold in China—or whatever your specific objective is. You’ll have them spend five minutes doing this.
Have them think about different categories of metrics. Christina suggested trying to write metrics that reflect revenue, market acquisition, and retention.
For example:
• Acquisition: “Acquire five new paying customers in China in Q1.”
• Revenue: “Create $5 million in new revenue from China next year.”
• Retention: “Reduce churn of current customers in China by 50%.”
Obviously, your specific metrics will be very different, but you’ll notice that all of these are quantitatively measurable, and they specifically help the company understand if it’s getting closer to its primary objective of increasing market share in China.
You’re not just going to generate three metrics during this previous step. You’re going to generate a lot of them, hopefully. Five minutes is a very long time, and you should have everybody on your team participating. There’s a reason for this.
“The one thing I wish everybody who worked on my team understood,” Christina said, “is what success means to the company. Designers. Engineers. PMs. Some don’t understand how the company makes money, and it’s shocking.” Getting everybody to generate ideas for metrics gives you some insight into whether your team understands how you could really measure whether you’re getting closer to your most important business goals. “Everybody needs the whole picture. They need to know the context in which they’re working.”
STEP 3: Prioritize
Once you’ve got everyone’s metrics suggestions, you’re going to go through them together, get rid of the duplicates, and start dividing them up. How you divide them up is up to you. You can bundle them by how hard they are to measure or how accurate they are or whether the team feels they’re stretch goals. But it’s important to understand them all.
Your job is to pick three key results that you feel you can track over the next quarter to understand whether you’re making progress. You shouldn’t pick them all from the same category. You don’t want three revenue metrics. If you choose only revenue, unscrupulous employees may game that number at the expense of other key metrics, such as retention. Pick metrics that balance the others, such as one that reflects revenue, one that reflects customer satisfaction, and one that reflects acquisition.
At this point, you’ll also want to give some thought to what Christina called “health metrics.” These are the metrics that you’re not going to let go to hell while you’re moving toward your goal. In other words, if your main goal is growth in China, you shouldn’t let your revenue from all other parts of the world suffer as a result of it, unless that’s an intentional sacrifice that you’re making short term. If you’re trying to improve revenue, you shouldn’t ruin your long-term retention metrics to do so. What your health metrics are is up to you, but make sure to pick at least three. There’s more information about picking the right metrics in Chapter 11.
STEP 4: Track Your Progress
The final step of this process is the one that almost everybody screws up, because it’s the hardest one. Everybody loves setting objectives and figuring out the key results and health metrics they’re going to track. That’s the fun part.
The hard part is being disciplined about tracking how you’re doing and adjusting and iterating when you’re not meeting your goals. That’s why you need a weekly metrics review for the entire team where you look at all the key results to see if they’re improving and to figure out what everybody’s doing to make that happen.
In fact, one of the most powerful things about OKRs is that you’re eventually going to set different objectives and key results for each team to make sure that they’re working toward the goal.
If you’d like to learn more about setting OKRs for your company, team, or individual team members, you should read Christina’s book, Radical Focus, Achieving Your Most Important Goals with Objectives and Key Results.
PART II
The second piece of the puzzle is developing empathy and understanding.
Empathy
Over the course of many years helping teams build products, I’ve met a lot of what could politely be called “business-oriented” product managers. There is nothing wrong with being business-oriented. After all, this model started with identifying a business need. I care about building products that are good for companies.
The trick is that you can’t just care about the business. You need to care about the humans who are the customers of your business as well. More than that, you need to understand them.
You can’t reach your own business goals without understanding the people that those goals represent. This section will help you understand your users and their needs so that you can build a product that’s better for them.
CHAPTER 2
Understand Your User Better
Exercise: Provisional Personas
Exercise: Identifying Problem Patterns
The Dangers of Defining Your User