OKR and cascading targets

OKRs are useful when giving the team direction and freedom to choose how to achieve a result. Objective sets a meaningful change, Key Results measures its effect; the list of projects and releases is better kept separate, otherwise the execution of the plan is easy to mistake for achieving the goal.

What is OKR and why are they needed?

Definition of OKR

OKR stands for Objectives and Key Results, a goal setting system that helps you focus on what matters and measure progress. It consists of two parts: a goal (what to achieve) and key results (how to understand what you have achieved).

OKRs make strategy an informal slogan, they make it a work tool, and they have to be transparent to the whole team.

The example of OKR at the strategic level

Objective: increase the share of the product in the market among small businesses Key results:

1. At least 10% of the SMB market in the region
2. Increase the number of registrations by 35% in the quarter
3. Improve NPS score among new users to 50

Why OKR is important for strategy

Without OKR, even a strong strategy risks being left on paper, companies get stuck, priorities get lost, focus shifts to quick-impact, but low-value tasks, and through OKR, companies translate intentions into a managed plan of action.

For more on the subject and implementation, see Google’s OKR guide (https://rework.withgoogle.com/guides/set-goals-with-okrs/steps/introduction/)

Cascading principles: from strategy to objectives

How the cascading of goals works

Cascading is a way to bring key goals down from the top level to subsidiaries or company levels, and one CEO goal can be broken down into departmental goals, then product teams.

Cascading only works if:

• The goals at the levels do not duplicate, but develop a top-level strategy.
• Each unit knows what will be really affected.

Example

CEO’s Task: Getting to the Top 3 Mobile Bank OKR of product:
Objective: Become a leader in mobile experience Key Results:

1. Achieve an average score of 4.7+ in the two major constituencies
2. Reduce churn new customers by 20%

Teams lower these goals further: Development - to work on reviews and to have time to release with 3 requested features. Marketing – Focus on campaigns for new users.

Cascading errors

The biggest mistake is to apply the same set of goals at all levels, and another is to not give teams the space to take action and deliver.

Prioritization and OKR: Emphasize

Why is OKR needed for prioritization?

OKRs show what’s important to do now and what can be put off, and through them, teams prioritize: a task that doesn’t lead to Key Result is usually put into the backlog.

Application in practice

The quarterly OKR review helps managers quickly decide which projects to take on and which ones to take off. In problem arbitrage, the solution is often simple: Does this feature increase our NPS, as in key results? No, we take priority off.

For the product manager, OKR has a built-in filter for building a roadmap, and all initiatives should lead to measurable results.

Atlassian guide to OKRs

Anti-Prioritization Patterns with OKR

The classic mistake is to build a roadmap and backlog only out of incremental improvements, completely ignoring ambitious goals. Another is to pull all current tasks into the OKR formulation so as not to change anything in the real work.

Linking OKR, Strategy and Product Management

OKR as a bridge between strategy and operation

OKR is a working tool that connects high-level strategy and daily tasks, helping management see progress toward goals, and helping teams focus on what really changes the picture.

Example of use for product management

If the strategy is to be the most convenient service, OKR at the product and team level, they detail this: they work with time-to-conversion metrics, NPS, retention. Teams know why they’re spawning this or that feature, and they can honestly tell top management: this is what we achieve, this is what’s in the way.

How to Measure the Success of OKR and Avoid Mistakes

Control metrics

They often look at the percentage of key results, but it’s also important to assess whether OKRs have become a focus tool, and they do retro sessions to talk about what initiatives have contributed most, what has hindered, and what hypotheses have failed.

Implementation errors

Too much detail demotivates the team, so if OKRs become a separate reporting form rather than a prioritization tool, the system starts to stall, and it’s also a mistake to ignore feedback when the targets are really outdated due to the changing environment.

FAQ

How to choose the right level of ambivalence for OKR at the strategic level?

The principle of moonshot is that the goal should be motivating and challenging, but it should be attainable with hard work, and if everyone achieved 100%, the goal was too simple.

How much OKR should a product or team have?

Practice is no more than 3-5 objectives and no more than 2-4 key results for each, more than the team is sprayed and loses focus.

Should the OKR change during the quarter?

OKR is set for a fixed period, but as external changes change, key results can be revised, so the key thing is not to change goals too often, otherwise the focus is lost.

How to connect product metrics and OKR?

Choose the most important product metrics for your key results by strategic focus, like retention or NPS if the goal is quality growth, or MAU growth if the goal is reach.

What is the difference between OKR and KPI?

KPIs capture the current performance of routine tasks, while OKRs focus on qualitative growth and breakthrough change.

How do you get OKR to all teams?

Use regular all-hands or letters of explanation, conduct Q&A, make sure that each employee understands how their tasks relate to the overall OKR.