OKRs And Key Metrics

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This is a summary of the OKRs and Key Metrics lecture by Akbar Maulana (AI PM)

If you have a vision and a strategy, that’s so big and abstract….

How your day-to-day task will actually be?

What’s the indicator? How to measure the performance?

When you just throw random KPI to your team (be like)

And no…

We don’t just set KPIs or Objectives (OKRs) randomly

It’s all aligned depending on the vision and the strategy that we have defined before. See this post about product vision & strategy

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Product Objectives measure how well you’re executing the product vision and product strategy (Quantification of whether the strategy is being executed well or not)

p.s this is an image that I found on Medium, but we can add “strategy” as the prerequisite before the objective.

What are OKRs?

OKRs stand for the objective and key results

Objective simply what we want to achieve

While key results are how will the objective is measured whether achieved or not

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The OKRs Formula I will objective as measured by key results

The Objective is qualitative (provide clear value for the company)

And the Key results are quantitative (e.g. number, %, amount, $, time, etc. that show outcomes, not activity)

3 Types of OKRs

Aspirational (focus on growing or stretching)

Committed (focus on results, passing grade)

Learning (focus on learning)

What’s the difference between OKRs and KPIs?

OKRs are measures for change, while KPIs are measures of health.

OKRs are more action and goal-focused, while KPIs are more on perf. checking

OKRs are usually set quarterly while KPIs maintain to be long-term.

Some say OKRs are more start-up friendly because of their flexibility of change while KPIs are for the already stable corporate that maintains performance

The OKRs philosophy, amta

Ambitious

Measurable

Transparent

Aligned

Now, where do OKRs come from?

It can be derived from a breakdown of north star metrics

derived from the product strategy itself to become product objectives

or from the metrics framework (Pirate AARRR, more into it later)

North Star Metric

While the “objective” is to measure if we execute the strategy well.

North Star Metric acts as the quantification of product vision & strategy.

Whether we perform well or not.

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North Star Metric

Metrics that best represent the company’s performance in the market

NSM can be defined from

User Problem (What does it solve)

Product Vision (What does it do for the user)

Because NSM may derive from product vision, it is usually still very broad/general

NSM can be broken down into multiple metrics

For example, the NSM of time spent watching content

can be broken down into

Reach x Engagement x Frequency

These metrics later can become a key result in the OKRs setting

While the objectives can be derived from the product strategy that also adds value for the NSM

Example (hypothetically)

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#OKR 1: Simplify the process for people to watch a movie

Gain 20% more monthly paying users (Reach)

Increase Avg. hours watched per session into 1.5 hours (Engagement)

… (what do you think?)

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#OKR 2: Increase the variety of movies for people to watch

Increase session watched into 5 sessions per week (Frequency)

… (what do you think?)

… (what else?)

The above example shows an alignment between the North Star Metric and the product strategy that makes everything chunk-able into actionable OKRs

Executing these objectives will add value to the NSM because of the alignment.

Good NSM emphasized value for both users and the company

What’s the difference between North Star Metric and One Metric That Matters?

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North Star Metric (NSM) is the number on which your entire company focuses to achieve long-term growth during a period of several years to infinity.

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One Metric That Matters (OMTM) is the number on which one team focuses to achieve rapid growth for a period of 2 to 6 months.

From NSM, its metrics can be derived into OKRs that chunk-able while making sure every team working in the same direction, focused, tracked, and is aligned with the same vision.