Topic: KPIs that work: OKRs. OKRs stand for "Objective and Key Results." They were invented in the 1970s by then Intel CEO Andy Grove. In 2017, Google co-founder Larry Page wrote, quote, OKRs have helped lead us to 10x growth, many times over. They've kept me and the rest of the team and company on track and on time when it mattered the most. During this time, many other software companies have also adopted OKRs. Google believes so strongly in their ability of OKRs to change the world, that they publish their OKR Playbook on whatmatters.com. In this see one, do one, teach one, I'll show you one of Coursera's OKRs. Then you can practice drafting your preliminary OKRs for your own product. An OKR is a single objective followed by multiple key results. According to Google, the objective is the what. It should clearly express goals that are aggressive, tangible, and also obvious when they've been achieved. Key results are the hows. They express measurable outcomes. Their completion must be obvious. There are many ways OKRs can go wrong. Google's OKR playbook includes six classic OKR writing mistakes and traps. Beyond these, another trap is having too many objectives. During my time at Google and still today, teams have no more than three to four OKRs at any given time. Now let's write the OKRs for a real software company. So as you can see, the objective here is, reach meaningful scale by achieving 5000 software subscriptions every month. Now the key result one is a 100k site visitors/month, via technical and non-technical SEO. Key result number two, improve funnel to achieve 5000 subscriptions per month, based on all site traffic. And key result three is scale product and processes to support 5,000 subscriptions per month. So, if we were to assess this OKR, let's first take a look at the what, or the objective. So the objective here is clearly to achieve 5,000 software subscriptions every month. Now if you look at the key results, do they paint a clear picture in the how, right? How are you going to achieve 5,000 software subscriptions every month? So for example, the first one lists how many total site visitors are needed from a SEO perspective. The second one talks about how to improve the funnel to achieve 5,000 subscriptions. And the last one is how to scale the product and processes to support 5,000 subscriptions per month. Key result one, pretty tangible, right? 100k, very tangible and very clear, right? It's a very, yes you meet it or no you don't meet it. Now, I do have an issue with key result two and three. Improve funnel, what does that even mean? Does that mean I have to do more outbound, more cold calls? Who am I calling? Do I do channel partnerships? It's a bit vague, right? And how do I know I have improved the funnel enough, right? Does that mean that I have to grow the funnel by 10x, 20x or more to achieve 5,000? Is it less? I'm not sure. Now if you also look at key result number three, I have the same concerns. Scale product and processes. What does that mean, right? What does scale mean? Does that mean hire more people, right, which means you are scaling horizontally. Does that mean more automation, right? Does that mean more teams? Does that, what does that mean, right? It overall is not super clear to me what scaling actually means. Therefore, if I were to rate this OKR, it would be non-passing, [NON-PASSING BUZZER SOUND] because it's not very clear. We should not be creating OKRs for the purpose of creating OKRs. They should be clear and they should also be a blueprint for how we meet our objectives. So, now I'm going to share with you all a Google template for OKRs. Please fill in one OKR for your product. Make sure the O is a goal that is aggressive, tangible and also obvious when it's been achieved. And the KRs are also measurable outcomes. Let's also review a classmate's product's OKR. Does it conform with Google's expectations for objectives and key results? So let's take a look at this template here, right? So you can start off with writing what your objective is and the owner and the status. So let's look an example that was included in this template. Right, so launch flagship product globally. So one of the key results is create dedicated landing pages. Okay, very objective, very achievable. Owner is here, Tina, right. What is the status? Second, deliver 25 pallets to our European and Asian distribution centers by February 20th. Also very clear and achievable and owner here is clearly Leo. So I won't read the next two but it seems like this one, if I were to rate this OKR, it would be a solid ten out of ten for being clear, for being objective, and for being achievable. Now let's look at how the company OKRs then rolled out into the department and team OKRs. They don't have an example here, but based on my past experience working at Google, which highly valued OKRs, we essentially would take the company level OKRs. So for example, if it were launch the flagship product globally, we would then take that into, if I were on the product team for example, enable platform functionality. And then of course, I would have corresponding KRs here. And then into individual OKRs, so for example, as let's say the head of product for this team that is responsible for the platform functionality, I would be in charge of enabling my team, ramping up any new hires, and making sure the team is on schedule for hitting that milestone for launching the platform feature. So do you see how everything really cascades down from company to then department and team, to individual OKRs?
