Laying down the strategic framework for your Objectives and Key Results (OKR’s)?

Choosing the right Objectives and Key results for your product is one of the most complex discovery processes, and this is where the skills of the Product Manager is tested thoroughly.

In order to choose the right Objectives and Key Results, one must be very clear on the product strategy to pursue. The product strategy is really the game plan with two clear outcomes - to compete effectively for customer mind-share with compelling value proposition, and revenue maximization .

So how do you choose the most important objectives for the product team. There are two steps to discovering and framing your OKR’s – the first step is the Product Discovery step, and the second is the objective qualifier step.

Product Discovery is the key process to finding a sustainable Product driven business model. If you find yourself in the “luxurious” position of being a Product Manager at a startup (0-2 years), then you are in charge of complete Product Discovery - it is extremely demanding, fun, and fulfilling, as there is little baggage to contend with.

If you are in a product organization that is in the growth or maturity phase, Product Discovery has already happened to varying extents, and, unless there are clear indications for the need of a pivot (or change in direction), you are really looking at feature discovery. However, the same decision process for OKR framing also applies to major feature discovery as well.

The process of Product Discovery is really an analysis of the value of numerous opportunities -

1) Demand – Is it a benefit for the customer that can drive significant demand? This is by far the most critical decision. It requires extensive user research and domain specific research. If you have the demand generation established, the rest of the steps are just process

2) Competition – Is there a gap in the competition with respect to this objective, that can be targeted, i.e., is it an un-served need

3) Capability – does the expertise required to build this capability fall within the core competency of your organization

4) Communicable – Is this benefit communicable? Can the users understand it? Can this be marketed, amplified, sold to?

Once your product discovery analysis, the next step is the objective qualifier. The objective qualifier defines the game plan or product experience of how you want to engage the customer.

Most IT SAAS products are playing one or more of the following strategy games –

1) The Engagement game – maximize the time the user spends with your product. e.g. Amazon Prime video, Craiglist, Facebook. The value created is the engagement, satisfaction for the user as he/she spends time on the site, without having to go anywhere else. The more time spent, the greater is the long term revenue potential. How that monetization happens will be additional sub-strategies to think through.

2) The Transaction game – maximize the number of transactions the user makes on the site. Eg. Amazon, Walmart, Grofers. Here the key focus is on the transaction and not on the time spent, as customer value is created in how smoothly the customer checks out with the needed items.

3) The Productivity game – maximize the productivity of user by automating or optimizing their business process, e.g. Salesforce, Adobe, ServiceNow. Here the work profile and process characteristics of the worker is of highest importance, as the product cuts sub optimal time spent, the more time saved, the better, time spent on the product is un-important.

4) The Insights game – help the user to gain insights or visibility into the health of their business, e.g. Splunk, Amplitude, Google Analytics. Here, transactions, are not important, but the transactional data needs to be available. Also, the time spent on the product is unimportant, the value of the information produced is paramount.

For every Product market, there is opportunity to play in one or more of the above-mentioned engagement plans. When you are starting out, you will have to decide which one you want to play first, based on the customer profile, the value proposition and competitive positioning. Later, you can extend to additional plans. Once you have decided on your game plan, you need to frame your objectives and key results in the context of both the product strategy as well as the objectives qualifier.