Objective key results (OKRs) - Business & Personal application | Nitin Prasad | Skillshare

Objective key results (OKRs) - Business & Personal application

Nitin Prasad, Passionate about product | Product coach

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6 Lessons (22m) View My Notes
    • 1. OKRs Introduction

      1:26
    • 2. OKRs - Overview

      3:46
    • 3. OKRs vs KPIs

      4:50
    • 4. OKRs - Business

      6:14
    • 5. OKRs - Personal

      2:37
    • 6. OKRs Summary

      3:26

About This Class

Hi all,

This class is about objective key results, a common framework used in a lot of companies. 
Here are the various topics we'll cover today

  • A brief history & background of OKRs
  • The difference between OKRs vs KPIs (Key Performance Indicators)
  • Business OKRs: How they are used in a business context
  • Personal OKRs: How you can apply them in your life for your personal goals

Objective Key Results are simple and easy to understand. 

Transcripts

1. OKRs Introduction: Hey, run its maintenance and welcome to another class. Today we're gonna be talking about objective key results and how we can use them in our business lives and our personal lives. So let's get into it. The structure. So talk a little bit about the history and background of OKRs and where it's originated from, and how it's evolved to where it is today. And then we'll go into OKRs versus KPIs, which are key performance indicators and talk about the differences between them. And then we'll look at a couple of examples on how chaos can be used in the real world and how they use in businesses. And we'll also look at how okay, ask can we use in our personal lives but setting our own personal gulps? So business OK. As I have launched a couple of products in the past, one was booked bits and another one, a web app called attend. And so I'll be talking through OKRs from, from that from those two products and how I've used them in the past to give you an example. And then we'll look at some personal accounts and how you can use them to sit your own kinda, you know, New Year's resolutions and all those common goals, common life goals that we have. 2. OKRs - Overview: Okay, Hebron. So in this class we'll look at the history and background of OKRs and what OKRs are, and we'll go through them. So let's go through them. History. So okay. Yes, go not long way back, Bernie, about 50 or 60 years ago, in 19 fifties when Peter Drucker, he came up with a thing called management by objectives. And it was a book. And it was actually the first time where in the corporate world objectives, the idea of using objectives and accompany level, and then feeding it down to an employee level and then monitoring them and then rewarding and evaluating. While the employees have carried out the goals and objectives. But it wasn't until kind of Andy Grove And he founded Intel. And also John Dewey, who joined Intel in the sixties and seventies, where John Doerr actually took management by objectives and actually took it seriously, started forming these things called a OKRs. And then he joined Google in 1999 as an investor. And that's when Google, what he kind of pushed OKRs to Google and they're using it since. And Google's obviously grown, grown from 40 employees to several thousands and tens of thousands of employees and they found it successful using your calves. But there are lots of other companies that are using our cows like LinkedIn, Spotify, Twitter, Dropbox, and as examples, you'll find a lot of background and then on the Internet and what can really going to go into any more on the history, but that's pretty much the history. So what are they? And this example here, objectives are meant to be aspirational. Short, sweet, simple, something, everyone kind of sand but differently aspirational. So this example making humankind interplanetary and you can think about how special that is making. You know, how do you, how do you make humans can travel between planets, right? That's huge objective. So for that, you've got to have key results that you're going to be able to measure. A way to get to your objective. So you know, if you reduce the cost of launching rockets, that's gonna help if you reuse launch rockets, you know about five times and that's going to help as well. And if you're going to win multiple $1 million commercial launch contracts, then you're gonna get rockets off the earth, right? So these are all really important key results, but you'll notice that the key results have numbers and metrics in them. So that's important. And you'll also know that it's kind of a big step change. So come to that in later areas of the class. So essentially again can be say lambda, so I will, and the objective as measured by the set of key results. That's essentially what they are in at a very high level. Policy will go into more examples later on. In a nutshell. So objectives are what we want to achieve and it should be aspirational. And the key results basically how you're going to measure the, measure the progress which is quantitative. And then there are initiatives below that, which you know, basically what are the tasks that things that we need to do to reach our OKRs. And these are the key activities in this class. We are going to be talking about their objectives and key results more so than the initiatives. Because you can imagine initiatives. Can the tasks or the key activities can depend, depending on the objectives. So, but it's more important to learn how to sit goods objectives and key results. 3. OKRs vs KPIs: Hey, run. So now we'll talk about OKRs versus Key Performance Indicators And the key differences between them. So as we said earlier, OKRs are objectives, aspirational objectives, right? And a way to measure them with key results. And obviously we said there are some initiative, initiatives that are required to achieve them, or key activities. What our key performance indicators that you may have heard used in the business world quite a, quite a bit, especially sit and key performance indicators that are targets for employees. While key performance indicators are literally the success mint measures themselves, so they are the actual true data point. So let's look at an example. You may know about this net promoter score. So a lot of companies or SAS companies are hearing that using this, these days to measure how likely is it that our customers are going to promote or going to be detractors to a product. So they might send out a survey. They might ask and customers to rate the product one to ten and had a good experience, I might read it. Seven rates might be passive or seller might be extremely passionate about the product and say up to ten or some people might say no but had bad, I've had issues. I might read it at three. So anyway, that might come to a score, right? And that's pretty important because you want to have people promoting your product and you want to reduce churn. So how do OKRs, but, but something like net promoter score. So but OKRs, we said it was a sitting aspirational objective. So one way to use OKRs here could be, you know, have the worlds best NPS score in a product category or in our industry, right? And then you could have KPIs and say increase in the net promoter score from 20-30, increase customer happiness from customer engagement, from experts into y. And you can really start making some improvements. But the key performance indicators, I literally discourse of the Costco could be 40 parliament and it could be okay, you know, the key performance indicator and a dashboard could be I, and this is how we're tracking. So tracking them in a dashboard and the data point isn't really going to allow you to Sydney goals and kinda how do you change it like that? And that's how OKRs really help to influence something like an MPS. Let's look at some more examples. So if, say I had a business and it was an e-commerce store and you are selling some products. We had a objective, something like this where you want to solve exceptional beauty products and 23-year-old, right? And that can be your aspirational objective. And you might, you'll have key results. So you want to introduce two new beauty products from, you know, you never had pretty products even increase it to two to generate market qualified leads, right? And you want to generate a certain number of these leads. So how many different a KPI? So the KPIs here. And I'll turn some icons and yes, it would be that actual data points. It might be the number of Facebook likes and your Facebook page number of people who have actually bought something and you know, number of beauty products sold in this case. And you might have dashboards to monitor all this. And you can see how different they are. Different. They are, the OKRs are doing a really specific thing and they're trying to help you create a step change with some key results. Whereas the KPIs are really just the indicators and the data points. It took another example. Say you want to launch a new product. And you know, it can be a web app, let's say. And you want to launch new web app and that's aspirational goal. That's fine. And that's an objective. And then, you know, that's great. But, you know, some of the key results, you really want to look at it as increased daily active users on the premium plan and you wanna increase sign-up rate because that's important. When you launch a new web app, the KPIs would actually just be the number of new sign-ups, you know, the total number of new sign-ups or total number of visits to the site. They don't really mean anything. It's just a data point and you can directly measure it. But it's definitely useful. But it's not, it's not a, it's not difficult, ok. Whether you have an actual objective and you're trying to have a step change and see some changes. Yeah. And so now I hope you understood what the difference between OKRs and KPIs. 4. OKRs - Business: Hey, run. So now we'll talk about OKRs and how they used in the real world. And we'll look at a few examples. So let's get into it. So here's an example of a product that I launched several years back, and it was called booklets. And it was an iOS app that allowed users to keep a record of all the books that they've read by kind of pointing cameras, the barcode of books, and it would automatically get the title and the author. And they could add quotes and they could do a whole bunch of stuff in the app. So we had a number of uses downloading. I had been, had active users. And one of the expression objectives that we had was how do we help users to read books more often, right? And that's aspirational because reading is good. We all know that, know that. But how do you actually encourage people to read more executives? That was a kind of aspirational goal that we had. And some of the key results that we came up with were, you know, maybe if we could recommend relevant authors uses, maybe if we could feature relevant and I'm sorry, relevant books and relevant alters, that would encourage them to read more and to find out more about these books. And we could always been monitor these by looking at the number of books that were added by the users and see if that kinda made a step change. Another objective that we had was to ensure book bits as the highest rated that what are key results? They can have their well, fairly straightforward, but the really mapped to the objective. So achieving 5-stars and the App Store, that would definitely help. That's going to help the objective. And then 0 daily crashes with early days, right? That's, and you can see here, but all of these key results, they have a quantitative aspect. They are easy to measure and they all help the objective. So that really helped us in making sure that we were able to reach our objectives. So that gave you a good example. So let's move on to another example. This is a generic product. So say you have a product out there and you've got paying customers and you've got revenue. So as you can see on the right-hand side, I'm showing that this is a generating ten hundred, two thousand, five hundred dollars per quarter, right? It's great. It's going smoothly, but you really want to see a step change. So you want to have key results like, you know, and maybe you want to introduce a premium plan to customers with, which might have a quantitative dollar amount that they pay per month. Or you want to convert 20% of your customers on free plan to premium by the end of the quarter. And he's going to key results really help because they directly affecting your objective. But what we really want to see is a step change in the results. And so what that means is, you can see on the right-hand side, I've said the revenue per quarter. I've shown that it's actually, let say we achieved a key results and we did some key activities to help a key results. And then that actually helped our objective. While you can see then that there will be a spike in the revenue and that'll be, that'll be great because then you can actually start seeing some changes in the revenue and you've actually achieved your objective. So it is important to see a step changes in results to show improvement. Another example of move on to another web app that we had a number of years ago and it was called attend. And it was a simple website like, for example, like meet up, where you had people and who could attend events and they could create events online. So it was a web app. But here in this case, we wanted to create an inspiring newsletter. And so one of the key results that we had was to improve the number of inspiring quotes and like in the newsletter. And we want to decrease the churn rate as well. We, you know, to, for it to be inspiring, we wanted to see people sticking around and using and subscribing to our newsletter. So you want to see a decrease in the churn rate. So that's an other example of how you can use OK. As. In the same sense, we also had the same app where we wanted to make an impact to impactful website for event attendees. So people that were actually go into the event, we wanted to make an impactful website. That was our aspirational goal. So you can have key results like making sure that the sign-up conversion increases, reducing the number of fields and the signup form, uploading relevant blog articles. So by making the website easier to use and more relevant content that will be an impactful website. So another example of how you can use OKRs, and they're not complicated, quite straightforward. Now I wanted to move on to common mistakes. So one of the common mistakes that you see in OKRs, inspirational objectives are important, but they also shouldn't be de-motivating efforts to simple, then that can be like Alma Thomas, a task. And it's not going to be aspirational or inspiring for anyone. So be careful of selling to simple objectives are simple objectives are too simple, too many, OK. As if you're too many, that is prioritized and they're all over the place you want to sit. You want to have at least two or three that are really important for your company. So they're not, the key results themselves are not toughness, so they're not to-do lists. So it's stepped aims that you wanna see not go do this and you must do this. And then treating them like New Year's resolutions. So it's not a set and forget either. So that's why you've got to have a small number of cows that mean a lot to you and you've got to keep monitoring them every two weeks or so and activities to make sure that you're actually achieving your key results, which will then help to achieve your objectives. 5. OKRs - Personal: Hebron. So now we'll talk about OKRs and our personal lives and a high believers as a fun part of the class because you can actually start using OKRs to achieve your personal goals. So let's look into that. We all have our New Year's resolutions and we have a life goals where we chasing my dreams and our hobbies and passions. And I know how passionate everyone is kind of chasing their life goals. So if you want to kinda get better and kinda see better results or Kazaa perfect. So whether it's to improve fitness over there to improve your financial status, OKRs can help. So let's look at a few examples. So I've used this example and I'll put an objective to say improve my cardio fitness. So this is clearly around health and it is aspirational because it is important to keep good health. And so I've said some key results here could be increased push-ups if that's an activity that you want to do from 15 to 30, or steps is either easier to monitor everyone has to have smartwatches and ways to track the steps. You could even do it on your phone. So increase from 2 thousand to 5 thousand steps that might help to reach objective. You might want to, if you're going to gym increase number of sessions that you're going simple key results, but that really mapped to your objective. You could also start monitoring and your, I guess key results. Because like we said, we're going to see a step change. So I've stayed here. You want to increase from 15 to 30. And you hopefully when you start doing that, you'll start to see a change over time. Let's say another example could be financial status. You want to improve your financial condition. And let's say I have a credit card and that's at $5 thousand and, you know, you've tracked it every year and you're paying it off that. And I'll let say some other key results. You want to reduce the number of takeaways. You want to decrease their credit card debt, you reduce impulsive buying. These are all simple key results that can map back to your objective. And again, like we said, start tracking it and to see a big step change. So here we're making big payments to a credit card means sticking to a plan to achieve our objective. And you can see it's a much bigger change than what you had before. So simple ways, but ways that you can use OKRs and your personal lives. So I would recommend you to have a go at using OERs in your personal lives. 6. OKRs Summary: Okay, so you made it to the summary. And I am going to go through the class project, as well as go through some common Q and A's that have arised through the class. So yeah, like I said, try it out for yourself. Personal objectives as a safe place to start because you can monitor it and your control, you're setting the objectives and key results. So try and come up with a person objective that's going to inspire you and motivate you. Write, keep, don't make it a yearly New Year's resolution. Makes sure that it's taken from that list of users solution and it's measured quarterly. And we'll come to that after this. So make sure you try and define three key results. And I'm older than three, and how you keep track of them and what step change you'd like to see. Yeah, and yeah, please post your project as you as you do them. So some common questions and answers. So how often are set? And that's a good question, right? Because you, as we spoke earlier, Tatas didn't forget. So quarterly is the best way to measure them because three months is a good amount of time to make progress on your objective. So who systems and the company, the company at kind of executable can be set as well as at a department level or at a team level. It really depends on what kind of goals accompany has. Who's responsible. Again, if that's a wider company objective to IPO or to reach a $1 billion revenue than it might come from the sea or from the exit. But if a team sitting it could be that you want to develop a new product and the manager might set it. So it really depends on who we're, it's coming from. And so because OKRs are not tasks that really owned by kind of Who's responsible at that layer to kind of I guess, be responsible to make sure that the objectives are met. So it's not lift with someone if the, if it's a company okay, it's not going to be left with the sum a team member to be responsible, that will be the person sitting essentially. Are there any disadvantages? Yes. So like we said, if you avoid common mistakes, they, like we said earlier, like sitting too many and making sure that, you know, that key results on our tasks, then I think you can avoid all the disadvantages. But there are obviously a lot of advantages like we spoke about. Are there any alternatives? Yep, there are. So you've got smart objectives. You have other things and really depends on what the company is trying to do, whether it's a service-based or product-based company, and whether it's to you, they're definitely different ways to achieve something. But OKRs are really clear cut way to achieve objectives and key results and beta measure them to get there. So it really does depend. There are some other techniques, but OKRs are usually really effective. So thanks for the class, and I will see you in another class sometime soon.