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The hallmark of high-performing teams is their ability to effectively set, execute against, and predictably achieve the right set of ambitious goals. A company full of exceptionally operating teams can be the driving engine that separates companies that thrive from those that flop.
Easier said than done. The biggest failure point to product strategy comes not from the strategy itself but from a lack of successful execution on meaningful goals that ladder up to it. Many teams focus on the shallow task of moving metrics rather than the deeper task of understanding how to create value.
Luckily, that’s fixable. To effectively frame, communicate about, and track progress against your goals, you don’t need endless weeks of planning or fancy tracking tools. You need good habits coupled with the building blocks that lead to excellent performance: strategic clarity, well-defined commitments, and an actionable path to your destination.
About the Authors
Ravi is the Co-Founder and CEO of Outpace and an active angel/advisor in consumer tech companies. His focus includes social, gaming, travel, healthcare, and marketplaces. Previously, he was an EIR at Reforge, CPO @ Tinder, and a product leader @ Meta, Tripadvisor, and Xbox.Learn More
Natalie Rothfels is an Operator in Residence at Reforge and runs a leadership coaching practice. She has held product leadership roles at Quizlet and Khan Academy and was a classroom teacher before that.Learn More
In this post, we’ll share concrete steps you can take to:
- Understand the root causes of ineffective goal setting.
- Set, communicate and track quarterly product team goals with the Narrative, Commitments, Tasks framework.
- Nurture the habit and skill of successful goal-setting within your organization, which will compound as you scale.
- Move away from the theater of contrived performance and towards real strategic progress.
The Vicious Cycle of Ineffective Goal Setting
First, let’s just normalize: Goal-setting is notoriously complex. It requires teams to excel across opposite ends of the strategy-vs.-execution spectrum. You need:
- A clear understanding of strategy. (What are we trying to achieve and why?)
- Thoughtful decision-making. (What’s the right objective in the first place?)
- The ability to create a pragmatic plan. (Is this achievable, do we have the right resources to get there, and what’s our actual charted path to the destination?)
- The right environment that allows you to effectively do the work, including support from leadership to set the right goals and the autonomy to achieve it without constant thrashing. (What are the structures and processes that make it easier to actually get stuff done?)
- The motivation to stay focused on what matters. (Why am I doing this in the first place?)
- The emotional regulation skills to navigate tough terrain. (Why is this so hard, and can we quit already?)
It’s a recipe that requires navigating a tricky blend of human biases. Any weak link in this chain can send folks into a vicious cycle of ineffective goal setting.
Here’s how that cycle can look: Teams set lofty goals, often to impress leadership, without also establishing actionable commitments that will enable the team to actually achieve the goal. When inevitable failure comes, teams lose credibility and maybe even start doubting their own skills. Leadership ends up explicitly or implicitly exerting even more pressure for the team to perform and then, when pressure mounts, the goals tend to become even more ambitious and even less feasible, perpetuating the vicious cycle.
When multiple teams are locked in this cycle — or when cultural incentives actually perpetuate it — companies find themselves doing a lot while accomplishing very little.
5 Common Mistakes Teams Make When Setting Goals
This vicious cycle is the product of a common set of problems. You’ll begin to see these everywhere, once you know where to look:
1. Orienting around high-level objectives without factoring in causal levers.
Product teams are often given a lofty goal like “Improve retention by 5%” without any clear path for how to get there. Leaders who assume teams will figure it out are delegating strategy, not enabling execution. This leaves teams rudderless.
Some of these directionless teams will focus on short-term tactics to hit goals without clarity on which investments will have outsized impact, commonly leading to frankenstein user experiences, few strategic insights and little long-term product defensibility. Other teams might try to do the right thing, spending significant time at the start of a quarter carving a believable path towards the target outcome, but then face impatience and pressure from leaders eager to see outcomes delivered quickly.
There’s nothing wrong with trying to improve retention by 5%. But teams also need to align around a pragmatic plan for how to get there, rather than throwing spaghetti at the wall to see what sticks.
Former VP of International at Credit Karma Valerie Wagoner describes this issue poignantly:
We had newly defined metrics tied to strategy, but there wasn’t full fluency or conviction throughout the organization on why that metric mattered. So Monthly Business Reviews were a reporting exercise but where people didn’t fully understand the levers of the core metric.
- Valerie Wagoner, Head of Product, APAC, Stripe.
To avoid this wishful thinking trap, focus on framing goals effectively to know what the right things are to do in the first place. The team’s higher-level retention goals should also factor in the causal levers that influence retention (such as cohort segmentation, feature usage, value proposition, value communication, natural frequency of usage, product quality, etc.) in order to focus their efforts on the influenceable ones that matter most. For example, before goal-setting around improving retention, teams should know what retention is composed of, which levers are likely to move it, and which solutions effectively pull those levers.
2. Focusing too much on outcomes, and not enough on progress.
Teams need to set the right type of goal for the current stage of development. Many teams over-index on outcome-based goals because they’re seen as the ultimate sign of business impact — and misaligned incentives don’t help. Performance reviews, promotions, and access to leadership are often contingent on hitting outcome metrics.
But moving a metric is not inherently valuable without broader strategic context. Teams working on a brand new product won’t have the depth of understanding for how to hit lofty outcome goals until they’ve shipped the product. Teams working at scale with many customers may consistently hit outcome metrics but are still not guaranteed long-standing company success. For example, vacation rental company HomeAway consistently achieved their most important outcome metric — increasing bookable listings — but failed to understand the changing consumer needs that Airbnb capitalized on, leading to HomeAway losing their position as market leader.
Instead, smart teams know which of the four types of goal is needed based on the stage of product development:
- Discovery goals can deliver insights that inform an impactful strategy
- Input goals secure reliable resources to make progress against that strategy
- Output goals help enable flawless execution on the strategy
- Outcome goals prove that the strategy has intended impact
Product leaders should encourage goal-setting at each of these four levels, and teams need to be incentivized and rewarded for the right framing depending on the stage of product development.
3. ESTABLISHING SET-AND-FORGET Goals, leading to a lack of commitment and follow-through.
The problems we’ve discussed so far lead to poorly framed goals that lack a believable plan. But even if the goals are framed well, they are often set-and-forget, making it hard to know if things are on track.
Some teams get busy in the milieu of daily activity, and don’t resurface until the end of the quarter to evaluate if they’ve hit their target. Having only one or two check-ins per quarter leaves far too much latency between the time the goal is set and when an adjustment to the plan may be necessary.
Other teams set goals as a ritual exercise but then ignore them because the goals are unreasonable to begin with. It’s painful to track something you know you can’t achieve, so goals fade into the background and goal-setting becomes a political process rather than a meaningful influencer of daily actions.
4. Failing to create cross-functional alignment by siloing goals inside departments.
Organizations tend to goal-set by function to mirror their org chart. However, an imperative like “Grow new users by 100% YoY” is very likely a cross-functional effort (including marketing, sales, product, engineering… among others), not just the outcome of a singular person's work.
Companies that silo their goal-setting processes and attempt to reconcile or consolidate them later tend to skip over critical dependencies or make overcommitments without the right resources to achieve them.
Siloed goals are one of the biggest challenges inside companies. Usually the product team has goals that get them to 95% capacity. The Marketing team has goals that get them to 95% capacity. Neither team shares goals at all, but in order to achieve them, they actually have tons of dependencies on each other. Instead, they often should be collectively owning a single goal and given the space and resources to do the variety of cross-functional things required to achieve it.
- Adam Fishman, EIR at Reforge, former Chief Product and Growth Officer at Imperfect Foods, VP Product & Growth at Patreon
When each function owns their own goals, teams often end up in competition with each other rather than collaboration. Instead, cross-functional teams should collectively set goals and co-own the outcome, knowing that success will require collaboration.
Setting cross-functional goals well takes the initiative of one leader to rally others. If you are not going to be this leader yourself, then encourage someone with the right ability to influence to play that role. As GM of International at Credit Karma, this was clearly defined as my role. However, both at Twitter and Stripe, I was officially accountable for only Product, but I created and drove cross-functional goal setting, starting with country or region focused strategies and goals first, then ensuring cross-functional strategies rolled up to those.
- Valerie Wagoner, Head of Product, APAC at Stripe
5. FAILING TO SET Consistent habits with thrashing goal-setting processes.
Because people find commitment scary and overwhelming, planning can often turn into a substitute for certainty when instead it is a proxy for confidence in a plan.
Without this confidence, goal-setting becomes an exercise of trying to find and refine the most perfect metric quarter-after-quarter. If the team doesn’t achieve, leaders will go back to the drawing more and redefine the metric, ultimately causing more thrashing and uncertainty.
This robs teams of the ability to form consistent practices and habits. Worse, it breeds a sense of distrust around the goal-setting process itself.
As you move into the OKRs vs. NCTs section of the post, access this template to have a place to document yours as you learn about them.
OKRs Don’t Correct the Cycle — Sometimes They Perpetuate It
OKRs have become the most widely used framework in tech companies for goal setting. Developed in the 1970s by Andy Grove and later heavily evangelized by John Doerr in his book Measure What Matters, they were designed as a way to frame audacious goals and ensure organizational alignment.
Objectives are intended to be what you want to accomplish. When well-crafted, they ought to be significant, concrete, action-oriented, and inspirational. Key Results begin to explain how you’ll go about achieving the objective. They ought to be specific and time-bound, aggressive yet realistic, and measurable and verifiable. But as John Doerr mentions in his TED Talk, Why the secret to success is setting the right goals, the whyis a critical aspect of goal setting, yet it is missing from the native OKR format.
That purpose-driven context is exactly what cross-functional teams need to achieve their goals. OKRs can be a fantastic and flexible tool for individuals or entire companies. But they were not designed to be a complete system for cross-functional product teams. As a result, many cross-functional product teams struggle to effectively implement OKRs because the framework doesn’t fully solve for the complexity of a team that needs to account for cross-functional strategy and company-wide dependencies.
NCTs Provide a More Complete Goal-Setting System
We’ve seen countless cross-functional product teams struggle to frame and achieve their goals, even those who have operated on OKRs for many years. Narratives, Commitments, and Tasks (NCTs) were designed not only to solve these common execution issues but to provide teams with a more predictable, more motivating, and more self-reinforcing system for getting work done.
For many people, goal setting becomes fun to track when you know it’s something you actually believe you can accomplish, with a system that helps you get there.
What are NCTs?
NCTs are a three-part framework for setting better goals, using narratives, commitments, and tasks. Here’s how each piece of the puzzle functions:
The narrative is a one- or two-sentence qualitative description of what the team/pod wants to achieve in a quarter. It describes the outcome and why it is so important to the business. Critically, it maps the goal back to the product and company strategies.
A narrative done well will help provide the strategic context and guardrails that allow individuals to make better decisions because it provides a broader and clearer picture on what matters and why. This is especially helpful for both framing and communicating about your goal.
Here are some examples of well-crafted narratives:
- Today, travelers navigate Tripadvisor using Google often leaving and re-entering Tripadvisor multiple times in a day. We can build a more retentive user experience by enabling them to organize, share, and access all their trip content, no matter what device they are on, or where they are in their planning journey. As a first step, we’ll increase awareness and usage of the “saves” feature and new trip plan feature
- Students come to Quizlet to study for not just one class but for multiple classes at the same time. The classes are new to them each year, but the content they’re studying is not...it's studied by thousands of students already on the platform. We can help students fast-track to finding and studying everything they need for the semester if we know what school and courses they’re taking so that we can effectively match them to the right content. We’ll start by improving the recommendations we’re making to current students while starting to ask new users about their school and course affiliations.
Commitments are objectively measurable goals that the team is committing to achieve by the end of the quarter, and you should have roughly three to five of them. Commitments are the evidence that the team has made progress on the narrative.
Commitments should flex to accommodate whatever milestone or measure best captures the stage of progress the team is focused on achieving. That is, it may be more advantageous to work on an input goal like “Understand the main levers that have causal impact to moving retention” than an output goal like “Deliver new user onboarding” or an outcome goal like “Improve new user activation from paid marketing by 20%.”
Here are some good, measurable commitments:
- Increase number of unique savers from X to Y by the end of Q1
- Increase saves per saver from W to Z by end of Q1
- Increase 7 day repeat rate for overall traffic (due to increased save usage)
- Understand the requirements to provide at least one recommendation for 80% of all US-based high school courses
- Increase conversion to study on content recommendations from A to B by end of Q2
- Launch new Courses flow across platforms by end of Q2
Tasks lay out what work might need to be done in order to complete the commitments and achieve the narrative. The list of Tasks does not need to be exhaustive—it is the team’s best estimate of how to achieve its Commitments and will likely evolve during a quarter.
At the end of a quarter, if all your commitments are complete but none of your tasks are finished, that's a win. If all of your tasks are complete but none of your commitments, that's a failure.
It’s much easier to track progress against a Commitment when you can break down tasks that align to your daily work.
Here are a couple of examples of achievable Tasks:
- Launch new backend saves service
- Launch saves funnel health metrics dashboard
- Test suggesting defaulting trip names
- Single factor test save icon
- Design new course pages
- Test usability on new course-navigation
- Build proper event tracking for course page interactions
- Index courses in ElasticSearch
How to Set Better Goals with NCTs
Narratives help teams ensure the connection between goals and strategies, while commitments provide clarity about what you think the next “unlock” is to make progress against the strategy. Then once narratives and commitments are framed, tasks ensure a coherent and actionable plan.
Implementing these new frameworks and habits requires an understanding of both process and psychology. Let’s talk through what you need for both.
NCTs are best used at the team or squad level, not at the company or individual level. They’re great for initiatives that require cross-functional work with shared ownership.
1. Embed your strategy into your narrative.
The biggest benefit of NCTs is that they provide more connective tissue between strategy and execution, and that’s why framing your goals effectively is the most important step.
The disconnect between strategy and execution is common because leaders think it’s their job to define what to do and their team’s job to hit goals that can be held accountable for.Instead, start withstrategic context and define narratives based on that context. If it’s not clear what your strategy is, it doesn’t matter what your goals are.
Brian Balfour, CEO of Reforge and former VP Growth at HubSpot, describes this common disconnect between strategy and goals well.
In the early days of starting the HubSpot Sales product, we set WAU goals purely based off of our quantitative growth model. The problem was that the goal was missing a key piece of the overall company strategy - to focus on customers in the "mid-market." We hit our WAU goal, but many of the users ended up being in a segment of the market that wasn't aligned to the company strategy. It was a "win" from a pure goals perspective, but failed to move the company strategy forward. Had we taken that into deeper consideration we would have set a different target for WAU.
- Brian Balfour
Narratives provide a long-term picture of what matters most, reducing the amount of thrash teams experience quarter-to-quarter.
2. Align your commitments around a clear destination.
Choose commitments optimized for where you’re at in the product development cycle. We advise you to frame commitments that are one step beyond your current level of confidence. For example, if you know that customer onboarding is an important driver into 7-day retention but haven’t generated believable hypotheses about how to improve onboarding, set an input goal to understand the top five opportunities to improve onboarding.
3. Dedicate time to crafting your tasks.
This is actually where the bulk of the planning cycle ought to be spent, as Tasks are the currency of meaningful action and are the best reflection of your current understanding of how to hit your Commitment. Because Tasks ladder up to Commitments and Narratives, tracking progress is inherently about strategic outcomes, not about excessive show of movement in an ultimately meaningless direction.
NCTs helped us move the question to the squad from when you are delivering it to what impact you are committing for. Most product teams struggle with the question from stakeholders asking them 'when' they are shipping as against 'what impact' are they delivering. It was largely due to framing the deliverables of the product team with the impact that they are delivering. With the arrival of NCTs, each feature was clearly mapped to commitments.
- Viveck Kumar, VP of Product at PropertyGuru Group
Well-crafted tasks help define what milestones and resources are going to be necessary to arrive at your destination. It’s not critical that you get everything right upfront, just critical that you have a believable plan.
4. Establish rituals for tracking your progress.
Both narratives and commitments help develop a shared language that facilitates more meaningful progress check-ins at every level of the organization.
While tracking is helpful for accountability, it’s more important for adaptability: Teams need to know when they’re stuck to ask for additional support to move forward. Regressions and roadblocks are leading indicators that hurdles need to be knocked down, not hidden. It’s all too common for people to stop tracking when the path changes. If anything, this is the most important time to continue tracking because it’s critical to ensure your new direction actually works.
Straightforward rituals focus on course-correction and understanding, not performance evaluation. Reforge’sProduct Leadership program goes into much more depth about how to more effectively track progress against your goals, but we recommend three focused rituals that help to build trust up, down, and across your organization.
- Weekly Status Reports track progress highlighting confidence of completion by end of the quarter, and discussion of exceptional circumstances or roadblocks
- Monthly Progress Updates provide opportunities to highlight learnings that can be applied to the next month, revise plans when new information emerges, and identify key areas that require escalation to leadership
- Quarterly Business Reviews focus on what you learned, what it means, and what new NCTs the team is setting for the upcoming quarter
When used effectively, these rituals can change both how teams execute and how they’re perceived.
Viveck Kumar is VP of Product at PropertyGuru Group. His team has shifted away from traditional roadmaps to embracing NCTs as the main drumbeat of product development.
NCTs helped us change the perception of stakeholders. Two years back, the product team at PropertyGuru had a perception that they were not accountable enough. Despite the team working hard and shipping products, the perception lingered. Moving to NCTs and showcasing that various squads could consistently meet their commitments changed the perception of the product org internally.
- Viveck Kumar
Teams need to develop a comfort with discomfort in order to achieve their goals. We’re not talking about late nights and unsustainable workloads — we’re talking about being able to ride the inevitable waves of progress and setbacks on the path to getting to a destination. This requires a few key elements.
1. HAVE The bravery to commit.
Commitment is scary! People don’t want to sign up for things that are uncertain. It requires confidence and gumption to write the goal in ink and go all in on making it happen. Confidence is often built by having done something successfully before. But to have done it, you need to actually hit your goals, which requires building the habits necessary to put the right work in and track it effectively. Once you’ve seen that work a handful of times, the process itself can become the motivator because you have confidence that taking the commitment seriously will yield results.
2. CREATE A non-toxic environment to accomplish the work.
Leaders want teams to be ambitious, but they also want teams to take goals seriously. By pushing teams to have bigger and bigger goals, leaders inadvertently drive teams to be less invested in goals because they’re unattainable. The instinct to push for more is actually getting them less in the long-run. The right environment will allow you to set attainable and sustainable goals and encourage you to stay focused on them.
Teams also need persistence, stamina and deep focus on tasks that really drive towards the Commitment. If the Commitment isn’t front-and-center, it’s incredibly easy to do short-term tasks that fulfill our sense of accomplishment without actually moving us closer to achieving our goals.
3. EMBRACE humility to avoid hazardous illusions around progress.
Teams need the humility to really evaluate if they’re on track to their Commitments without taking it as a personal failure or being concerned about punitive consequences.
This means leaders also need to establish a culture where being vocally off-track (and clear about why) is incentivized and celebrated.
You Can Improve OKRs with NCT Concepts
We recognize that not everyone will be able to introduce a new goal-setting framework into their organization, so let’s walk through an example that illustrates how you can use the underlying concepts of NCTs to drastically improve the efficacy of your OKRs today. Remember, this is best used at the product team/squad level rather than the individual or company level.
The following example is for illustrative purposes only.
Objective 1: Improve product quality
- KR 1: Reduce page load speed by 25%
- KR 2: Increase NPS from 55 to 62
- KR 3: Reduce frontend errors through additional unit testing
Both the Objective and Key Results here leave much to be desired.
- It’s difficult to understand what “product quality” means, why its current state is problematic, and what will happen if it’s not ameliorated.
- It’s opaque how these three Key Results are tied to the Objective. Is there past context that informs whether these efforts are the best leverage for improving product quality?
- While KRs 1 and 2 are outcome-oriented, they lack any clarity about how to achieve those outcomes, making it hard to know what actions a team might take to reach the goals.
- While KR 3 suggests a strategy for how to reduce frontend errors, it’s unclear if reducing those errors is likely to result in better product quality.
It is perfectly viable for an individual product team to continue using OKRs to improve product quality. However, we’d encourage expanding them out more to include the underlying NCT concepts: articulate more strategic context in the objective, focus on a clear commitment for each KR, and specify a few actionable tasks that highlight a believable plan.
Objective 1: Ensure speedy loading. Our customer growth has meant that some of our product experiences are now subpar because they’re built on foundations that haven’t scaled well as we’ve added more features and customers to the product. Load time is a major driver of bounce rates and has been on an upward trajectory for 3 quarters. Bounce-rates are one of the key inputs into our SEO ranking, and given SEO is our main acquisition channel, we need to significantly reduce load times in order to maintain our quality reputation with search engines.
KR 1: Ensure access by reducing page load speed by 50% on mobile devices by delivering SSR on top 5 most used pages
- Prioritize which elements can be removed entirely v. need to be maintained
- Identify which components need to be fully migrated from old frameworks
KR 2: Develop baselines for performance SLAs and the dashboarding tools for us to proactively monitor the volume and segments of customers experiencing performance issues outside of SLA
- Set baselines for time to render
- Agree on an SLA
- Build tooling to alert if out of SLA
- Identify what we need on a dashboard
In this iteration, we’ve:
- Expanded the objective to clarify why product quality around performance matters so much.
- Removed the second KR entirely, because it’s now not clear how we’d be able to improve NPS before we’ve delivered these output goals first, or even if NPS is a meaningful indicator of performance improvements. We could run a later “holdout” experiment to test whether or not speed improvements lead to higher NPS – an important insight we can use in future work.
- Focus not just on outcome goals, but one input (KR 2) and one output (K1) goal, since we think those are reasonable drivers of improved performance outcomes.
- Added a couple key tasks for each KR, which can absolutely be modified or removed as a team starts execution and learns new information.
Modifying your goals in this way helps clarify all three critical elements: what, why, and how.
Regardless of the Framework You Use, You Can Get Better at Goal-Setting
Teams that step into a more virtuous cycle exhibit a handful of key observable behaviors:
- They set achievable, risk-adjusted and strategically meaningful goals
- They consistently track, adjust and follow-through on those goals
- They end up actually achieving their goals
- They view the goals-setting process as a credibility- and confidence-building mechanism that’s rewarding
- They use the experience of the last goal-setting cycle to update their mental models for the next cycle
- They recognize that goal-setting is just as much a habit-building practice as a process for achieving outcomes
This allows them to focus on what’s most important:
- Less on impressing leadership, and more on actually making a dent in the strategy.
- Less on checkboxes of acceptance criteria, and more on defining the right Tasks that are connected to a Commitment
- Less on hundreds of tickets or epics, and more on a few key Commitments
- Less on metrics, and more on a causal understanding of customers and the business
How to Kickstart the Virtuous Cycle
You can start improving your goal-setting habits today by remembering a few tips.
Ensure that your goals clearly tie back to your strategy by articulating what, why and how. Choose the right type of goal (discovery, input, output, outcome) based on your stage of product development.
Build consistent habits by getting wins under your belt that increase your confidence that you can actually execute well. Clear commitments, explicit actions that tie to those commitments, and the right team rituals help develop the scaffolding for good habits.
And as with building any habit, success is a matter of commitment, simplicity, and consistency. Set yourself up for success, and learn with every cycle.