6 Steps for Setting High-Leverage OKRs

On the surface, the OKR framework can seem simple, but it is easy to use OKRs ineffectively — leading to a lack of focus, planning, and not enough emphasis on long-term growth.

On the other hand, well-designed and well-implemented OKRs create an iterative feedback loop that drives constant learning and improvement. As a result, OKRs can be a powerful tool for product managers to create leverage for themselves and their teams.

Reforge’s Mastering Product Management program introduces an approach that overcomes the common challenges product managers face and enables you to use OKRs to focus efforts, empower teams, improve product intuition, and earn leadership buy-in.

As sneak peek into the program, Sachin Rekhi, Founder & CEO at Notejoy, walks us through the 6-step process of how to effectively use OKRs in this article.

Meet The Expert

Google and OKRs

Feel free to jump ahead to find out how to most effectively utilize OKRs, but first we’d like to take a swing at earning some street cred for OKRs with its quick history.

In the fall of 1999, John Doerr, a successful venture capitalist, showed up at a two-story office building in the heart of Silicon Valley.

Larry Page and Sergey Brin and the rest of the Google team, about 30 others, gathered to hear him speak. Over the course of ninety minutes, the team was introduced to OKRs for the first time. Although the team was interested at the end of the talk, they were by no means sold on the idea.

However, Sergey decided that the team should have an organizing principle, and since one didn’t exist, OKRs might as well be it. It quickly became a core operating mechanism within the company — and still is to this day.

As John Doerr observes, “OKRs are the scaffolding for Google’s signature home runs, including seven products with a billion or more users apiece: Search, Chrome, Android, Maps, YouTube, Google Play, and Gmail.”

According to Eric Schmidt, the former CEO of Google, "OKRs should be credited with changing the course of the company forever.”

What are OKRs?

Since its debut at Google, OKRs have spread across the tech industry as the primary goal-setting framework. However, the use of OKRs is wildly inconsistent, and the tool has become a polarizing topic, its utility so often debated.

Our view is that any product manager — and company — needs a strong goal-setting system, and OKRs can be a particularly powerful tool that can help create significant leverage for product managers when implemented correctly.

The Two Parts of an OKR

Let’s start with the basics.

As the name implies, there are two core components of OKRs:

1. The Objective, or what you hope to accomplish with a given set of initiatives.
2. Key Results, or numerically-based expressions of success or progress towards an objective.

When you combine objectives and key results into an OKR, you can set more effective goals for your team and your business.

Why OKRs?

You can skip ahead to the “How-To” portion of this article, but we believe it’s important to know why using OKRs can be highly valuable. OKRs provide a powerful goal setting framework that creates leverage for product managers in four ways:

1. OKRs create focused effort.

An effective, outcome-oriented OKR system ensures product managers spend their time focused on high impact initiatives.

By focusing on the top objectives and associated key results, great product managers force themselves to make hard prioritization trade-offs up front. Additionally, the product manager helps focus the team on business and product outcomes rather than outputs.

2. OKRs drive team empowerment.

OKRs help great product managers scale beyond their own efforts and maximize their impact by ensuring the entire team is aligned on the top priorities and accountable for the most important objectives. This alignment empowers the team to make tradeoffs with less of the product managers involvement, thus freeing up their time to direct towards even higher impact work.

Moreover, alignment compounds and builds momentum over time.

3. OKRs create product intuition.

By adopting an outcome-oriented approach to OKRs and implementing a regular review process, great product managers improve and accelerate the team's learning loop.

When effectively implemented, the product manager and their team are able to continuously deepen their understanding of the causal relationship between business outcomes and strategic initiatives. Simply put, they are improving their understanding of how results are created. When done well, OKRs enable product managers to learn and iterate at a faster rate.

4. OKRs create leadership buy-in.

Through effectively socializing and aligning their OKRs with leadership, great product managers are able to get support from key decision-makers and leaders within their company.

With more leadership buy-in, there’s less top-down oversight, greater frontline autonomy, and more fertile soil for the next breakthrough.

6 Steps for Setting High-Leverage OKRs

It’s easy to write OKRs that look good on the surface, but great OKRs are developed through a rigorous and reflective process that involves 6 steps:

1. Draft Outcome-Oriented OKRs
2. Update OKRs Quarterly
3. Share, align, and socialize OKRs
4. Launch OKRs
5. Reinforce and review OKRs
6. Conduct quarterly post-mortem

Let’s explore each step in detail:

1. Draft Outcome-Oriented OKRs

The first step to leveraging OKRs more effectively lies in the drafting process. This is all about ensuring that your objectives align with your strategy and your key results paint a full picture of your objective's success.

Without well-drafted OKRs, the product manager will be unable to leverage this iterative feedback loop that drives constant improvement. If you don’t get this step right, every other step in the loop is compromised.

The best product managers don’t view the drafting process as a solitary activity.

Instead, they write their OKRs with input from their pod. This ensures early cross-functional peer alignment and longer-term team empowerment.

Now, let’s dig into the drafting process.

First, define the 1-4 objectives based on the most high-priority objectives identified in your roadmap.

As always, adapt this number to your team, but oftentimes, more than four objectives will likely diffuse the focus of the team.

Next, define 2-4 key results per objective. This can be challenging, as product managers often struggle to come up with the appropriate mix of key results for their specific objectives.

While objectives can be treated in isolation (i.e. objectives normally are not interdependent), key results shouldn't be treated in isolation. They come together to paint a picture of what needs to happen for your objective to be successful.

There are output-metric key results — such as delivering an important feature — as well as outcome-oriented key results. It’s also important to note that outcome-oriented key results can come in two varieties based on the metric within the key result. The two varieties of outcome-oriented key results are:

• Outcome metrics: Metrics tied to the end result that creates business value.
• And KPIs: he most influential input metrics that affect the outcome metrics. These can be broken down into several levels, that all build up to your outcome metrics. Often, KPIs are a better short-term proxy for driving longer-term output metrics.

Great OKRs contain a balanced mix of the three types of key results: output metrics, outcome metrics, and KPIs.

This balance also helps address the challenge of having OKRs for ambitious projects that span multiple quarters. In general, there are two approaches you can take for such projects. The first is to include a placeholder key result that extends beyond one quarter. The second is to identify an alternative KPI for the longer-term outcome.

After drafting the OKRs, ensure each has an owner. The owner will be responsible for tracking progress throughout the quarter. In many cases this will be you as the product manager, but it may also be a cross-functional peer.

As a reminder, it’s best to draft your OKRs in close collaboration with your pod of cross-functional peers (engineers, design lead, data scientist, etc.)

2. Update OKRs Quarterly

We recommend drafting and executing your OKRs over a quarter.

Too often, teams don’t take the time to integrate learnings from the previous quarter’s OKRs. This step is in place in order to ensure you take into account the learnings produced from the previous quarter’s post-mortem.

OKR programs have an inherent planning overhead and paying that "tax" every month can be needlessly expensive and rarely worth it.

On the other hand, annual OKRs are typically too infrequent to drive the desired learning and iteration.

In some cases, companies develop annual OKRs to supplement their quarterly OKRs. This helps facilitate longer term planning for the entire year as well as helps inform decisions like hiring, budgets, and more.

The Exception

Before moving on to the next step, let’s look at one other situation that often causes challenges.

Let’s say the team is working to launch a feature that includes an outcome-oriented key result of improving the run rate conversion on a step in the registration funnel by a certain percent.

Perhaps the engineering work takes 11-12 weeks to complete. This leaves very little time to understand and measure the outcome metric.

In situations like this, it is critical that you continue to track these key results in the coming one or two quarters. This can mean that you may include former OKRs in your OKR tracker, with the note that the work has been completed, but the key result tracking is ongoing.

3. Share, align, and socialize OKRs

After updating the OKRs, the product manager should shift their attention to sharing, aligning, and socializing the OKRs before they are launched.

Even when product managers write thorough OKRs, they often neglect to ensure those OKRs have horizontal and vertical alignment.

No matter how good your OKRs are, if you aren't effective in aligning them with key stakeholders, you will not be able to create leverage through team empowerment and leadership buy-in.

As you work to gain vertical and horizontal alignment, you need three things drafted and ready for others to react to: objectives, key results (including an indication of the key metric that informed the objective), and the list of initiatives that correspond to each objective.

This step involves sharing these three outputs with all relevant stakeholders. There are two pieces of this.

• First, you need to sense-check them with leadership: Explain what the OKRs are, why you selected each objective, and how these goals align with higher-level company goals.
• Next, you need to socialize and align them with interdependent stakeholders: Ensure the necessary support is in place from your cross-functional partners.

This order is important because socializing OKRs with interdependent stakeholders prematurely without leadership sign-off — or worse, with leadership push-back — you may be forced to revamp the OKRs and restart the socialization and alignment process.

This is a sure way to make the OKR process seem erratic.

Common Mistakes in Socializing OKRs

Teams make a few common mistakes when socializing OKRs with cross-functional teams.

One mistake is “horse-trading” before sense-checking goals with leadership. Focusing on compromising or negotiating goals often leads to lower impact in reaching them.

Another mistake is not having the same goals as an interdependent team. This shows a lack of alignment and can often lead to an objective that is not reached.

Matt Greenberg, the CTO at Reforge and former VP of Engineering at Credit Karma, says, "A common failure mode is when interdependent teams don't have the same goals as you do on a shared initiative."

As a result, you'll then end up having to edit and refine the OKRs.

4. Launch OKRs

After drafting and socializing the OKRs, leverage can only be achieved through clarity and commitment throughout the team. A strong launch at the beginning of the quarter makes this possible and leads to team empowerment throughout the quarter.

This is best accomplished through a quarterly OKR kickoff with the team.

Make sure every team member understands the OKRs clearly and the rationale for them: OKRs are supposed to be stretch goals for what we would like to achieve (i.e., be ambitious and aggressive). If quarter after quarter the team consistently achieves 100% of the OKRs, then it’s likely that ambitions were set too low.

After launch, remind teams of how OKRs will be reinforced and reviewed throughout the quarter.

Finally, we recommend keeping it simple when documenting and tracking your OKRs. While there are many OKR tools out there, your company wiki tool or spreadsheet will do just fine (e.g., Notion, Confluence, Google Sheets, etc.).

Keeping it in a tool that the company is familiar with reduces a layer of friction for the team.

5. Reinforce and Review OKRs

Throughout the quarter, regular reinforcement creates leverage for you as a product manager by maintaining the team’s focus as well as the alignment and accountability toward the designated OKRs.

This is all about keeping OKRs front and center and not overburdening your team with additional meetings and processes.

OKRs are most effectively reinforced by co-opting existing processes.

• Regular status emails/updates: You can use OKRs to organize your existing status, share tasks in progress, and provide early metrics.
• Integrate OKRs status updates within existing bi-weekly sprint post-mortems.
• You can use OKRs for one on one check-ins with managers. To appropriately manage up, send OKR status as a pre-read for one on ones with your manager.
• They can be included in product reviews that provide leadership and the broader company insight into your product priorities.

Sometimes you need to change priorities mid-quarter based on new information. This is acceptable as long as it is done explicitly and with a clear understanding of the impact on all OKRs.

The key question to consider is: Has new information emerged that did not exist during the drafting process?

If no new information has emerged, you should stay focused on the quarter's OKRs.

If there's truly new information, then an explicit conversation needs to be had about how the team should reprioritize.

This is a zero sum game when it comes to available resources. If you are prioritizing something new, you have to de-prioritize something else.

Ask yourself, is this new information causing us to create a new OKR or dramatically shift our focus because it is now more important than the existing OKRs? If so, what gets de-prioritized?

If a mid-quarter change is required, it’s best to revisit the process you used to share and socialize OKRs. Validate and sense check the change with leadership and lay out the clear rationale for the change. Communicate with interdependent stakeholders to ensure horizontal alignment related to the change.

6. Conduct quarterly post-mortem

This is the core step that drives improved and accelerated learning loops, creating that leverage for the product manager. Through the post-mortem, you improve your understanding of how results are created and improve your team’s collective ability to focus on what matters most in the long run.

During this step, the team takes time to systematically reflect on the quarter, learn, and immediately iterate. This is done while developing a “bank” of initiative data to support future product decisions.

While this step involves scoring and honestly reflecting on the performance over the quarter, it’s critical that specific OKR scores are not tied to performance reviews and compensation.

If they are, it is very challenging to run an OKR loop that enables meaningful learning.

Preparing for the Post-Mortem

First, ensure you have a consistent scoring framework. The specific scoring guidelines don't matter as much as ensuring consistency. One example is a simple green, yellow, red scoring system.

Start by evaluating performance relative to the key results:

• Green = 100%+ achieved
• Yellow >= 70% achieved
• Red < 70% achieved

For objectives, the simplest way to score objectives is as an average of key result scores. However, some discretion needs to be applied as not all KRs are equal in importance for a given objective.

For example, if the most indicative key result was red while all others were green, the overall OKRs is more likely to be yellow, or even red. It also means reflecting honestly on the question: Did we achieve the spirit of this objective (regardless of the key results)?

As discussed in the previous lesson, OKRs are meant to be stretch goals. As a result, the team should embrace a “red is good” or “red is acceptable” culture. Red scores can often teach the team just as much, if not more, about what it will take to be successful in the future.

Before the post-mortem, ensure all OKRs are self-scored by the OKR owners.

Score each individual key result using the green, yellow, and red scoring system.

A simple way to do this is to convert the colored scores into numbers (green = 2, yellow = 1, red = 0), take the average, and round to the closest whole number. However, any scoring method, especially this simplified approach, should include some discretion.

There could be a world in which one key result is red, but the team still rates their OKR as green if they can confidently say the objective was hit.

There could also be a world in which most key results are green, but one of the most important key results was red, indicating the team really didn’t achieve the intended objective.

Some companies use weighted averages, but this is often unnecessary and creates added overhead.

Collect and Document the Data from Post-Mortem

Collect and document any initiative-specific data within the “initiative data bank.” For example, any relevant test results that provided strong data related to the impact of a specific initiative.

This is as simple as documenting:

1. The initiative
2. The actual impact
3. The forecasted or expected impact

Note that you will likely not have data for every initiative. So while you may have 10 initiatives within a quarter, perhaps you will only add data from three of them to your “bank” of initiative learning.

After scoring the OKRs and collecting initiative-specific data, compile and distribute the following as a pre-read prior to the post-mortem meeting: the graded OKRs, and the “bank” of initiative data that was collected throughout the quarter.

Hosting the Post-Mortem Meeting

Now let’s move to the actual post-mortem meeting. A typical post-mortem agenda will include five key steps:

First, establish expectations for the meeting. Remind the team that this is less about evaluating performance and more about learning and improving as a team.

Second, start the discussion by asking for any disagreements on scores. This should be quick, but should ensure everyone is on the same page. Are those scores accurate? Are we being fully truth-seeking?

Third, the most important part: go OKR by OKR and facilitate a discussion based on the provided grade. This is all about reflecting on why you achieved or didn't achieve each OKR. The exact conversation will depend on the OKR score. The team should seek to identify the root cause of success/failure.

To do so, you can prompt the group with a few questions based on the OKR score. For OKRs that were scored green, “which of these initiatives was most impactful in driving the objective to be successful?” and “what about the specific initiative(s) made it particularly successful?” This could have been the result of strong overall execution of the chosen initiatives, good product picking, or luck.

On the other hand, for OKRs that aren’t achieved, or are scored as red, the fundamental question is “what was the root cause of not hitting this OKR?” Was it because of delays or reprioritization? Did we deliver the intended output, but it fell short of the expected outcome? Was our forecast off and the initiative was actually a success? Do we just need more time for the outcome to materialize?

For OKRs that are scored as yellow, and achieved some, but not all the desired success, you should seek to learn what worked and what didn’t.

Next, the conversation should shift to how and what we can learn from this quarter can be applied to our future product decisions.

Based on our OKR scores: How should we adjust our OKRs for next quarter? What about our strong (or weak) execution can we emulate in future quarters or for other initiatives? What does this tell us about the kinds of objectives we should prioritize in the coming quarters? Did we learn anything about any of our strategic dimensions (e.g., target audience, value proposition) that suggests we should pivot or refine our approach?

Finally, thank the team for the work and honest and rigorous reflection and share the proposed next steps.

Remind the team of the key outputs from this meeting, and when they will be distributed or where they can be found.

How to Evaluate OKRs to Make Adjustments

You should walk away from the post-mortem meeting with two key outputs: Graded OKRs and rationales—the compiled grades, notes and takeaways from the quarterly post-mortem.

Additionally, you should have a bank of initiatives with corresponding impact data.

The product manager should ask themselves, "Given the outputs from the post-mortem process, is there any need to make adjustments to the OKRs and roadmap?"

Adjustments can come in three forms:

• Change the focus of an objective or choose to prioritize a certain objective over another.
• Change the forecast associated with a particular key result. For example, based on the team’s OKR scores, the product manager may decide that the forecast associated with certain key results should be made more ambitious or be lowered to be more realistic.
• Change the prioritized initiatives. For example, if UX-focused initiatives are proving to be less impactful than expected, the product manager may choose to de-prioritize that type.

Using the rationale for OKR grades, consider if any new information has emerged that should push the team to adjust any of the six dimensions of the product strategy:

• Target audience
• Problem you’re solving
• Value proposition
• Strategic differentiation
• Channel Strategy
• Monetization Strategy

This type of strategy adjustment can come in two forms:

• Refinement: Add more detail to a specific element of your strategy, but maintain the same direction. Learning that there is a more precise subset of your target audience that is particularly well-suited for your product can cause you to refine your definition of the target audience. Additionally, sometimes you learn about your value proposition from the success (or failure) of a particular initiative. Sometimes you may want to monitor interesting trends before immediately refining or pivoting.
• Pivot: Adjust the overall direction or focus of a specific dimension of your strategy. Learning that your product is well-suited for a surprising new audience can push the team to pivot its target audience. For example, Notejoy discovered that it’s product was surprisingly attractive for individuals and SMBs outside of tech.

LinkedIn OKR Evaluation Example

Let’s look at an example from LinkedIn. The review process for the LinkedIn Sales Navigator team forced the team to face the brutal facts and helped drive a culture of truth-seeking.

The LinkedIn Sales Navigator team sought to improve retention after launch as it initially fell below the benchmarks they saw for other subscription services offered by LinkedIn.

The team prioritized objectives to improve retention, leveraging the playbook of retention initiatives that had become best practices for LinkedIn subscriptions. This included solving involuntary credit card churn, sending regular re-engagement emails, improving product onboarding, and more.

They prioritized and implemented a subset of these retention improvement initiatives for the quarter. While they saw some improvement in churn, it was far from their target benchmarks.

They spent another quarter prioritizing an additional subset of retention playbook initiatives. At the end of the quarter, they saw the same results: a small improvement in retention, but still far away from target benchmarks.

That’s when the team faced the brutal facts: that while the retention playbook they had in place at LinkedIn worked well for mature products, it had minimal impact on improving retention for brand new products.

Heading into the next quarter, the team went back to the drawing board. They dropped the retention playbook, but sought to learn from everything they had tried over the past two quarters to come up with a new hypothesis.

Ultimately they came up with a hypothesis that those who saw value in Sales Navigator were those who got to the magic moment of saving prospective leads within Sales Navigator and then got meaningful insights about those leads automatically delivered to them.

But only a small subset of users truly understood the value of saving leads in the product. So the team brainstormed initiatives to get users to save leads within their first week on Sales Navigator.

After prioritizing and implementing small initiatives, creating relevant OKRs, and tracking the impact, the weekly active users went up and the team finally saw a meaningful improvement in their churn numbers.

Overall, an effective post-mortem is at the center of the learning process, so it’s critical that you don't short-change this effort.

OKRs Become a Loop to Fuel Growth

Too often, OKRs are viewed as an executional tool — something you do once, then stuff away in a drawer. Product managers don’t learn from their progress, or lack thereof, during a quarter, and as a result, they fail to build product intuition.

In contrast, great product managers view OKRs as a loop, grounded in rigorous review, reinforcement, and reflection. This approach drives learning for the team and improves product intuition.

As John Doerr reminds us, “While conceptually simple, (OKRs) demands rigor, commitment, clear thinking, and intentional communication. We’re not just making some list and checking it twice. We’re building our capacity, our goal muscle, and there is always some pain for meaningful gain.”

After drafting and socializing OKRs, leverage can only be achieved through clarity and commitment throughout the team. A strong launch at the beginning of the quarter makes this possible and leads to team empowerment throughout the quarter.

The best product managers keep OKRs front and center by reinforcing them through existing processes, such as regular status updates, sprint post-mortems, 1:1 check-ins with managers, product reviews, and weekly business reviews.

It’s important to remember that OKRs are not meant to be easy and effective implementation takes time.

Sachin Rekhi reminds us why OKRs can be such a powerful tool for product managers:

“As a product manager you are responsible for driving focus, alignment, accountability, and an outcome orientation. Objectives & Key Results (OKRs) are one of the best goal-setting frameworks I've found for accomplishing all of these things.”



- Sachin Rekhi, Founder & CEO of Notejoy

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