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- Welcome to lesson two.

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We will start this lesson with the review

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of objectives and key results framework.

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What do you need to start with objectives?

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Or in other words, with your why?

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In lesson one, I mentioned
the book of Simon Sinek,

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who is a bestselling author.

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He wrote the book Start With Why

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and described the power
of starting with the goal.

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Does this logo sound familiar to you?

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Maybe not so much.

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And there is a reason for that.

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In his book, Simon Sinek
shared an example of TiVo,

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a great product that
did not address the why.

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It was launched in 1999

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and marketed as a digital video recorder

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that could pause live TV,
skip commercials, rewind TV

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and memorize an
individual's viewing habits.

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It was a high quality product,

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truly revolutionary for
its time and well funded.

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However, commercially it did not succeed.

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Some analysts thought it was
a few years ahead of its time,

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but that's not so.

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The primary reason was
that instead of a vision,

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the product description
contained a list of features.

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The vision should have
been the marketing message

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rather than just the product description

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telling potential buyers
about the features.

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What it should be?

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Something like we want
to give you full control

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over what you watch and how,
and this tool provides you

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with the ability to be in control.

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So with this why, they could
have listed the same features,

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pausing live TV, skipping
commercials, and others,

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but they failed to do that.

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Establishing why is the first step

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in positioning your product for success.

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What do we want to achieve

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and why is it important?

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Every product should have
a set of well-defined,

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quantifiable objectives shared
across all the stakeholders

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so that everyone has
a common understanding

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of the true north, how
success will look like.

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A popular framework for doing
this is referred to as OKRs

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which stands for
objectives and key results.

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As with everything else

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in agile project and product management,

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OKRs may change if the
market situation changes

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or any major enterprise
level decisions are made.

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However, OKRs usually are
quite stable year to year

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with change being discussed
across the company

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the group communicated

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and aligned to a broad
group of stakeholders.

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OKRs have been around
since Intel in 1970s.

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The concept was invented by Andy Grove

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who said leaders have to
act more quickly today.

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The pressure comes more faster.

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He realized that OKR could
be the driver that fuel

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that made Intel able to
respond quickly to market needs

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and align the company on
a joint set of objectives.

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Then, from Andy Grove, John
Doerr took over the concept.

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And as one of the early
investors in Google,

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he implemented OKRs at Google

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and they quickly became an important focus

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for Google and many
other leading companies,

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such as LinkedIn,
Twitter, Dropbox, Spotify,

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Airbnb and Uber.

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This is all well described by John Doerr

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in his famous,

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I can definitely say that now,

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book Measure What Matters.

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John Doerr suggested the
falling template to use

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when setting OKRs.

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I will, then you state the objective,

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as measured by, and then
you mention the key results.

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So as the name implies,

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there are two components,
objectives and key results.

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As Marisa Mayer, a former
Google vice president, said

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if it does not have a number,
it is not a key result.

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The objective should be
simple, aspirational,

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easy to relate to and easy to memorize.

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There is a rule that if you
have to catch your breath

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when reading your objective,
it's not a good objective.

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Also, OKRs are cascading
throughout the organization

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from company level to
divisional product and team.

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Some companies even
introduce individual OKRs.

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Those are usually related
to employee performance

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and their professional growth.

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Most companies use
Google self grading scale

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which is from zero, no
progress has been made.

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Notice, we not saying
no tasks have been done.

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Maybe there was a lot of busy work,

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but no progress, still is zero.

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And one, means objectives and key results

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are fully achieved.

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A good result is 0.6 or
0.7 or higher obviously.

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All of it is a success.

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OKRs have to be very
aggressive and hard to achieve.

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That's why 0.6 or 0.7 are
already a good result by itself.

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OKRs are usually presented as a tree.

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Look at this hierarchical structure.

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What does it remind
you of from lesson one?

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I'm making a pause.

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Try to recall what you have
discussed in lesson one.

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Obviously it's the work
breakdown structure.

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Similarly, objectives break
down to smaller objectives

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at every next level up to the team level.

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And each of them has its own key results.

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How this group is contributing

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to the success of the whole organization.

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There are four steps

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in the annual OKR setting
and alignment process.

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But again, let us start with the concept

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that any level objective is meaningful.

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This is a set of my personal OKRs.

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Personal OKRs are very helpful

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in achieving personal objectives
over a period of time.

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I set those every year and every quarter

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I look at those in my personal board.

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The tool is called Trello.

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It's a free for individual use tool

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that I use to manage my OKRs.

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There are four steps in the
annual OKR setting process.

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Once you set your OKRs,
you have to align on them.

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And the goal of this process
is to identify any dependencies

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and resource constraints
and have the teams engage

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in a meaningful dialogue
to resolve any resourcing,

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budgeting, or prioritization conflict.

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Then it comes to OKR refinement.

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The table below is based on
the alignment conversation

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and it is related to quarterly
review of key results.

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If key results are working,

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this is an indication that
the right measures are taken.

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If not, the team needs to pivot

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and select other means
of achieving this OKRs.

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And then the final step is to iterate.

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OKR iteration means
that once OKRs are set,

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aligned and refined, a review
cadence is established.

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And this allows the whole
organization to review progress

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against OKRs with full
transparency and traceability

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at the organizational level.

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This sequence is referred
to as SARI framework

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based on the first letters
of each of the four steps

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you see on your slide,

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setting,

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alignment,

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refinement and iteration.

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It's important that
SARI framework for OKRs

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is not sequential, it's cyclical.

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All steps repeat on a regular basis

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allowing for continuous alignment

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and as a lean ongoing value delivery.

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By the way,

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OKRs are frequently used
for personal objectives,

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as I have shown you, as
well as company objectives.

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So if you want to learn
about OKRs first hand,

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what are you waiting for?

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Set up your OKRs today and
you will experience the power

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of this simple and very
impactful framework.