OKRs and Prioritization of Work

OKRs, which stand for Objectives and Key Results, are a goal-setting framework used to define measurable goals and track their outcomes. The methodology helps in setting challenging, ambitious goals with measurable results, creating alignment, and encouraging engagement around these goals. Here’s a brief overview of OKRs and what they comprise of:

Objectives: These are significant, concrete, and action-oriented goals that are ideally inspirational. They articulate what you want to achieve2.

Key Results: These are specific, time-bound, and measurable outcomes that benchmark and monitor the progress towards the objectives. They should be aggressive yet realistic, with no grey area for doubt.

Activities: The specific tasks, initiatives, or projects your team undertakes to move the needle on the KRs and ultimately achieve the Objectives.

How to use OKRs to prioritize your backlog?

Objectives (Strategic Themes) — High level Objectives, which represent the big-picture goals for the team. The Team Objectives are aligned to and support the larger Department/ Organization’s OKRs. By clearly defining these objectives, everyone’s attention inside the team is directed towards what truly matters. These objectives provide vision and alignment to the group and below. This clarity helps avoid getting sidetracked by unimportant tasks.

Key Results (KRs) — The objective (strategic theme) must be measurable through Key Results (KRs). The quarterly/ monthly planning should be driven by measuring the progress on the key results. In order to provide better focus, an objective must not have more than 3 measurable key results.

As key results are aligned to Objectives and measure the actual impact on the Objective (Strategic Theme), the alignment & impact assessment of the key results should be done. Based on the how aligned it is and its magnitude of impact (the more the better) and duration (the lesser the better) the Key Results can be prioritized.

Activities — Now, there are activities (initiatives) that needs to be done which provide value and support to the Key Results. The high level activities/ initiatives can classified as Epics/ Features in a team’s context. Epics have a business case which should contain the impact assessment on the Objective (driven by impact on Key Results), cost, duration etc. Based on this information Epics can be prioritized.

An example OKR to understand how high level prioritization works with OKRs

Objective (Strategic Theme): Significantly improve the conversion rate (percentage of visitors who make a purchase) on our e-commerce website to drive online sales growth.

Key Results (KRs):

• KR1 (High Impact, Moderate Effort): Increase overall website conversion rate by 10% within the next quarter (3 months).
• KR2 (Moderate Impact, High Effort): Reduce shopping cart abandonment rate by 15% within 6 months.
• KR3 (Moderate Impact, Low Effort): Boost average order value by 5% within the next quarter (3 months).

Prioritization of Key Results:

Here’s how we might prioritize these KRs using a combination of impact and effort:

• KR1 (Highest Priority): This KR directly targets the overall objective of increasing sales and has a moderate effort level. It’s likely to have a significant impact and is achievable within the timeframe.
• KR3 (Moderate Priority): While increasing average order value is valuable, the impact might be slightly less significant compared to KR1. Additionally, it requires relatively low effort making it a good second priority.
• KR2 (Lowest Priority): Reducing cart abandonment can be impactful, but it might require more effort (redesigning checkout flow, implementing new features) compared to the other KRs. Additionally, its impact on overall conversion rate might be less direct.

High level initiatives (Epics), which provide value to KRs. The Epics supporting KR1 naturally would have higher priority over Epics adding value to KR2 and KR3 and Epics supporting KR2 would have a higher priority over Epics supporting KR3

KR1 Epics:

• Epic 1.1: Optimize product page layouts and descriptions for improved clarity and conversion.
• Epic 1.2: Implement A/B testing on key website elements like calls to action and product placement.
• Epic 1.3: Develop targeted marketing campaigns that drive high-intent traffic to the website.

KR3 Epics:

• Epic 3.1: Offer product bundles or discounts that incentivize adding more items to the cart.
• Epic 3.2: Recommend complementary products based on the customer’s browsing history or cart items.

KR2 Epics:

• Epic 2.1: Simplify the checkout process by reducing steps and offering guest checkout options.
• Epic 2.2: Identify and address common pain points that lead to cart abandonment (e.g., hidden shipping costs).

Epics prioritization (for Epics supporting the same KR) — The Epics prioritization should be done in the same way KR prioritization was done. An Epic must have the following information

• The magnitude of Impact it will have on the Objective (via Key Result)
• The rough estimate of effort needed.

Based on this information the Epics can be prioritized as below:

• Epic 1.3 (High Impact, Moderate Effort): Develop targeted marketing campaigns that drive high-intent traffic to the website.
• Epic 1.1 (Moderate Impact, High Effort): Optimize product page layouts and descriptions for improved clarity and conversion.
• Epic 1.2 (Moderate Impact, Low Effort): Implement A/B testing on key website elements like calls to action and product placement.

Connecting Activities to KRs:

1. List Your Activities: Compile a comprehensive list of all your current and planned activities.
2. Impact Assessment: For each activity, evaluate its potential impact on achieving the KRs. Consider these factors:

• Directness: Does your activity directly influence the metric of the KR? For example, building a new feature directly impacts the “increase user engagement” KR if that feature is designed to keep users coming back.
• Magnitude: How significantly will completing this activity impact the KR’s target? Will it have a major or minor influence on reaching the desired metric?
• Alignment: Does the activity align with the overall objectives? Ensure it contributes to the bigger goals, not just a specific KR in isolation.

Prioritization Strategies:

1. High Impact Activities: Prioritize activities that have a strong, direct impact on achieving key results tied to high-priority objectives. Focus on activities that will significantly move the needle towards achieving the desired outcomes.
2. Eisenhower Matrix: For activities not directly dependent on others, consider using the Eisenhower Matrix. This tool helps categorize activities based on urgency and importance relative to OKRs. Focus on “Do First” activities that are both urgent and important for achieving KRs.

1. Trade-offs: Sometimes, trade-offs between KRs might be necessary. Analyze potential scenarios and choose the combination of activities that optimizes overall objective achievement.

How to further prioritize Epics by using Impact Effort Matrix?

An Impact Effort Matrix is a decision-making tool used to prioritize tasks based on their potential impact on achieving a goal and the amount of effort required to complete them. It’s a helpful way to visualize and analyze which tasks will provide the most value for the resources invested.

Here’s how it works:

1. The Matrix: The matrix is a simple grid with two axes:

• Effort (Horizontal): This axis represents the amount of time, resources, and complexity required to complete a task. This can be ranked as Low, Medium, or High effort.
• Impact (Vertical): This axis represents the potential impact or benefit of completing the task on achieving your goals. This can be ranked as Low, Medium, or High impact.

Plotting Tasks: Each task or activity you’re considering gets plotted on the matrix based on its estimated effort and impact.

Prioritization: By analyzing the placement of tasks within the matrix, you can prioritize them effectively:

• High Impact/Low Effort (Sweet Spot): Tasks in this zone offer the most value. They deliver significant benefits with minimal resource investment. These tasks should be prioritized for completion first.
• High Impact/High Effort: These tasks offer significant benefits but require substantial resources. Carefully evaluate the potential return on investment (ROI) before undertaking these tasks.
• Low Impact/Low Effort: These tasks require minimal effort but also offer minimal benefit. Consider if they can be delegated or eliminated altogether.
• Low Impact/High Effort: These tasks require significant resources but offer little benefit. These tasks should be avoided or significantly re-evaluated to improve their impact.

Benefits of using an Impact Effort Matrix:

• Improved Decision-Making: The matrix provides a clear visual tool to compare and prioritize tasks based on their relative impact and effort.
• Focus on High-Value Activities: It helps you identify and focus on activities that deliver the most significant results for the resources invested.
• Resource Optimization: The matrix encourages efficient allocation of resources by avoiding tasks with low impact or high effort.
• Clear Communication: The matrix can be a valuable communication tool to discuss task priorities with your team and stakeholders.

Here are some additional tips for using an Impact Effort Matrix:

• Involve Your Team: Get input from your team members when estimating effort and impact for each task. This fosters ownership and buy-in for the prioritized tasks.
• Be Flexible: The matrix is a guide, not a rigid rule. Priorities can shift as circumstances change.
• Use it Iteratively: Revisit the matrix regularly as your project progresses or your understanding of the tasks evolves.

Communication and Collaboration:

1. Discuss with Team: Discuss your prioritization rationale with your team lead or manager. This ensures alignment and avoids duplicating efforts or neglecting critical tasks.
2. Transparency: If you identify activities that don’t seem to contribute to current OKRs, bring it to the attention of your manager. This might indicate a need to adjust the OKRs or re-evaluate specific activities.

Remember:

• OKRs are dynamic. Be prepared to adapt your priorities as market conditions, user needs, or company objectives evolve.
• Regularly review OKRs and your activities to ensure continued alignment.
• Don’t be afraid to seek clarification on objectives, KRs, or how your role contributes.