Scaling Product Objectives with OKRs in Large Organizations

The OKR (Objectives and Key Results) system is a highly scalable framework for managing and aligning work across an organization. However, many companies face challenges when trying to scale their use of OKRs effectively. In this blog post, we will explore what needs to change as you scale the OKR system, particularly within the product and technology organization, which includes product management, user experience design, and engineering. While these techniques can be applied at any scale, our focus here is on growth-stage or enterprise organizations.

Understanding the Shift at Scale

1. From Informal Coordination to Structured Alignment

???In startups or small organizations, where everyone essentially knows what everyone else is doing and why, it’s common for each product team to propose their objectives and key results (OKRs) with some degree of collaboration. However, in larger organizations, product teams require more structured guidance. The first critical need is a clear understanding of the organization-level objectives.

???For example, if the top two objectives for the company are to improve customer lifetime value and expand globally, each of the 25 product teams might have ideas on contributing to these goals. However, the company must strategically decide which teams will focus on each objective. Leadership, particularly the heads of product, technology, and design, must discuss the company’s objectives and determine which teams are best suited to pursue them. Some teams may focus exclusively on one objective, others might contribute to both, and some may tackle other essential work beyond these primary objectives.

2. Supporting Teams with Platform Product Teams

???At scale, it is common to have several product teams that support other product teams. These are often known as platform product teams or shared services product teams. These teams provide high leverage by indirectly serving customers through the higher-level, solution-focused product teams. Platform teams receive requests from most, if not all, higher-level product teams and are essential for their success. Leadership must coordinate the objectives of these teams, manage dependencies, and align interests to ensure they effectively support the organization.

3. Reconciling Key Results Across Teams

???Once objectives are set, a critical reconciliation process occurs. The leadership team reviews the proposed key results from the product teams, identifies gaps, and adjusts plans to cover those gaps. This might involve enlisting additional teams or reprioritizing work to ensure all key results are achievable and aligned with the organization’s goals.

4. Tracking Progress and Connecting the Dots

???At scale, it’s much harder to track which product teams are working on which objectives and the progress they are making. Various online tools can help make objectives transparent across the organization, but management still plays a crucial role in connecting the dots between teams. They ensure that teams are aligned and that their work collectively drives towards the company’s strategic goals.

5. Managing High-Integrity Commitments

???Larger organizations have longer lists of high-integrity commitments that need active management and tracking. Delivery managers are essential in tracking and managing these dependencies and commitments. They ensure that each commitment is met and that the organization remains on track to achieve its objectives.

6. Multiple Business Units and Layered OKRs

???In many enterprise-scale organizations, there are multiple business units. In such cases, we expect corporate-level OKRs and business unit-level OKRs, with product teams rolling up into those. This layered approach ensures alignment at all levels of the organization and clarifies how each product team contributes to the broader business objectives.

Conclusion

When using OKRs at scale, the burden on leadership and management increases significantly. Ensuring that the organization is truly aligned, that every product team understands how they fit into the overall strategy, and what they are there to contribute is crucial. Structured alignment, effective coordination of platform teams, rigorous reconciliation of key results, transparent tracking of progress, diligent management of commitments, and a layered approach to OKRs are all essential components for success.

By focusing on these areas, growth-stage and enterprise organizations can leverage the power of OKRs to drive their strategic objectives and achieve sustained success.