Aligning OKRs with company values

Clear direction is more than just a mission statement

Every company needs a strategy and vision. However, and I may be stating the obvious here, but having a clear direction goes beyond just a vision or mission statement. You need clear objectives, goals, and predictions, and teams need to understand the motives behind them.

Surprisingly, some leaders let the Vision and Mission drive everything without providing further clarity. And if you’re the CEO, that may be fine, but as product managers, we must create shorter-term goals and clear OKRs to drive what our teams work on. Quarterly and yearly objectives with targets and a baseline to measure from are essential to know if your work is moving things in the right direction.

Still, I’d argue that OKRs alone are not enough. In addition to having good OKRs, well-communicated motives or beliefs are an important component. The motives behind your objectives can impact decisions, and your team's work will suffer when motives aren’t understood or communicated well.

Motives can often be communicated as the organization's core tenets, beliefs or values. If your company values putting the customer first, you might not prioritize aggressive contracts and terms at the expense of customer experience. It’s important to ensure your work is aligned with these values; I’ve seen many product leaders make short-term gains by working against core values, only to have it backfire in the long run.

I’ve seen firsthand how people can undermine a company’s core values to achieve an OKR. This happened so often at a previous company that it was questionable whether those values were even applicable to that company anymore.

Here’s an example of what I mean. If your OKR is to increase average revenue per transaction by $3 this quarter, your approach will depend greatly on your organization’s core tenets or beliefs. If you believe in offering customers the lowest price, you might not want to increase fees to hit your objective.

In this scenario, I’d even say prioritizing revenue as an objective is potentially dangerous and could go against your company’s values. We often stray from our strategy by prioritizing revenue, retention, etc. Yes, things like revenue per transaction are important, but they should be a given if we do everything else right.

A better OKR might be to save $3 per transaction. This would focus efforts on cutting costs to increase margins instead of charging customers more. It’s a minor difference but an important distinction to make. When these things are at odds with each other, teams can struggle to achieve their OKRs, and if they do achieve them, they risk doing so to the detriment of the company values.

Perhaps it would be helpful to think of the potential extremes an OKR could have to avoid incentivizing the wrong things. If we reached for an extra $20 a transaction, what could the impact on our users be? As discussed, it really depends on how we work to achieve that goal.