Never miss an OKR again

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The OKR → Hypothesis → Initiative framework

OKR setting, growth planning, quarterly prioritization….irksome but critical work that even the best marketers dread.

Without the right approach to figuring out how the hell you’re going to increase LTV by 15% or reduce churn by 30%, these planning exercises are impossible at worst, and overwhelming at best.

Often times, we’re guilty of trying to approach planning and prioritization bottoms-up, listing out all the things we could do this quarter that seem like good ideas, or that have been sitting on our to-do list for a while.

There’s a simple framework that flips this process on its head by taking a top-down approach instead. Approaching planning this way prevents you from spinning your wheels, and forces you to identify tactics that are actually impactful in hitting your goals. Here’s how it works.

Step 1: Start with your OKRs

This step is intuitive — you’re ultimately going to be mapping tactics to each OKR, so pick one to start with. Let’s use this example:

Of course, all OKRs should have an objective — “increase the number of customers served” — and a key result — “improving our conversion rate from 5% to 7%.” Typically, you’ll have a few key results associated with each objective, but we’ll keep it simple for this example.

The OKR portion of this framework describes your business problem. Delineating business problems from user problems is important, because while your job is to solve both, your ability to do so relies on the understanding that your users will only ever care about their problems.

Think about the last time you walked into Whole Foods — did you beeline for the ice cream aisle or spend time worrying about how they’re trying to increase same-store sales growth?

Understanding user problems comes in next.

Step 2: Build your hypotheses

Hypothesis building is the meat of the process, and is the part that takes the most getting used to if you typically plan bottoms-up. But it’s worth getting comfortable with — it’ll force you to think differently about how to solve problems.

The goal of this step is to come up with reasonably evidence-based theories that explain existing user behavior. The “user” part is critical here — too often we make the mistake of jumping right to solutions to solve business problems, without understanding the user’s problems.

Our hypotheses are our opportunity to dive into the user’s problems, and thus should be theories about how our users are currently experiencing our business.

If you think about it, the only thing you really CAN hypothesize about is user behavior. You KNOW your business, how it works, what information you have on your landing pages, what the product experience is like, etc. Here’s how to put this into practice and write a good hypothesis.

How to write a good hypothesis

A good hypothesis meets a handful of criteria:

It SHOULD be user-first.

In practice, this means your hypothesis should generally start something like…”We believe our users are confused by our…” rather than “We believe we don’t currently do a good job of…” This is because hypotheses are your opportunity to explain user behavior, not business problems.

It SHOULD theorize about user behavior and psychology.

In practice, this means your hypothesis might sound something like “We believe potential customers don’t understand the outcomes they can expect from using our product, and therefore are hesitant to convert.”

It SHOULDN’T predict an outcome.

In practice, this means your hypothesis shouldn’t include something like “We believe we can improve our conversion rate from 5% to 7% by…” Instead of predicting an outcome within your hypothesis, you’ll actually measure the outcome of your initiative by assigning and tracking a singular KPI.

It SHOULDN’T include the tactic or experiment itself.

In practice, this means your hypothesis shouldn’t read something like “We believe that by including more testimonials on our landing page, we can improve conversion.” This would be putting your tactic first — BEFORE you’ve defined the problem the user is facing that would warrant this tactic.

It’s worth noting that each one of your OKRs can, and probably should, have a handful of hypotheses associated with it — maybe two or three. Once you have your OKRs, which represent your business problem, and your hypotheses about how your users’ problems contribute to your business problems, then, and only then, can you start thinking about how you’re going to tackle your OKRs.

Step 3: Determine the right tactics to march toward your goals

Determining initiatives and specific tactics is the step that folks often jump to right after reviewing their OKRs.

But until you spend time on that critical middle step of trying to understand how your customers are behaving and why, you’re attempting to come up with solutions to problems you haven’t defined.

Let’s take our OKR…

…and one of our strong hypotheses…

“We believe our customers don’t understand the outcomes they can expect from using our product, and therefore are hesitant to convert.”

…and talk about how to determine the best tactics.

Now that we know what we want to achieve — a measurable conversion rate increase — and have a solid guess as to why we’re not achieving that metric today — customers aren’t clear on outcomes — it’s MUCH easier to come up with a whole host of ways to try to close this gap.

Some ideas are:

• Include engaging customer testimonial content on product pages

• Ensure clear, desirable outcomes are prominent features on product pages

• Introduce before and after visuals that demonstrate outcomes

But without the focus of attempting to improve user understanding of outcomes, the list could be all over the map and you’ll be attempting to boil the ocean.

Other notes about your tactics

• Each tactic should have one measurable KPI that’s relevant to its OKR

• You should be able to track this metric easily

• As often as possible, tactics should be metric-based, rather than binary (e.g., “how much did we move our KPI”, instead of “did we or did we not get this thing done”)

Test yourself

Write down a few of the projects you want to prioritize before the end of Q4.

Now, consider one of your relevant OKRs. Spend a few minutes thinking through a strong, user-focused hypothesis that’s relevant to that OKR.

Then come up with a few tactics that will clearly help you solve both the user problem you’ve defined, and moves you toward the key result you need to achieve.

That list of tactics will probably be different, and more focused, than the list of projects you started with.

✨ One marketing thing: Non-alcoholic beer brand Athletic Brewing just raised another $50m to expand operations. I say this is a marketing thing because they positioned themselves differently than non-alcoholic incumbents when they launched, and their success speaks for itself.

✨ One fun thing: A clever summertime reminder.

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