As a product manager, you are responsible for defining and delivering the best possible product for your customers. But how do you know what to build, how to prioritize, and how to measure your success? That's where goal setting comes in.

Goal setting is the process of establishing clear, specific, and measurable objectives for your product. Goals help you align your vision with your stakeholders, communicate your strategy, and track your progress. Goals also help you focus on the most important problems and opportunities, and avoid distractions and scope creep.

But not all goals are created equal. Some goals are more effective than others, depending on how they are defined, structured, and tracked. In this article, we will discuss some best practices for goal setting for product managers, including:

- How to use input and output metrics
- How to establish OKRs
- How to align on the goals with other teams
- How to update the tracking

Input and Output Metrics

One of the key challenges of goal setting is choosing the right metrics to measure your product performance. Metrics are quantitative indicators that show how well you are achieving your goals. Metrics can be divided into two types: input and output metrics.

Input metrics are the actions that you and your team take to influence the outcome of your product. For example, the number of features you ship, the number of user interviews you conduct, the amount of time you spend on research, etc. Input metrics are within your direct control, and they are useful for planning and managing your work.

Output metrics are the results that you and your team produce with your product. For example, the number of users, the revenue, the retention rate, the customer satisfaction, etc. Output metrics are outside your direct control, and they are useful for evaluating and improving your product.

Both input and output metrics are important, but they serve different purposes. Input metrics help you track your efforts, while output metrics help you track your impact. Input metrics are leading indicators, while output metrics are lagging indicators. Input metrics are easier to measure, while output metrics are harder to measure.

The best practice is to use a combination of input and output metrics, and to align them with your goals. For example, if your goal is to increase user engagement, you might use input metrics such as the number of features that support engagement, the number of experiments that test engagement hypotheses, the number of user feedback sessions that validate engagement assumptions, etc. And you might use output metrics such as the average session duration, the number of active users, the engagement score, etc.

By using input and output metrics, you can ensure that you are not only doing the right things, but also doing them right. You can also avoid the pitfalls of focusing too much on either type of metric. For example, if you only use input metrics, you might end up shipping features that don't solve real user problems, or spending too much time on activities that don't move the needle. If you only use output metrics, you might end up chasing vanity metrics that don't reflect the true value of your product, or ignoring the root causes of your product performance.

OKRs

One of the most popular frameworks for goal setting is OKR, which stands for Objectives and Key Results. OKR is a simple and effective way to define and communicate your goals, and to align them with your organization's vision and strategy.

An OKR consists of two parts: an objective and a key result. An objective is a qualitative statement that describes what you want to achieve with your product. A key result is a quantitative measure that shows how you will know if you have achieved your objective. For example, an OKR for increasing user engagement might look like this:

- Objective: Increase user engagement with our product
- Key Result: Achieve 10% increase in average session duration by the end of Q1

The best practice is to use the SMART criteria to define your OKRs. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. SMART OKRs are clear, realistic, and aligned with your product vision and strategy. SMART OKRs also help you avoid ambiguity, confusion, and misalignment.

To create SMART OKRs, you can use the following questions as a guide:

- Specific: What exactly do you want to achieve with your product? Who are the target users, and what are their needs and pain points? What are the benefits and value propositions of your product?
- Measurable: How will you measure your progress and success? What are the key metrics and indicators that reflect your objective? How will you collect and analyze the data?
- Achievable: Is your objective realistic and attainable? What are the assumptions and risks that might affect your objective? What are the resources and dependencies that you need to achieve your objective?
- Relevant: Is your objective aligned with your product vision and strategy? Is your objective aligned with your organization's goals and priorities? Is your objective relevant and valuable for your customers and stakeholders?
- Time-bound: When do you want to achieve your objective? What is the timeframe and deadline for your objective? How will you track and report your progress and results?

By using SMART OKRs, you can ensure that your goals are clear, realistic, and aligned with your product vision and strategy. You can also ensure that your goals are actionable, trackable, and communicable.

Aligning on the Goals with Other Teams

One of the benefits of using OKRs is that they help you align your goals with other teams and stakeholders. Alignment is crucial for ensuring that everyone is working towards the same vision and strategy, and that there is no duplication or conflict of efforts.

To align on the goals with other teams, you can use the following steps as a guide:

- Communicate your OKRs: Share your OKRs with other teams and stakeholders, and explain the rationale and value behind them. Seek feedback and input from them, and address any questions or concerns they might have. Make sure that your OKRs are visible and accessible to everyone who needs to know them.
- Align your OKRs: Review the OKRs of other teams and stakeholders, and identify any overlaps, gaps, or dependencies between them. Discuss how your OKRs support or complement each other, and how you can collaborate or coordinate your efforts. Agree on the roles and responsibilities of each team and stakeholder, and how you will communicate and report your progress and results.
- Review and update your OKRs: Monitor and measure your OKRs regularly, and share your updates and learnings with other teams and stakeholders. Celebrate your achievements and successes, and acknowledge your challenges and failures. Learn from your feedback and data, and adjust your OKRs as needed.

By aligning on the goals with other teams, you can ensure that you are working in sync and harmony with your organization, and that you are delivering the best possible product for your customers.

Updating the Tracking

One of the challenges of goal setting is keeping track of your progress and results. Tracking is essential for evaluating and improving your product performance, and for communicating and reporting your impact.

To update the tracking, you can use the following tips as a guide:

- Use a tool: Use a tool or a platform that helps you track and manage your OKRs. There are many tools available, such as Asana, Trello, Jira, etc. Choose a tool that suits your needs and preferences, and that integrates well with your workflow and data sources.
- Update regularly: Update your OKRs frequently, preferably on a weekly or bi-weekly basis. Don't wait until the end of the quarter or the year to update your OKRs. Updating regularly helps you stay on track and on top of your product performance, and helps you identify and address any issues or opportunities early on.
- Be honest: Be honest and transparent about your progress and results. Don't hide or sugarcoat your failures or challenges, and don't exaggerate or inflate your achievements or successes. Be objective and data-driven, and use your metrics and indicators to support your updates.
- Be concise: Be concise and clear about your updates. Don't write long and detailed reports, and don't use jargon or acronyms. Use simple and plain language, and use bullet points or charts to summarize your updates. Focus on the key highlights and insights, and the actions and next steps.

By updating the tracking, you can ensure that you are measuring and improving your product performance, and that you are communicating and reporting your impact.

Conclusion

Goal setting is a vital skill for product managers, as it helps you define and deliver the best possible product for your customers. In this article, we discussed some best practices for goal setting, including:

- How to use input and output metrics
- How to establish OKRs
- How to align on the goals with other teams
- How to update the tracking

By following these best practices, you can ensure that your goals are clear, realistic, and aligned with your product vision and strategy. You can also ensure that your goals are actionable, trackable, and communicable. And most importantly, you can ensure that your goals are impactful, and that you are creating value for your customers and your organization.

References - I have found the following books extremely useful in learning about goal setting, tracking and communicating. Check these out to dive deeper
1. Outcomes Over Output: Why customer behavior is the key metric for business success
2. Measure What Matters