Measure What Matters
By John Doerr
“How Google, Bono and the Gates Foundation Rock The World with OKRs”
I will (Objective) as measured by (this set of Key Results).
John Doerr — A Brief Introduction
John Doerr initially worked for Intel and became one of it’s top sales people. In 1980 he joined Kleiner Perkins,one of Silicon Valley’s pre-eminent VC firms, where he currently sits as Chair.He has led initial investment roads in Google (where he serves on the board), Amazon (where he was a previous board member), NetScape and Intuit. Measure What Matters is born from John’s time at Intel under Andy Grove (the godfather of OKRs).
OKRs — Objectives & Key Results
John describes how after decades watching startups grow and fail he has to a single mantra — Ideas are easy. Execution is everything.
What are OKRs ?— It is a collaborative goal-setting protocol for companies, teams and individuals. Objectives are high level goals. Key results are measurable way points to achieving objectives.
Later John brought this philosophy to Google. He describes his first presentation on OKRs to the google team:
- His first slide read-OKRs are a “Management methodology that helps to ensure that the company focuses efforts on the same important issues through the organization”.
- An OBJECTIVE is simply WHAT has to be achieved. When designed properly its a vaccine against fuzzy thinking.
- KEY RESULTS benchmark and monitor HOW we get to the objective. KEY RESULTS are measurable and should be a number. You either meet it or you don’t with no grey area.
Intel and Andy Grove
Andy Grove was a co-founder,Chairman and CEO of Intel and graced the cover of Time as “Man of the Year” in 1997. When John joined Intel him and his young colleagues were given a talk by Andy at Intel’s Organization, Philosophy and Economics course, known as iOPEC.
Grove describes how at Intel what you know didn’t matter. All that mattered is what you can accomplish — “It’s what you can do with whatever you known or can acquire and actually accomplish that tends to be valued here…hence the slogan Intel Delivers”.
Grove then outlined OKRs for the class. He describes an example Objective as “We want to dominate the mid-range microcomputer component business” where a quarterly key result would be “Win ten new designs for computer X” with this being a milestone. “The key result has to be measurable. But at the end you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it. Now, did we dominate the mid-range microcomputer business? That’s for us to argue in the years to come…”.
Andy Grove’s OKR Basics
- Less is more:A limit of three to five OKRs per cycle.
- Bottom-up: Individuals should be encouraged to create their own OKRs. Upper management simply “set the context [top-line objectives], ask the big questions, and furnish relevant data,” giving employees the autonomy to innovate.
- Flexible:If the climate has changed and an objective is no longer relevant it can be discarded.
- A tool, not a weapon:It is meant to “pace a person-to put a stopwatch in his own hand so he can gauge his own performance. It is not a legal document upon which to base a performance review”.
- Completion of all key results must result in attainment of the objective. If not, it’s not an OKR.
The 4 Superpowers of OKRs
Superpower #1 — High-performance organizations home in on work that’s important, and are equally clear on what doesn’t matter. OKRs impel leaders to make hard choices. They’re a precision communication tool for departments, teams, and individual contributors. By dispelling confusion, OKRs give us the focus needed to win.
Superpower #2 — Align and Connect for Teamwork: With OKR transparency, everyone’s goals — from the CEO down — are openly shared. Individuals link their objectives to the company’s game plan, identify cross-dependencies, and coordinate with other teams. By connecting each contributor to the organization’s success, top-down alignment brings meaning to work. By deepening people’s sense of ownership, bottom-up OKRs foster engagement and innovation.
Superpower #3 — Track for Accountability: OKRs are driven by data. They are animated by periodic check-ins, objective grading, and continuous reassessment — all in a spirit of no-judgment accountability. An endangered key result triggers action to get it back on track, or to revise or replace it if warranted.
Superpower #4 — Stretch for Amazing: OKRs motivate us to excel by doing more than we’d thought possible. By testing our limits and affording the freedom to fail, they release our most creative, ambitious selves.
The Perfect and the Good
When making OKRs, to paraphrase Voltaire, “Don’t allow the perfect to be the enemy of the good”. An OKR can be modified or crapper at any point in the Cycle.
Less Is More
Too many objectives can blur our focus on what counts or distract us. As Andy Grove said:
“The one thing an OKR system can provide par excellence is focus. This can only happen if we keep the number of objectives small…Each time you make a commitment, you forfeit your change to commit to something else….The art of management lies in the capacity to select from the many activities of seemingly comparable significance the one or two or three that provide leverage well beyond the others and concentrate on them.”
Transparency
“We don’t hire smart people to tell them what to do. We hire smart people so they can tell us what to do” — Steve Jobs
Public goals get achieved more often then private goals. In an OKR system, all objectives and key results are shared for all to see from the most junior employee to CEO. In larger organizations, it’s common to find several people working on the same thing. By clearing a line of sight to everyone’s objectives, OKRs expose redundant efforts.
With Transparency all employees are aligned. Studies suggest that only 7% of employees fully understand their business’s strategy and what’s expected of them to achieve these common goals.
Scoring
When scoring an OKR you can use a scale of 0 to 1.0.
- 0.7–1: indicates that a goal has been hit.
- 0.4–0.6: We made progress, but fell short of completion.
- 0–0.3: Failed to make real progress.
An average can then be taken on the key results to give an top-line objective score.
Stretch For Amazing
John writes that OKRs should push us beyond our comfort zone. As Bill Campbell liked to say “If companies don’t continue to innovate, they’re going to die-and I didn’t say iterate, I said innovate.”
Studies have shown that the harder the goal the higher the level of performance with stretched workers not only being more productive but more motivated and engaged. At Google, inspirational OKRs are set at 60–70% attainment with performance expected to fall short at least 30% of the time.
Google’s Playbook — From WhatMatters.com
In October 2018, for the seventy-fifth consecutive quarter, Google’s CEO will lead the entire company to evaluate its progress against top-level objectives and key results. In November and December, each team and product area will develop its own plans for the coming year and distill them into OKRs. The following January, as CEO Sundar Pichai told me, “We’ll go back in front of the company and articulate, ‘This is our high-level strategy, and here are the OKRs we have written for the year.’”
“ We use OKRs to plan what people are going to produce, track their progress vs. plan, and coordinate priorities and milestones between people and teams. We also use OKRs to help people stay focused on the most important goals, and help them avoid being distracted by urgent but less important goals.”
“ OKRs are big, not incremental — we don’t expect to hit all of them. (If we do, we’re not setting them aggressively enough.) We grade them with a color scale to measure how well we did: 0.0–0.3 is red 0.4–0.6 is yellow 0.7–1.0 is green”
Objectives are the “Whats.” They: — express goals and intents; — are aggressive yet realistic; — must be tangible, objective, and unambiguous; should be obvious to a rational observer whether an objective has been achieved. — The successful achievement of an objective must provide clear value for Google.
Key Results are the “Hows.” They: — express measurable milestones which, if achieved, will advance objective(s) in a useful manner to their constituents; — must describe outcomes, not activities. If your KRs include words like “consult,” “help,” “analyze,” or “participate,” they describe activities. Instead, describe the end-user impact of these activities: “publish average and tail latency measurements from six Colossus cells by March 7,” rather than “assess Colossus latency”; — must include evidence of completion. This evidence must be available, credible, and easily discover-able. Examples of evidence include change lists, links to docs, notes, and published metrics reports.
