Measure What Matters

John Doerr, 2017

Table of contents

OKRs
Management by Objectives (MBO)
Four Superpowers of OKRs
Continuous Performance Management
Culture
Thoughts

Ideas are easy. Execution is everything.

OKRs

Objectives and Key Results is a collaborative goal-setting protocol for companies, teams, and individuals

OBJECTIVE - WHAT is to be achieved

significant, concrete, action-oriented, and ideally, inspirational
vaccine against fuzzy thinking and fuzzy execution

KEY RESULTS - HOW we get to the objective

specific, time-bound, aggressive yet realistic
need to be measurable and verifiable

We will achieve a certain OBJECTIVE as measured by the following KEY RESULTS

OKRs surface primary goals, channeling effort and coordination
link diverse operations, lending purpose and unity to entire org
hard, specifically worded goals drive performance more effectively than easy, vague ones
also drive engagement, and more highly engaged workers and teams equals more profit, less attrition, more job satisfaction

Management by Objectives (MBO)

precursor to OKRs
early management theory of Frederick Winslow Taylor and Henry Ford held that most efficient and profitable organization is authoritarian
scientific management is “knowing exactly what you want men to do and then see that they do it in the best and cheapest way”
later, Peter Drucker came along with results-driven and humanistic change – corporation should be a community, subordinates consulted on company goals
Andy Grove of Intel took these principles, which were typically for manufacturing, and applied to “soft professions”
key question: how do you measure productivity of knowledge workers and distinguish output and activity

Four Superpowers of OKRs

1: Focus and Commit to Priorities

Set the appropriate cadence for your OKR cycle. I recommend dual tracking, with quarterly OKRs (for shorter-term goals) and annual OKRs (keyed to longer-term strategies) deployed in parallel.
To work out implementation kinks and strengthen leaders’ commitment, phase in your rollout of OKRs with upper management first. Allow the process to gain momentum before enlisting individual contributors to join in.
Designate an OKR shepherd to make sure that every individual devotes the time each cycle to choosing what matters most.
Commit to three to five top objectives—what you need to achieve—per cycle. Too many OKRs dilute and scatter people’s efforts. Expand your effective capacity by deciding what not to do, and discard, defer, or deemphasize accordingly.
In choosing OKRs, look for objectives with the most leverage for outstanding performance.
Find the raw material for top-line OKRs in the organization’s mission statement, strategic plan, or a broad theme chosen by leadership.
To emphasize a departmental objective and enlist lateral support, elevate it to a company OKR.
For each objective, settle on no more than five measurable, unambiguous, time-bound key results—how the objective will be attained. By definition, completion of all key results equates to the attainment of the objective.
For balance and quality control, pair qualitative and quantitative key results.
When a key result requires extra attention, elevate it into an objective for one or more cycles.
The single most important element for OKR success is conviction and buy-in by the organization’s leaders.

2: Align and Connect for Teamwork

Incentivize employees by showing how their objectives relate to the leader’s vision and the company’s top priorities. The express route to operating excellence is lined with transparent, public goals, on up to the CEO.
Use all-hands meetings to explain why an OKR is important to the organization. Then keep repeating the message until you’re tired of hearing it yourself.
When deploying cascaded OKRs, with objectives driven from the top, welcome give-and-take on key results from frontline contributors. Innovation dwells less at a company’s center than at its edges.
Encourage a healthy proportion of bottom-up OKRs—roughly half.
Smash departmental silos by connecting teams with horizontally shared OKRs. Cross-functional operations enable quick and coordinated decisions, the basis for seizing a competitive advantage.
Make all lateral, cross-functional dependencies explicit.
When an OKR is revised or dropped, see to it that all stakeholders know about it.

3: Track for Accountability

To build a culture of accountability, install continuous reassessment and honest and objective grading—and start at the top. When leaders openly admit their missteps, contributors feel freer to take healthy risks.
Motivate contributors less with extrinsic rewards and more with open, tangible measures of their achievement.
To keep OKRs timely and relevant, have the designated shepherd ride herd over regular check-ins and progress updates. Frequent check-ins enable teams and individuals to course-correct with agility, or to fail fast.
To sustain high performance, encourage weekly one-on-one OKR meetings between contributors and managers, plus monthly departmental meetings.
As conditions change, feel free to revise, add, or delete OKRs as appropriate—even in mid-cycle. Goals are not written in stone. It’s counterproductive to hold stubbornly to objectives that are no longer relevant or attainable.
At the cycle’s end, use OKR grades plus subjective self-assessments to evaluate past performance, celebrate achievements, and plan and improve for the future. Before pushing into the next cycle, take a moment to reflect upon and savor what you’ve accomplished in the last one.
To keep OKRs up-to-date and on point, invest in a dedicated, automated, cloud-based platform. Public, collaborative, real-time goal-setting systems work best.

4: Stretch for Amazing

At the beginning of each cycle, distinguish between goals that must be attained 100 percent (committed OKRs) and those that are stretching for a Big Hairy Audacious Goal (a BHAG, or aspirational OKR).
Establish an environment where individuals are free to fail without judgment.
To stimulate problem solving and spur people to greater achievement, set ambitious goals—even if it means some quarterly targets will be missed. But don’t set the bar so high that an OKR is obviously unrealistic. Morale suffers when people know they can’t succeed.
To get leaps in productivity or innovation, follow Google’s “Gospel of 10x” and replace incremental OKRs with exponential ones. That’s how industries get disrupted and categories reinvented.
Design stretch OKRs to fit the organization’s culture. A company’s optimal “stretch” may vary over time, depending on the operating needs of the coming cycle.
When a team fails to attain a stretch OKR, consider rolling the objective over to the next cycle—assuming the goal is still relevant.

Continuous Performance Management

To address issues before they become problems and give struggling contributors the support they need, move from annual performance management to continuous performance management.
Unleash ambitious goal setting by divorcing forward-looking OKRs from backward-looking annual reviews. Equating goal attainment to bonus checks will invite sandbagging and risk-averse behavior.
Replace competitive ratings and stack rankings with transparent, strength-based, multidimensional criteria for performance evaluations. Beyond the numbers, consider a contributor’s team play, communication, and ambition in goal setting.
Rely on intrinsic motivations—purposeful work and opportunities for growth—over financial incentives. They’re far more powerful.
To power positive business results, implement ongoing CFRs (conversations, feedback, and recognition) in concert with structured goal setting. Transparent OKRs make coaching more concrete and useful. Continuous CFRs keep day-to-day work on point and genuinely collaborative.
In performance-driving conversations between managers and contributors, allow the contributor to set the agenda. The manager’s role is to learn and coach.
Make performance feedback two-way, ad hoc, and multidirectional, unconstrained by the org chart.
Use anonymous “pulse” surveys for real-time feedback on particular operations or general morale.
Strengthen connections between teams and departments with peer-to-peer feedback, in conjunction with cross-functional OKRs.
Employ peer recognition to enhance employee engagement and performance. For maximum impact, recognition should be frequent, specific, highly visible, and tied to top-line OKRs.

Culture

Align top-line OKRs with an organization’s mission, vision, and North Star values.
Convey cultural values by word, but most of all by deed.
Promote peak performance with collaboration and accountability. When OKRs are collective, assign key results to individuals—and hold them accountable.
To develop a high-motivation culture, balance OKR “catalysts,” actions that support the work, with CFR “nourishers,” acts of interpersonal support or even random acts of kindness.
Use OKRs to promote transparency, clarity, purpose, and big-picture orientation. Deploy CFRs to build positivity, enthusiasm, stretch thinking, and daily improvement.
Be alert to the need to address cultural barriers, especially issues of accountability and trust, before implementing OKRs.

Thoughts

There’s seldom a business book where the epitaph “could’ve been a blog post” doesn’t apply. This book is no exception. Ensconced in a compendium of self-fulfilling case studies justifying this particular management methodology (of course it worked for company x, otherwise it wouldn’t be in the book) is an interesting idea, that you are what you measure. You define Objectives, which are the aspirational what of what you want to achieve, and Key Results, or the quantifiable how of how you will achieve that what. But don’t expect for this book to give heuristics on finding what matters. This is a book for justifying its website and consultancy fees, a book credentialing itself with a who’s who of Silicon Valley buddies that John Doerr has worked with during his illustrious career.

Ok, that criticism might not be entirely fair. I did quite enjoy the case studies, and there might not be a more credentialed venture capitalist (Walter Isaacson calls him “the most important venture capitalist of our era” on the back jacket) to give this advice. One thing I find immensely valuable as a technologist, under the notion that most problems aren’t new or haven’t been solved at least once before, is learning about how other companies have solved their problems, and while I typically concentrate on technology, people and process problems can be just as insightful, if not filled with a bit more subjective hokum and methodology peddling.

OKRs work, but like so many other management ideologies, they work because they are deliberate in the actions they argue for, the culture they foster. They form the chaos of intentionless business practice, salve the cut between HR-mandated practice adhered to by rote and work in the trenches. Everyone has worked for a manager who, if asked what their job entails as manager, might regurgitate some vague notions of “people” skills straight from their job description, but methodologies like OKR might enforce a more thoughtful approach to what it means to be a people manager, what it means to inspire.

Outside of being a potentially useful management tactic, there might be some use for personal development as well. What you pay attention to is often just as important as how you work, and OKRs might be a clarifying exercise. I’ve found I might be passively using something like Objectives and Key Results to drive learning. If I want to be a better technologist, that means reading a tech book a month, and completing this year’s Advent of Code in a new programming language, and reading 5 technology articles a week. I want to be a better writer, so I need to write reviews on all books I read, and read 8 books a month. Fortunately, I have an OKR platform where I can assess my progress against those implicit goals.

All else being equal, the book justifies its price of entry, but all the same old criticisms of business books apply. For a few hours of time, this is as good as any argument for measuring what matters.