Measure What Matters
In the book Measure What Matters, John Doerr explores the system of OKRs using testimonials from Sundar Pichai, Susan Wojcicki, Bill Gates, Bono, and many others. Each tells a story about how measuring improvement with OKRs transformed their business and culture.
What is an OKR?
OKRs is short for Objectives and Key Results. Essentially, it’s a system where you identify an objective and track your performance on that objective with a set of measurable results. Each objective should have 4-5 key results attached, however, each individual should only be pursuing 3-5 objectives at a given time. The purpose of this approach is to not only be scoped and focused, but to also create a mechanism for greater organizational transparency and accountability.
This approach was pioneered by the late Andy Grove and while it was born within the halls of Intel, OKRs have been adopted by many others organizations (e.g. AOL, LinkedIn, Dropbox, Oracle, Slack, Spotify, Twitter, BMW, Disney, and the Bill and Melinda Gates Foundation - just to name a few).
What makes OKRs successful?
According to the proponents of OKRs, the system makes clear to everyone in the organization what the priorities are. The most committed organizations make their OKRs available for everyone in the company to see; from the CEO to the lowest-level contributor.
The objective establishes the goal that you want to achieve. The key results identify what measurable milestones you will achieve toward that goal. The thinking is that ff OKRs are visible to everyone, it allows for an honest dialog about the goals each person is pursuing and how they plan to get there.
Doerr uses an analogy of a professional football team to explain the OKR approach.
Imagine that the objective of the head coach is for the team to win the Super Bowl (obviously). He then will determine the 3 key results that he believes will help the team reach the Super Bowl:
Win the Super Bowl
- Passing attack amasses 300+ yards per game.
- Defense allows fewer than 17 points per game.
- Special teams unit ranks in top 3 punt return coverage.
Additionally, you can imagine that OKRs could have a cascading effect (although they don’t have to).
For example, the Offensive Coach might have key results that are tied to improving the teams passing yardage or the Special Teams Coach might have key results that measure the yardage gains on punt returns. You could imagine these key results cascading all the way down to the players, the front office, and even the support staff. Key results must be measurable and demonstrate that it can lead to achieving the objective.
In the world of OKRs, everyone in the organization knows what the objective is and how each individual plans to get there (and more importantly how they’re progressing against their goals). It makes it difficult for people to “sandbag” (i.e. deliberately set easy goals) or under-perform while hiding in the shadows. Promoters of OKRs claim it’s ruthlessly transparent.
Organizational Super Powers
Doerr expands on the merits of OKRs by suggesting they give organizations 4 unique “superpowers”:
Superpower #1: Focus and Commit Priorities
With OKRs it’s hard to get side tracked. If a director would like her team to work on a new objective, she must evaluate how it will effect current objectives. She’s forced to say “no” to a current objective in order to say “yes” to another. If an employee finds the landscape has changed and a key result is no longer meaningful, he has the option of updating or revising it - without changing the overall objective.
Superpower #2: Align and Connect for Teamwork
OKRs create a common language for manager to employee communications as well as cross-divisional team planning and strategy. Key results can be adjusted, debated, and constantly reflected on; without changing the overall objective. It inspires teams to help each other because they can see their dependencies and how they’re inter-related.
Going back to the football analogy, if the Special Teams coach sees that the Defensive Coach is struggling to achieve his key result (allowing fewer than 17 points per game), he might set a key result for his team that states they must punt the ball consistently within 10 yards of the opposing team’s end zone (thus giving the defense a better chance of preventing the other team from scoring).
Superpower #3: Track for Accountability
OKRs should not be punitive. In fact, Doerr suggests that OKRs should be completely separated from employee’s performance reviews and bonus evaluations. The goal with OKRs is to actually separate the employee from their performance. It sets up a structure for frequent check-ins and objective progress monitoring. Managers and employees can focus on the progress of the key metric (not the employee) and develop strategies to remove blockers or provide assistance.
Superpower #4: Stretch for the Amazing
Under the right culture (and mindset), OKRs can be liberating. Employees should feel a sense of structure and clarity. They know exactly what is expected of them. They see how their work directly affects the bottom line and they understand how their work impacts others.
If you’re continuously meeting your objectives or your key results are “all green”. That’s an indication that you’re not pushing yourself hard enough. In fact, many of the testimonials in the book suggest that it’s unhealthy for an organization to not have some key results “in the red”. It’s an indication that the organization isn’t challenge itself.
Doerr suggests that the structure of OKRs creates a culture of “psychological safety” that will encourage individuals to take risks and shoot for audacious objectives.