Measure What Matters: OKRs: The Simple Idea that Drives 10x Growth
“As much as I hate process, good ideas with great execution are how you make magic. And that’s where Objectives and Key Results come in” Larry Page, Google Cofounder and Alphabet CEO
What really matters and how will you measure it?
What has made Google one of the most valuable companies in the world and ranked by Fortune magazine as number one on the list for ‘Best Companies to Work For?’ While there are many reasons for their success, Eric Schmidt, former executive chairman of Google, credits OKRs – Objectives and Key Results – as changing the course of the company forever.
The concept was introduced to Google by the book’s author, John Doerr, one of the world’s most successful investors. Doerr learnt about OKRs from Andy Grove who he worked with at Intel and who he credits with being the greatest manager of his or any era. Doerr’s own OKRs when he first joined as an intern were pinned by his desk so that everyone could see what his focus was: Objective: Demonstrate the 8080’s superior performance as compared to the Motorola 6800
- Deliver five benchmarks
- Develop a demo
- Develop sales training materials for the field force
- Call on three customers to prove the material works
Doerr first outlined OKRs to Google as ‘a management methodology that helps to ensure the company focuses efforts on the same important issues throughout the organisation’. Good OKR systems that inspire employees and improve performance should:
- Link goals to a broader mission
- Respect targets and deadlines while adapting to circumstances
- Promote feedback and celebrate wins, large and small
- Reward ‘good fails’
- Expand limits
The author views structured goal setting as like a Swiss Army knife, suited to any environment – from a survival tool for smaller start-ups to demolishing silos in larger organisations. Hundreds of companies, like Google, Spotify, Disney, BMW and LinkedIn are using them to align staff to corporate goals. The book provides in-depth contributions from organisations that have used OKRs, including:
- This health and fitness app has a clear mission to create a healthy planet. In 2013, when Doerr’s company first invested in it, it had 45 million registered users and today it has more than 120 million. Founded by two brothers, they started with simple goals such as – launch an iPad app by a certain date – and their growth soon shot off the charts, causing problems with new teams heading off in different directions. In 2015 the company was acquired by Under Armour, which brought even more challenges of alignment. Mike Lee, cofounder and CEO, said that when they jumped from 10 to 30 people he assumed they would become 200 per cent more productive, but he’d underestimated how much scaling up slows you down – the shared engineering team were being pulled in different directions and efficiency dragged
- As time went by, their OKR process improved – objectives got more precise, key results more measurable, and achievement rates higher. An example of one of their high level objectives was:
- Objective: Help more people around the world
- Key results:
- 1) Add 27m users in 2014
- 2) Reach 80m total registered users
- Lee believes every decision they make needs to square with their vision. When they face a trade-off between customers and a business goal, they align with the customer, and if an objective seems out of line with their mantra, it gets extra scrutiny
- The design software company ditched annual reviews when it realised that managers invested eight hours per employee and lost staff every February when demoralised employees took their talent elsewhere. Adobe was transitioning to a cloud-based subscription model, but its HR systems remained shackled in the past
- They created ‘Check-in’ – a lightweight, flexible and transparent structure with no tracking or paperwork – described in detail at: https://www.adobe.com/check-in.html
- The check-ins encompass three areas: quarterly goals and expectations (Adobe’s term for OKRs), regular feedback, and career development and growth. Managers are trained to scale compensation on performance, impact on the business and scarcity of their skills and market conditions, separately to the review. Resources such as how to handle difficult conservations are openly available. There are no fixed guidelines and since implementation in 2012, voluntary attrition has dropped sharply
In the practical resources section of the book, which includes details of Google’s recommendations for setting OKRs, Doerr outlines a typical OKR timeline for an organisation setting company, team and contributor goals. This process continues throughout the year as progress is tracked and brainstorms for OKRs begin for the next quarter:
- 4-6 weeks before quarter: Brainstorm annual and Q1 OKRs for company – senior leaders start brainstorming top-line company OKRs and set out an annual plan
- 2 weeks before quarter: Communicate company-wide OKRs for upcoming year and Q1
- Start of quarter: Communicate team Q1 OKRs – teams develop their own OKRs based on the company’s OKRs
- 1 week after start of quarter: Share employee Q1 OKRs – contributors share their own OKRs – this may require negotiation between contributors and managers
- Throughout quarter: Employees track progress and check-in – employees measure and share their progress with their managers
- Near end of quarter – Employees reflect and score Q1 OKRs – performing their own self-assessment
Setting goals like these has moved on from the classic Management by Objectives of the 60s which focussed on the what, not the how, and often got buried as they sluggishly trickled down the hierarchy. Doerr believes that Objectives and Key Results can be used by anyone in any type of organisation, and even by children at school. They will be refined as time goes on, but Doerr has found them a proven force for operating excellence – they have worked for Google and many others, so why not for you?
About the author
John Doerr is an engineer, venture capitalist and chairman at Kleiner Perkins and was appointed to the President’s Economic Recovery Advisory Board in 2009. John was an original investor and board member at Google and Amazon, helping to create more than half a million jobs and the world’s second and third most valuable companies. Doerr works with social entrepreneurs for change in public education, the climate crisis, and global poverty and serves on the board of the Obama Foundation and ONE.org. In February 2009, Forbes ranked Doerr as the 105th richest person in the US with a net worth of $7.5 billion in 2018. More information can be found at https://www.whatmatters.com
“Measure What Matters is about using Objectives and Key Results (OKRs), a revolutionary approach to goal-setting, to make tough choices in business. Doerr shares a broad range of first person, behind-the-scenes case studies, with narrators including Bono and Bill Gates, to demonstrate the focus, agility, and explosive growth that OKRs have spurred at so many great organizations. This book will show you how to collect timely, relevant data to track progress — to measure what matters. It will help any organization or team aim high, move fast, and excel.”
UK Business Insider
“I’d recommend John’s book for anyone interested in becoming a better manager.”
“Measure What Matters deserves to be fully embraced by every person responsible for performance, in any walk of life. John Doerr makes Andy Grove a mentor to us all. If every team, leader, and individual applied OKRs with rigour and imagination, all sectors of society could see an exponential increase in productivity and innovation.”
Jim Collins, author of Good to Great**Legendary venture capitalist John Doerr reveals how the goal-setting system of Objectives and Key Results (OKRs) has helped tech giants from Intel to Google achieve explosive growth—and how it can help any organization thrive.In the fall of 1999, John Doerr met with the founders of a start-up whom he’d just given $12.5 million, the biggest investment of his career. Larry Page and Sergey Brin had amazing technology, entrepreneurial energy, and sky-high ambitions, but no real business plan. For Google to change the world (or even to survive), Page and Brin had to learn how to make tough choices on priorities while keeping their team on track. They’d have to know when to pull the plug on losing propositions, to fail fast. And they needed timely, relevant data to track their progress—to measure what mattered.
Doerr taught them about a proven approach to operating excellence: Objectives and Key Results. He had first discovered OKRs in the 1970s as an engineer at Intel, where the legendary Andy Grove (“the greatest manager of his or any era”) drove the best-run company Doerr had ever seen. Later, as a venture capitalist, Doerr shared Grove’s brainchild with more than fifty companies. Wherever the process was faithfully practiced, it worked.
In this goal-setting system, objectives define what we seek to achieve; key results are how those top-priority goals will be attained with specific, measurable actions within a set time frame. Everyone’s goals, from entry level to CEO, are transparent to the entire organization.
The benefits are profound. OKRs surface an organization’s most important work. They focus effort and foster coordination. They keep employees on track. They link objectives across silos to unify and strengthen the entire company. Along the way, OKRs enhance workplace satisfaction and boost retention.
In Measure What Matters, Doerr shares a broad range of first-person, behind-the-scenes case studies, with narrators including Bono and Bill Gates, to demonstrate the focus, agility, and explosive growth that OKRs have spurred at so many great organizations. This book will help a new generation of leaders capture the same magic.
Author: John Doerr