Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs

by John Doerr

Leaders must get across the why as well as the what. Their people need more than milestones for motivation. They are thirsting for meaning, to understand how their goals relate to the mission. And the process can’t stop with unveiling top-line OKRs at a quarterly all-hands meeting. As LinkedIn CEO Jeff Weiner likes to say, “When you are tired of saying it, people are starting to hear it.”

Key results are the levers you pull, the marks you hit to achieve the goal. If an objective is well framed, three to five KRs will usually be adequate to reach it.

each key result should be a challenge in its own right. If you’re certain you’re going to nail it, you’re probably not pushing hard enough.

Since OKRs are a shock to the established order, it may make sense to ease into them. Some companies begin with an annual cycle as they transition from private to public goal setting, or from a top-down process to a more collaborative one. The best practice may be a parallel, dual cadence, with short-horizon OKRs (for the here and now) supporting annual OKRs and longer-term strategies. Keep in mind, though, that it’s the shorter-term goals that drive the actual work. They keep annual plans honest—and executed.

In my experience, a quarterly OKR cadence is best suited to keep pace with today’s fast-changing markets.

In High Output Management, his leadership bible, Andy Grove notes: For the feedback to be effective, it must be received very soon after the activity it is measuring occurs. Accordingly, an [OKR] system should set objectives for a relatively short period. For example, if we plan on a yearly basis, the corresponding [OKR] time should be at least as often as quarterly or perhaps even monthly.

A monthly cycle could do the trick for an early-stage company still finding its product-market fit. The best OKR cadence is the one that fits the context and culture of your business.

A few goal-setting ground rules: Key results should be succinct, specific, and measurable. A mix of outputs and inputs is helpful. Finally, completion of all key results must result in attainment of the objective. If not, it’s not an OKR.*

As Steve Jobs understood, “Innovation means saying no to one thousand things.” In most cases, the ideal number of quarterly OKRs will range between three and five. It may be tempting to usher more objectives inside the velvet rope, but it’s generally a mistake. Too many objectives can blur our focus on what counts, or distract us into chasing the next shiny thing.

Once contributors have consulted with their managers and committed to their OKRs for the quarter, any add-on objectives or key results must fit into the established agenda.

The one thing an [OKR] system should 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 chance to commit to something else. This, of course, is an inevitable, inescapable consequence of allocating any finite resource. People who plan have to have the guts, honesty, and discipline to drop projects as well as to initiate them, to shake their heads “no” as well as to smile “yes.” . . . We must realize—and act on the realization—that if we try to focus on everything, we focus on nothing.

OKRs are neither a catchall wish list nor the sum of a team’s mundane tasks. They’re a set of stringently curated goals that merit special attention and will move people forward in the here and now.

“The art of management,” Grove wrote, “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.”

For decades, companies have tried to boost student achievement by injecting technology into schools. It hasn’t worked. But suddenly, while nobody was looking, tens of millions of American kids walked into the classroom with a transformational piece of tech in their pockets. Thanks to the pervasive smartphone, text messaging became the leading mode of teenage communication. Remind found a market opportunity: to make texting a secure and practical communication system for principals, teachers, students, and parents.

I found Brett highly skilled at identifying priorities and enlisting others to buy in. In 2012, he and his brother David made the Forbes honor roll of “30 Under 30 Education.” But with accelerating scale, their company needed more focus. OKRs guaranteed a process that they’d already begun.

Remind kept scaling like crazy on our seed-capital shoestring. Sometimes—most of the time—it felt like the sorcerer’s apprentice, moving really fast and out of control. At one point we were adding eighty thousand users a day when we had five people, and only two of us were engineers. We’d yet to spend a dime on marketing.

Then I’d squeeze in a few quarterly initiatives: migrate the databases, build the app, hire four people. I wanted everyone in the company to see just what we were doing.

OKRs helped enormously by helping people to focus on what could move the company to the next level. To meet our objective for teacher engagement, with its time-bound key result, we had to defer many other things. In my view, you can only do one big thing at a time really well, and so you better know what that one thing is.

OKRs are basically simple, but you don’t master the process off the bat. Early on, we’d be off by miles in our company-level objectives, mostly on the way-too-ambitious side. We might set seven or eight of them when we had the capacity for two, at best. When John entered our lives, I was new to strategic planning. We probably should have eased into OKRs more slowly and not installed the whole system at once. But whatever our mistakes, I’d do it again in a heartbeat. OKRs helped Remind become a better-managed company, a company that executes.

Alongside focus, commitment is a core element of our first superpower. In implementing OKRs, leaders must publicly commit to their objectives and stay steadfast.

When I joined Google in 2004, my first job out of college, I’d never heard of OKRs. But over time, they became an indispensable compass to help me and my teams navigate through Google and get the most important work done. One of the first products I worked on, Google Health, taught me the importance of data for improving health care. I also learned just how difficult it can be to gain access to health care data, even one’s own.

To inspire true commitment, leaders must practice what they teach. They must model the behavior they expect of others. After sharing my individual OKRs at an all-hands meeting, I was surprised by just how much it helped the company rally around the process. It showed everyone that I, too, was accountable. Our contributors feel free to evaluate my OKRs and tell me how to improve them, which has made all the difference.

By definition, start-ups wrestle with ambiguity. As Nuna’s terrain has expanded, from self-insured employers to the massive Medicaid database to a suite of new health plan products, we’ve come to rely on OKRs more than ever. Our whole team needs sharper focus and clearer priorities, the prerequisites for deeper commitment. OKRs have forced a bunch of conversations in the company that otherwise would not have happened. We’re getting more alignment. Instead of reacting to external events on the fly, we’re acting purposefully on our plans for each quarter. Our deadlines are stricter, yet they also feel more attainable. We’re committed to doing what we’ve said we will do.

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

With the eruption of social media, transparency is the default setting for our daily lives. It’s the express lane to operating excellence. Yet at most companies today, goals remain secrets.

Research shows that public goals are more likely to be attained than goals held in private. Simply flipping the switch to “open” lifts achievement across the board.

When people write down “This is what I’m working on,” it’s easier to see where the best ideas are coming from. Soon it’s apparent that the individuals moving up are the ones doing what the company most values.

Transparency seeds collaboration. Say Employee A is struggling to reach a quarterly objective. Because she has publicly tracked her progress, colleagues can see she needs help. They jump in, posting comments and offering support. The work improves. Equally important, work relationships are deepened, even transformed. In larger organizations, it’s common to find several people unwittingly working on the same thing. By clearing a line of sight to everyone’s objectives, OKRs expose redundant efforts and save time and money.

“We’ve got a lot of stuff going on,” says Amelia Merrill, an HR leader at RMS, a California risk modeling agency. “We’ve got people in multiple offices in multiple time zones—some doing parallel work, some doing work together. And it’s really hard for employees to see what they should work on first. Everything seems important; everything seems urgent. But what really needs to get done?”

As a species, we crave connection. In the workplace, we’re naturally curious about what our leaders are doing and how our work weaves into theirs. OKRs are the vehicle of choice for vertical alignment.

Goals were handed down the org chart like tablets from Mount Sinai. Senior executives set top-line objectives for their department heads, who passed them to the next tier of management, and so on down the line. While this approach to goal-setting is no longer universal, it remains prevalent at most larger organizations. The appeal is obvious. Cascaded goals corral lower-level employees and guarantee that they’re working on the company’s chief concerns. In the best case, cascading forges unity; it makes plain that we’re all in this together.

In moderation, cascading makes an operation more coherent. But when all objectives are cascaded, the process can degrade into a mechanical, color-by-numbers exercise, with four adverse effects:

A loss of agility. Even medium-size companies can have six or seven reporting levels. As everyone waits for the waterfall to trickle down from above, and meetings and reviews sprout like weeds, each goal cycle can take weeks or even months to administer. Tightly cascading organizations tend to resist fast and frequent goal setting. Implementation is so cumbersome that quarterly OKRs may prove impractical.

A lack of flexibility. Since it takes so much effort to formulate cascaded goals, people are reluctant to revise them mid-cycle. Even minor updates can burden those downstream, who are scrambling to keep their goals aligned. Over time, the system grows onerous to maintain.

Marginalized contributors. Rigidly cascaded systems tend to shut out input from frontline employees. In a top-down ecosystem, contributors will hesitate to share goal-related concerns or promising ideas.

One-dimensional linkages. While cascading locks in vertical alignment, it’s less effective in connecting peers horizo...

Considering that Google has tens of thousands of employees, its innovative culture would be hamstrung by OKRs cascaded by rote. As Laszlo Bock, a former head of the company’s People Operations, observes in Work Rules!: Having goals improves performance. Spending hours cascading goals up and down the company, however, does not. . . . We have a market-based approach, where over time our goals all converge because the top OKRs are known and everyone else’s OKRs are visible. Teams that are grossly out of alignment stand out, and the few major initiatives that touch everyone are easy enough to manage directly.

As Andy Grove observed, “People in the trenches are usually in touch with impending changes early. Salespeople understand shifting customer demands before management does; financial analysts are the earliest to know when the fundamentals of a business change.”

Micromanagement is mismanagement. A healthy OKR environment strikes a balance between alignment and autonomy, common purpose and creative latitude. The “professional employee,” Peter Drucker wrote, “needs rigorous performance standards and high goals. . . . But how he does his work should always be his responsibility and his decision.”

“The higher the goals, the higher the performance.” People who choose their destination will own a deeper awareness of what it takes to get there.

When our how is defined by others, the goal won’t engage us to the same degree.

In times of operational urgency, when simple doing takes precedence, organizations may choose to be more directive. But when the numbers are strong and a company has grown too cautious and buttoned-up, a lighter touch may be just right. When leaders are attuned to the fluctuating needs of both the business and their employees, the mix of top-down and bottom-up goals generally settles at around half-and-half. Which sounds about right to me.

For innovation and advanced problem solving, isolated individuals cannot match a connected group. Product relies on engineering, marketing on sales. As business becomes more intricate and initiatives more complex, interdependent divisions need a tool to help them reach the finish line together.

When goals are public and visible to all, a “team of teams” can attack trouble spots wherever they surface. Adds Bock: “You can see immediately if somebody’s hitting the ball out of the park—you investigate. If somebody’s missing all the time, you investigate. Transparency creates very clear signals for everyone. You kick off virtuous cycles that reinforce your ability to actually get your work done. And the management tax is zero—it’s amazing.”

When we began to implement OKRs, it was harder than anticipated. We didn’t appreciate how much thought it took to create the right company objectives, and then to cascade them down to drive contributors’ behavior. We found it challenging to strike a balance between high-level, strategic thinking and more granular, directive communication. Once we had our Series A funding and scaled up our leadership team, our realm of the possible expanded. In a push for accountability, we set one big dedicated goal for each leader. We created company OKRs for people instead of matching people to our OKRs—we had it backward.

Every decision we make needs to square with our vision. When we face a trade-off between our customers and a business goal, we align with the customer. When an objective seems out of line with our mantra, it gets extra scrutiny. Before moving forward, we make sure it lines up with our North Star. That’s what keeps us walking the walk and connected with the people we serve. That’s what makes us who we are.

OKRs are open and visible to all parts of an organization, to each level of every department. As a result, companies that stick with them become more coherent.

Intuit’s story demonstrates the benefits of an OKR pilot project before (or even without) a full-company rollout. A few hundred users may suffice for an OKR laboratory, to iron out any kinks before deployment at scale. At Intuit, says CEO Brad Smith, who posts his own goals in his office for anyone to see, connected goal setting “is critical to enabling employees to do the best work of their lives.”

OKRs can be deployed to even greater effect in the cloud era. Horizontal alignment comes naturally. With open, public goal setting, the data and analytics team could see from the start what our financial systems team had in mind. It was immediately obvious that they should be working together, in parallel. The teams linked up their objectives in real time, rather than after the fact—a sea change from our historical way of doing things.

There’s an art to goal setting, and more than a few judgment calls. If you choose to temporarily elevate a key result, it helps to be candid about it. Leaders need to explain, “Yes, I want us to focus on that one right now as a top-level objective. When it no longer needs the extra attention, we’ll let it drift back down into a KR.” It’s a dynamic system. You’re always adjusting the altitude.