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

by John Doerr

Contributors are most engaged when they can actually see how their work contributes to the company’s success. Quarter to quarter, day to day, they look for tangible measures of their achievement. Extrinsic rewards—the year-end bonus check—merely validate what they already know. OKRs speak to something more powerful, the intrinsic value of the work itself.

The best-in-class platforms feature mobile apps, automatic updating, analytics reporting tools, real-time alerts, and integration with Salesforce, JIRA, and Zendesk. With three or four clicks, users can navigate a digital dashboard to create, track, edit, and score their OKRs. These platforms deliver transformative OKR values: They make everyone’s goals more visible. Users gain seamless access to OKRs for their boss, their direct reports, and the organization at large. They drive engagement. When you know you’re working on the right things, it’s easier to stay motivated. They promote internal networking. A transparent platform steers individuals to colleagues with shared professional interests. They save time, money, and frustration. In conventional goal setting, hours are wasted digging for documentation in meeting notes, emails, Word documents, and PowerPoint slides. With an OKR management platform, all relevant information is ready when you are.

For an OKR system to function effectively, the team deploying it—whether a group of top executives or an entire organization—must adopt it universally. No exceptions, no opt-outs. Yes, there will be late adopters, resisters, and garden-variety procrastinators. To prod them to join the flock, a best practice is to designate one or more OKR shepherds.

As Peter Drucker observed, “Without an action plan, the executive becomes a prisoner of events. And without check-ins to reexamine the plan as events unfold, the executive has no way of knowing which events really matter and which are only noise.”

OKRs are adaptable by nature. They’re meant to be guardrails, not chains or blinders. As we track and audit our OKRs, we have four options at any point in the cycle: Continue: If a green zone (“on track”) goal isn’t broken, don’t fix it. Update: Modify a yellow zone (“needs attention”) key result or objective to respond to changes in the workflow or external environment. What could be done differently to get the goal on track? Does it need a revised time line? Do we back-burner other initiatives to free up resources for this one? Start: Launch a new OKR mid-cycle, whenever the need arises. Stop: When a red zone (“at risk”) goal has outlived its usefulness, the best solution may be to drop it.*

Late-in-game surprises are less likely when you track your OKRs for continuous feedback. Good news or bad, reality intrudes. In the process, “people can learn from failure and move on, perhaps turning some aspect of the setback into the seedling of a new success.”

Whenever a key result or objective becomes obsolete or impractical, feel free to end it midstream. There’s no need to hold stubbornly to an outdated projection—strike it from your list and move on. Our goals are servants to our purpose, not the other way around.

OKRs do not expire with completion of the work. As in any data-driven system, tremendous value can be gained from post hoc evaluation and analysis. In both one-on-ones and team meetings, these wrap-ups consist of three parts: objective scoring, subjective self-assessment, and reflection.

The newborn institution had signed on for the most audacious mission imaginable: “Everyone deserves a healthy and productive life.” So its leaders enlisted scores of brilliant people who’d devoted their lives to global health and told them, “Quit thinking about incremental progress. What would you do if you had unlimited resources?”

Bill and Melinda wanted to know that a disciplined system was in place to direct our hard choices. We borrowed from Jim Collins: “What can you be the best at in the world?” Once we figured that out, we laid the OKR system on top of it. We believed that everyone should have a healthy and productive life, and Bill and Melinda were passionate about the role of technology in creating change. That was in our DNA.

Ambitious, directional goals were always super-important at Microsoft. It was natural, in a way, because from a very young age I thought software was magic. In those early days, the exponential increase in transistors actually mapped to the performance of the device. We understood what the chips people were going to give us and that there was no end in sight, and that the storage and communication people likewise were writing exponential code.

I’d watched Andy Grove manage people on subgoals [key results], and I watched the Japanese, and I learned how you deal with things when people fall short. I don’t think I invented anything there, but I did watch and learn.

Philanthropy is bringing in more people from high-performance business environments, and they’re tilting the culture. Having a good mission is not enough. You need a concrete objective, and you need to know how you’re going to get there.

OKRs allowed us to be ambitious and disciplined at the same time. When measurable key results revealed a lack of progress or showed that an objective was unachievable, we reallocated the capital.

OKRs push us far beyond our comfort zones. They lead us to achievements on the border between abilities and dreams.

When stretch goals are chosen wisely, the payoff merits the risk and then some. “Big Hairy Audacious Goals”—Jim Collins’s memorable phrase in Good to Great—spark leaps to new levels: A BHAG is a huge and daunting goal—like a big mountain to climb. It is clear, compelling, and people “get it” right away. A BHAG serves as a unifying focal point of effort, galvanizing people and creating team spirit as people strive toward a finish line. Like the 1960s NASA moon mission, a BHAG captures the imagination and grabs people in the gut.

Not all stretch goals are so rarefied. Sometimes they represent “ordinary” work at an extraordinary level. But regardless of scope or scale, they fit my favorite definition of entrepreneurs: Those who do more than anyone thinks possible . . . with less than anyone thinks possible.*

Aspirational goals draw on every OKR superpower. Focus and commitment are a must for targeting goals that make a real difference. Only a transparent, collaborative, aligned, and connected organization can achieve so far beyond the norm. And without quantifiable tracking, how can you know when you’ve reached that amazing stretch objective?

Andy Grove was a fan of Abraham Maslow, the mid-twentieth-century psychologist best known for his “hierarchy of needs.” According to Maslow, only after we satisfy more basic concerns—starting with food and shelter, then safety, then “love” and “belongingness”—can we move to higher-level motivations.

If Andy Grove is the patron saint of aspirational OKRs, Larry Page is their latter-day high priest. In technology, Google stands for boundless innovation and relentless growth. In the world of objectives and key results, the company is synonymous with exponentially aggressive goals, or what author Steven Levy calls “the gospel of 10x.”

Gmail didn’t merely improve on existing systems. It reinvented the category and forced competitors to raise their game by orders of magnitude. Such 10x thinking is rare in any sector, on any stage. Most people, Larry Page observes, “tend to assume that things are impossible, rather than starting from real-world physics and figuring out what’s actually possible.”

The way Page sees it, a ten percent improvement means that you’re doing the same thing as everybody else. You probably won’t fail spectacularly, but you are guaranteed not to succeed wildly. That’s why Page expects Googlers to create products and services that are ten times better than the competition. That means he isn’t satisfied with discovering a couple of hidden efficiencies or tweaking code to achieve modest gains. Thousand percent improvement requires rethinking problems, exploring what’s technically possible and having fun in the process.

Stretch your team too fast and too far, and it may snap. In pursuing high-effort, high-risk goals, employee commitment is essential. Leaders must convey two things: the importance of the outcome, and the belief that it’s attainable.

Organizations have a range of risk tolerance, which may change over time. The greater the margin for error, the more a company can extend itself.

For high achievers, anything shy of perfection can sap morale. At Risk Management Solutions in California, there are “more degrees than employees,” says Amelia Merrill, a former HR leader. “People here are used to getting A’s. They don’t get B’s. Not getting 100 percent—that’s just really hard, culturally, to make that transition.”

There is no one magic number for the “right” stretch. But consider this: How can your team create maximum value? What would amazing look like? If you seek to achieve greatness, stretching for amazing is a great place to start.

You know, in our business we have to set ourselves uncomfortably tough objectives, and then we have to meet them. And then after ten milliseconds of celebration we have to set ourselves another [set of] highly difficult-to-reach objectives and we have to meet them. And the reward of having met one of these challenging goals is that you get to play again.

Stretch goals were beautifully defined by the leader of the Google X team that developed Project Loon and self-driving cars. Says Astro Teller: “If you want your car to get fifty miles per gallon, fine. You can retool your car a little bit. But if I tell you it has to run on a gallon of gas for five hundred miles, you have to start over.”

“If you set a crazy, ambitious goal and miss it, you’ll still achieve something remarkable.” When you aim for the stars, you may come up short but still reach the moon.

We knew we needed a multiprocess architecture to make each tab its own process and protect a user’s Gmail if another application crashed. And we knew we had to get JavaScript working a lot faster. But we were up for the task of building the best browser possible. Eric Schmidt, our CEO, knew how hard it was to construct a browser from scratch: “If you’re doing it, you had better be serious about it.” If Chrome wasn’t going to be dramatically different and better and faster than the traditional browsers already on the market, there was no point in moving ahead.

As a leader, you must try to challenge the team without making them feel the goal is unachievable. I thought it unlikely we would reach our target in time. (Candidly, I thought there was no way we would get there.) But I also considered it important to keep pushing to the limit of our ability and beyond. By putting the 20 million out there, I knew good things would happen. Our stretch OKR gave the team direction and a barometer to measure our progress. It made complacency impossible. And it kept us all rethinking, every day, the framework for what we were doing. All of these things were more important than reaching a somewhat arbitrary target on a designated day.

Stretch OKRs are an intense exercise in problem solving. Having gone through the Toolbar journey, I had a good sense of how to work my way through the inevitable troughs. Sure, there were sleepless nights. But no matter how much stress I was feeling, I stayed cautiously optimistic with my team. If we were losing users, I would tell them, let’s do an experiment to understand why and fix it. If compatibility was an issue, I’d assign a group to focus on that. I tried to be thoughtful and systematic and not too emotional, and I think that helped.

Today, on mobile alone, there are more than a billion active users of Chrome. We couldn’t have gotten there without objectives and key results. OKRs are the way we think about everything at Google, the way we’ve always done it.

For all the complex things Google Search could do, the user experience was phenomenally uncomplicated. I wanted to emulate that quality in our browser—to the point where you could be a kid in India or a professor at Stanford, and it wouldn’t matter. If you had access to a computer and adequate connectivity, your experience with Chrome would be manifestly simple.*

Google is so teeming with stretch goals that it would feel incomplete to chronicle only one of them. And so here is a second, the story of YouTube and how it grew—exponentially—with the “stretch” OKR superpower.

I was there when John Doerr came to talk to us about OKRs in the fall of 1999. By then we’d outgrown my garage and moved to 2400 Bayshore in Mountain View, an old Sun Microsystems plant. The whole building might have been 42,000 square feet, and we operated in less than half of it. We had the OKR meeting in the other half, the part reserved for all-hands.

OKRs require organization. You need a leader to embrace the process and a lieutenant to ride herd over scoring and reviews. When I ran OKRs for Larry, I sat in on four-hour meetings with his leadership team, where he’d debate all the company objectives and people were expected to be able to defend them and make sure they were clear. The guidance for OKRs at Google was often top-down, but with lots of discussion with experts on the team and significant give-and-take on key results: This is the direction we want to go, now tell us how you’re going to get there. Those long meetings enabled Larry to emphasize things he cared about, and also to vent frustrations, especially around service on our product OKRs. He’d say, “Tell me your speed now.” And then: “Why can’t you cut that in half?”

Stretch goals can be crushing if people don’t believe they’re achievable. That’s where the art of framing comes in. Clever manager that he is, Shishir cut our BHAG down to size. While one billion daily hours sounded like an awful lot, it represented less than 20 percent of the world’s total television watch time. Introducing that context was helpful and clarifying, at least for me. We weren’t gunning to be arbitrarily big. Rather: There was another thing out there way bigger than us, and we were trying to scale up to it.

Aspirational goals can prompt a reset for the entire organization. In our case, it inspired infrastructure initiatives throughout YouTube. People started saying, “If we’re going to be that big, maybe we need to redesign our architecture. Maybe we need to redesign our storage.” It became a prod for the whole company to better prepare for the future. Everybody started thinking bigger.

Talking can transform minds, which can transform behaviors, which can transform institutions. —Sheryl Sandberg

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What business leaders have learned, very painfully, is that individuals cannot be reduced to numbers. Even Peter Drucker, the champion of well-measured goals, understood the limits of calibration. A manager’s “first role,” Drucker said, “is the personal one. It’s the relationship with people, the development of mutual confidence . . . the creation of a community.” Or as Albert Einstein observed, “Not everything that can be counted counts, and not everything that counts can be counted.”

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To reach goals almost beyond imagining, people must be managed at a higher level. Our systems for workplace communication cry out for an upgrade.

In short, we need a new HR model for the new world of work. That transformational system, the contemporary alternative to annual reviews, is continuous performance management. It is implemented with an instrument called CFRs, for: Conversations: an authentic, richly textured exchange between manager and contributor, aimed at driving performance Feedback: bidirectional or networked communication among peers to evaluate progress and guide future improvement Recognition: expressions of appreciation to deserving individuals for contributions of all sizes

As communication stimuli, CFRs ignite OKRs and then boost them into orbit; they’re a complete delivery system for measuring what matters. They capture the full richness and power of Andy Grove’s innovative method. They give OKRs their human voice.

“If a conversation is limited to whether you achieved the goal or not, you lose context. You need continuous performance management to surface the critical questions: Was the goal harder to achieve than you’d thought when you set it? Was it the right goal in the first place? Is it motivating? Should we double down on the two or three things that really worked for us last quarter, or is it time to consider a pivot? You need to elicit those insights from all over the organization.

To hazard another football analogy: Let’s say objectives are the goalposts, the targets you’re aiming for, and key results the incremental yard markers for getting there. To flourish as a group, players and coaches need something more, something vital to any collective endeavor.

When companies replace—or at least augment—the annual review with ongoing conversations and real-time feedback, they’re better able to make improvements throughout the year. Alignment and transparency become everyday imperatives. When employees are struggling, their managers don’t sit and wait for some scheduled day of reckoning. They jump into tough discussions like firefighters, without hesitation.

Peter Drucker was one of the first to stress the value of regular one-on-one meetings between managers and their direct reports. Andy Grove estimated that ninety minutes of a manager’s time “can enhance the quality of your subordinate’s work for two weeks.” Ahead of the curve, as usual, Andy made one-on-ones mandatory at Intel. The point of the meeting, he wrote, is mutual teaching and exchange of information. By talking about specific problems and situations, the supervisor teaches the subordinate his skills and know-how, and suggests ways to approach things. At the same time, the subordinate provides the supervisor with detailed information about what he is doing and what he is concerned about. . . . A key point about a one-on-one: It should be regarded as the subordinate’s meeting, with its agenda and tone set by him. . . . The supervisor is there to learn and coach.* The supervisor should also encourage the discussion of heart-to-heart issues during one-on-ones, because this is the perfect forum for getting at subtle and deep work-related problems affecting his subordinate. Is he satisfied with his own performance? Does some frustration or obstacle gnaw at him? Does he have doubts about where he is going?

Goal setting and reflection, where the employee’s OKR plan is set for the coming cycle. The discussion focuses on how best to align individual objectives and key results with organizational priorities. Ongoing progress updates, the brief and data-driven check-ins on the employee’s real-time progress, with problem solving as needed.* Two-way coaching, to help contributors reach their potential and managers do a better job. Career growth, to develop skills, identify growth opportunities, and expand employees’ vision of their future at the company. Lightweight performance reviews, a feedback mechanism to gather inputs and summarize what the employee has accomplished since the last meeting, in the context of the organization’s needs. (As noted earlier, this conversation is held apart from an employee’s annual compensation/bonus review.)

“Feedback is an opinion, grounded in observations and experiences, which allows us to know what impression we make on others.”