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

by John Doerr

For best results, OKRs are scrutinized several times per quarter by contributors and their managers. Progress is reported, obstacles identified, key results refined.

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.

Where OKR scores pinpoint what went right or wrong in the work, and how the team might improve, self-assessments drive a superior goal-setting process for the next quarter. There are no judgments, only learnings.

The philosopher and educator John Dewey went a step further: “We do not learn from experience . . . we learn from reflecting on experience.”

In philanthropy, I see people confusing objectives with missions all the time. A mission is directional. An objective has a set of concrete steps that you’re intentionally engaged in and actually trying to go for.

At private foundations, where you lack a market effect to gauge impact, you have to pay close attention to whether your data is getting you to the ultimate goal.

Google divides its OKRs into two categories, committed goals and aspirational (or “stretch”) goals. It’s a distinction with a real difference.

OKRs require organization. You need a leader to embrace the process and a lieutenant to ride herd over scoring and reviews.

The main flaw in Google Videos was a delay in our upload process. It broke a company rule for product development: Make it fast. User-uploaded videos weren’t immediately available to watch, whereas on YouTube they were—a big problem. By the time we fixed it, we’d lost significant market share. YouTube was out-streaming us three to one, but financially they were struggling. Swamped by demand, they urgently needed capital to build infrastructure. It was clear they would have to sell.

the Big Rocks Theory, which was popularized by Stephen Covey. Say you have some rocks, and a bunch of pebbles, and some sand, and your goal is to fit as much of everything as you can into a wide-mouth, one-gallon jar. If you start with the sand, and then the pebbles, the jar will run out of room for all the rocks. But when you start with the rocks, add the pebbles, and save the sand for last, the sand fills the spaces between the rocks—everything fits. In other words, the most important things need to get done first or they won’t get done at all.

Our true currency wasn’t views or clicks—it was watch time. The logic was undeniable. YouTube needed a new core metric.

Google aims for a grade of 0.7 (or 70 percent attainment) on stretch goals in aggregate,

Daily watch time is driven by two factors: the average number of daily active viewers (or DAVs) and the average amount of time those viewers spend watching.

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.”

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 companies transition to continuous performance management, OKRs and CFRs become mostly independent from compensation and formal evaluations.

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.

Replace “Employee of the Month” with “Achievement of the Month.”

clarity on company objectives and how they align with individual priorities—as set out in our “goals and expectations,” which equate to OKRs.

Early on in your career, when you’re an individual contributor, you’re graded on the volume and quality of your work. Then one day, all of a sudden, you’re a manager. Let’s assume you do well and move up to manage more and more people. Now you’re no longer paid for the amount of work you do; you’re paid for the quality of decisions you make.

Most start-ups aren’t too eager to plunge into structured goal setting: We don’t need that. We go super-fast. We just figure stuff out. And often they do figure it out. But I think they’re missing an opportunity to teach people how to be executives before the company scales. If those habits aren’t ingrained early on, one of two things happens: Unsuccessful companies scale beyond the leadership team’s capacity, and they die. Successful companies scale beyond the team’s abilities and the team gets replaced. Those are both sad outcomes. The better way is to train people to think like leaders from the start, when their departments have a staff of one.

I’d add that a really good company values different opinions. It mines for dissent, and it finds a way to bring it up to the surface and mine it out. That’s how we foster a meritocracy.

In another life, Mike might have called out the manufacturing lead: “What the hell, can you hurry up and get this done? I’ve been waiting forever!” When you say instead, “My KR is at risk,” it’s less charged and more constructive. Since our company has total alignment, the entire team has already agreed to the key result and the dependency it entails. There’s no judgment, just a problem to be solved. And guess what else happens? The two leads will advocate for each other to get more resources from Alex and me.

Culture, as the saying goes, eats strategy for breakfast.

An OKR culture is an accountable culture. You don’t push toward a goal just because the boss gave you an order. You do it because every OKR is transparently important to the company, and to the colleagues who count on you. Nobody wants to be seen as the one holding back the team. Everybody takes pride in moving progress forward. It’s a social contract, but a self-governed one.

High-motivation cultures, they concluded, rely on a mix of two elements. Catalysts, defined as “actions that support work,” sound much like OKRs: “They include setting clear goals, allowing autonomy, providing sufficient resources and time, helping with the work, openly learning from problems and successes, and allowing a free exchange of ideas.” Nourishers—“acts of interpersonal support”—bear a striking resemblance to CFRs: “respect and recognition, encouragement, emotional comfort, and opportunities for affiliation.”

“In the past,” Dov told me, “when employees just needed to do the next thing right—to follow orders to the letter—culture didn’t matter so much. But now we’re living in a world where we’re asking people to do the next right thing. A rulebook can tell me what I can or can’t do. I need culture to tell me what I should do.”

According to CEO Mike Long, the moonshot goal is to rationalize the nation’s health care supply chain: “In every other industry, success is based on transparent cost, quality, service, and the availability of choices. None of those principles work in health care, because the system is completely opaque. Doctors have difficulty knowing what services are requisitioned on your behalf, much less what they cost. So how then can you hold them accountable for financial outcomes?”

People watch what you do more than what you say. Lumeris had some senior leaders with an old-school, autocratic approach. They weren’t living our core values: ownership, accountability, passion for the job, loyalty to the team. Nothing else would matter until those leaders exited the organization. We made sure they left us with their dignity and respect intact, a telling moment in any transformation project.

We took less than eighteen months to replace 85 percent of our HR professionals. Once senior management and frontline employees were fully on board, we tackled the tougher nut: strengthening middle management. That’s typically a three-year process, from start to steady state. When it’s complete, your new culture is assured.

“OKRs make you focus on working on the business, instead of just working in the business,”

He did it in his characteristic style, one part Zen and one part Bud Light.

(A favorite piece of coaching, served with his typical dash of salt: “You’ve got to make the f—ing trains run on time.”)

If he saw someone treated unfairly, he’d pick up the phone and call the CEO and say, “This was a process error.” And he’d fix it.

OKRs are big, not incremental—we don’t expect to hit all of them. (If we do, we’re not setting them aggressively enough.) We grade them with a color scale to measure how well we did: 0.0–0.3 is red 0.4–0.6 is yellow 0.7–1.0 is green

must describe outcomes, not activities. If your KRs include words like “consult,” “help,” “analyze,” or “participate,” they describe activities. Instead, describe the end-user impact of these activities: “publish average and tail latency measurements from six Colossus cells by March 7,” rather than “assess Colossus latency”;

TRAP #1: Failing to differentiate between committed and aspirational OKRs. Marking a committed OKR as aspirational increases the chance of failure. Teams may not take it seriously and may not change their other priorities to focus on delivering the OKR.

The litmus test: If you ask your customers what they really want, does your aspirational objective meet or exceed their request?

A committed OKR that fails to achieve a 1.0 by its due date requires a postmortem. This is not intended to punish teams. It is intended to understand what occurred in the planning and/or execution of the OKR, so that teams may improve their ability to reliably hit 1.0 on committed OKRs.

Aspirational OKRs and their associated priorities should remain on a team’s OKR list until they are completed, carrying them forward from quarter to quarter as necessary. Dropping them from the OKR list because of lack of progress is a mistake, as it disguises persistent problems of prioritization, resource availability, or a lack of understanding of the problem/solution.

If your objective doesn’t fit on one line, it probably isn’t crisp enough.

Four Superpowers of OKRs Focus and Commit to Priorities Align and Connect for Teamwork Track for Accountability Stretch for Amazing Continuous Performance Management Importance of Culture

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.

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.