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

by John Doerr

Bill was a fantastically warm human being who had the gift of almost always being right—especially about people. He was not afraid to tell anyone about how “full of shit” they were, and somehow they would still like him even after that. I miss Bill’s weekly haranguing very much.

There was no braggadocio to Larry, only calm, considered judgment.

Long before Gmail or Android or Chrome, Google brimmed with big ideas. The founders were quintessential visionaries, with extreme entrepreneurial energy. What they lacked was management experience.* For Google to have real impact, or even to reach liftoff, they would have to learn to make tough choices and keep their team on track. Given their healthy appetite for risk, they’d need to pull the plug on losers—to fail fast.*

I’m an inveterate techie who worships at the altar of innovation.

So I’d come to a philosophy, my mantra: Ideas are easy. Execution is everything.

The practice that molded me at Intel and saved me at Sun—that still inspires me today—is called OKRs. Short for Objectives and Key Results.

OKRs: “A management methodology that helps to ensure that the company focuses efforts on the same important issues throughout the organization.”

An OBJECTIVE, I explained, is simply WHAT is to be achieved, no more and no less. By definition, objectives are significant, concrete, action oriented, and (ideally) inspirational. When properly designed and deployed, they’re a vaccine against fuzzy thinking—and fuzzy execution.

KEY RESULTS benchmark and monitor HOW we get to the objective. Effective KRs are specific and time-bound, aggressive yet realistic. Most of a...

Where an objective can be long-lived, rolled over for a year or longer, key results evolve as the work progresses. Once they are all completed, the objective is necessarily achieved. (And if it isn’t, the OKR was poorly designed in the first place.)

Operation Crush, the campaign to restore Intel’s dominance in the microprocessor market. (We’ll delve into both in detail later on.)

OKRs surface your primary goals. They channel efforts and coordination. They link diverse operations, lending purpose and unity to the entire organization.

WARNING! Goals may cause systematic problems in organizations due to narrowed focus, unethical behavior, increased risk taking, decreased cooperation, and decreased motivation. Use care when applying goals in your organization.

“hard goals” drive performance more effectively than easy goals. Second, specific hard goals “produce a higher level of output” than vaguely worded ones.

In business, alienation isn’t an abstract, philosophical problem; it saps the bottom line.

But exactly how do you build engagement? A two-year Deloitte study found that no single factor has more impact than “clearly defined goals that are written down and shared freely. . . . Goals create alignment, clarity, and job satisfaction.”

As Eric told author Steven Levy, “Google’s objective is to be the systematic innovator of scale. Innovator means new stuff. And scale means big, systematic ways of looking at things done in a way that’s reproducible.”

Yet Google’s leaders have never faltered. Their hunger for learning and improving remains insatiable.

Larry’s analytical legerdemain—his preternatural ability to find coherence in so many moving parts—was unforgettable.)

Many companies have a “rule of seven,” limiting managers to a maximum of seven direct reports. In some cases, Google has flipped the rule to a minimum of seven. (When Jonathan Rosenberg headed Google’s product team, he had as many as twenty.) The higher the ratio of reports, the flatter the org chart—which means less top-down oversight, greater frontline autonomy, and more fertile soil for the next breakthrough. OKRs help make all of these good things possible.

Where OKRs take root, merit trumps seniority. Managers become coaches, mentors, and architects. Actions—and data—speak louder than words.

Then come the four OKR “superpowers”: focus, align, track, and stretch.

There are so many people working so hard and achieving so little. —Andy Grove

Intel was Grove’s laboratory for management innovation. He loved to teach, and the company reaped the benefits.*

It almost doesn’t matter what you know. . . . To claim that knowledge was secondary and execution all-important—well, I wouldn’t learn that at Harvard.

The objective is the direction: “We want to dominate the mid-range microcomputer component business.” That’s an objective. That’s where we’re going to go. Key results for this quarter: “Win ten new designs for the 8085” is one key result. It’s a milestone. The two are not the same. . . .

In 1954, in his landmark book The Practice of Management, Drucker codified this principle as “management by objectives and self-control.” It became Andy Grove’s foundation and the genesis of what we now call the OKR.

Grove wrestled with two riddles: How can we define and measure output by knowledge workers? And what can be done to increase it?

Grove was a scientific manager. He read everything in the budding fields of behavioral science and cognitive psychology.

Following his lead, they were skilled at confronting a problem without attacking the person. They set politics aside to make faster, sounder, more collective decisions.

As one Intel historian observed, he “seemed to know exactly what he wanted and how he was going to achieve it.”* He was sort of a walking OKR.

margin for error. Grove was hard on everybody, most of all himself. A proudly self-made man, he could be arrogant. He did not suffer fools, or meandering meetings, or ill-formed proposals.

As he once told The New York Times, Intel managers “leave our stripes outside when we go into a meeting.” Every big decision, he believed, should begin with a “free discussion stage . . . an inherently egalitarian process.” The way to get his respect was to disagree and stand your ground and, ideally, be shown to be right in the end.

When Grove died at seventy-nine after years of stoic suffering with Parkinson’s disease, The New York Times called him “one of the most acclaimed and influential personalities of the computer and Internet era.”

The essence of a healthy OKR culture—ruthless intellectual honesty, a disregard for self-interest, deep allegiance to the team—flowed from the fiber of Andy Grove’s being. But it was Grove’s nuts-and-bolts approach, his engineer’s mentality, that made the system work. OKRs are his legacy, his most valuable and lasting management practice. Here are some lessons I learned at Intel from the master and from Jim Lally, Andy’s OKR disciple and my mentor:

Less is more. “A few extremely well-chosen objectives,” Grove wrote, “impart a clear message about what we say ‘yes’ to and what we say ‘no’ to.” A limit of three to five OKRs per cycle leads companies, teams, and individuals to choose what matters most. In general, each objective should be tied to five or fewer key results. (See chapter 4, “Superpower #1: Focus and Commit to Priorities.”)

Set goals from the bottom up. To promote engagement, teams and individuals should be encouraged to create roughly half of their own OKRs, in consultation with managers. When all goals are set top-down, motivation is corroded. (Se...

No dictating. OKRs are a cooperative social contract to establish priorities and define how progress will be measured. Even after company objectives are closed to debate, their key results continue to be negotiated. Collective agreement is essential to maximum goal achiev...

Stay flexible. If the climate has changed and an objective no longer seems practical or relevant as written, key results can be modified or even discarded mid-cycle. (See chapte...

Dare to fail. “Output will tend to be greater,” Grove wrote, “when everybody strives for a level of achievement beyond [their] immediate grasp. . . . Such goal-setting is extremely important if what you want is peak performance from yourself and your subordinates.” While certain operational objectives must be met in full, aspirational OKRs should be uncomfortable and possibly unattainable. “Stretched goals,” as G...

A tool, not a weapon. The OKR system, Grove wrote, “is meant to pace a person—to put a stopwatch in his own hand so he can gauge his own performance. It is not a legal document upon which to base a performance review.” To encourage risk taking and prevent sandbagging, OKRs and bonuses are best kept ...

For example, “We will achieve a certain OBJECTIVE as measured by the following KEY RESULTS. . . .” Bill’s a.m.b made the implicit explicit to all.

As Bill Davidow recounts here, OKRs were Grove’s secret weapon in Operation Crush. They turbocharged a large and multifaceted organization, then propelled it with surprising agility. Up against a unified, goal-driven Intel, Motorola never stood a chance.

What made Intel different was that it was so apolitical. Managers sacrificed their little fiefdoms for the greater good.

was terribly important that Don Buckout and Casey Powell felt they could speak their minds without retribution. Without that, there’s no Operation Crush.

“Bad companies,” Andy wrote, “are destroyed by crisis. Good companies survive them. Great companies are improved by them.”

It is our choices . . . that show what we truly are, far more than our abilities. —J. K. Rowling

Organize the world’s information and make it universally accessible and useful.

Talking a good OKR game is not enough. To quote the late, great Bill Campbell, the Intuit CEO who later coached the Google executive team: “When you’re the CEO or the founder of a company . . . you’ve got to say ‘This is what we’re doing,’ and then you have to model it. Because if you don’t model it, no one’s going to do it.”

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.