Measure What Matters

by John Doerr

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.

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

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.

What is most important for the next three (or six, or twelve) months?

Successful organizations focus on the handful of initiatives that can make a real difference, deferring less urgent ones.

What are our main priorities for the coming period? Where should people concentrate their efforts?

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.”

With hindsight, I would have started with our leadership team of five. For structured goal setting to prosper, as our company learned the hard way, executives need to commit to the process.

People naturally look to their bosses in setting goals and following through. If the officers jump ship in the middle of a stormy voyage, you can’t expect the sailors to bring it into port.

As the leader, it was my job to keep after people. I would email our contributors to commit to creating individual OKRs. If they didn’t respond, I would reach out to them via Slack, the team messaging app. If they still didn’t hear me, I would text them. And if they still didn’t listen, I would grab them and say, “Please do your OKRs!”

“At any given time,” Aaron said, “some significant percentage of people are working on the wrong things. The challenge is knowing which ones.”

OKRs make objectives objective, in black and white.

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.

OKRs expose redundant efforts and save time and money.

According to the Harvard Business Review, companies with highly aligned employees are more than twice as likely to be top performers.

Unfortunately, alignment is rare. Studies suggest that only 7 percent of employees “fully understand their company’s business strategies and what’s expected of them in order to help achieve the common goals.” A lack of alignment, according to a poll of global CEOs, is the number-one obstacle between strategy and execution.

Micromanagement is mismanagement. A healthy OKR environment strikes a balance between alignment and autonomy, common purpose and creative latitude.

“[T]he subordinate will begin to take a much more restricted view of what is expected of him, showing less initiative in solving his own problems and referring them instead to his [or her] supervisor …. [T]he output of the organization will consequently be reduced ….”

In times of operational urgency, when simple doing takes precedence, organizations may choose to be more directive.

unacknowledged dependencies remain the number one cause of project slippage.

A transparent OKR system, as Laszlo Bock points out, promotes this sort of freewheeling collaboration: “People across the whole organization can see what’s going on. Suddenly you have people who are designing a handset reaching out to another team doing software, because they saw an interesting thing you could do with the user interface.” 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.

We publish our objectives on a wiki that anybody in the company can see. We discuss them at weekly all-hands meetings.

People can’t connect with what they cannot see; networks cannot blossom in silos. By definition, 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.