Measure What Matters

by John Doerr

Ideas are easy. Execution is everything.

Ideas are easy. Execution is everything.

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

My first PowerPoint slide defined 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.

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...

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.)

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.)

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

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

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

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

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.”

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.”

Goal setting isn’t bulletproof: “When people have conflicting priorities or unclear, meaningless, or arbitrarily shifting goals, they become frustrated, cynical, and demotivated.” An effective goal management system—an OKR system—links goals to a team’s broader mission. It respects targets and deadlines while adapting to circumstances. It promotes feedback and celebrates wins, large and small. Most important, it expands our limits. It moves us to strive for what might seem beyond our reach.

Goal setting isn’t bulletproof: “When people have conflicting priorities or unclear, meaningless, or arbitrarily shifting goals, they become frustrated, cynical, and demotivated.” An effective goal management system—an OKR system—links goals to a team’s broader mission. It respects targets and deadlines while adapting to circumstances. It promotes feedback and celebrates wins, large and small. Most important, it expands our limits. It moves us to strive for what might seem beyond our reach.

While Larry and Sergey had few preconceptions about running a business, they knew that writing goals down would make them real.fn5 They loved the notion of laying out what mattered most to them—on one or two succinct pages—and making it public to everyone at Google.

While Larry and Sergey had few preconceptions about running a business, they knew that writing goals down would make them real.fn5 They loved the notion of laying out what mattered most to them—on one or two succinct pages—and making it public to everyone at Google.

In larger enterprises, OKRs are neon-lit road signs. They demolish silos and cultivate connections among far-flung contributors. By enabling frontline autonomy, they give rise to fresh solutions. And they keep even the most successful organizations stretching for more.

In larger enterprises, OKRs are neon-lit road signs. They demolish silos and cultivate connections among far-flung contributors. By enabling frontline autonomy, they give rise to fresh solutions. And they keep even the most successful organizations stretching for more.

In Google’s early years, Larry Page set aside two days per quarter to personally scrutinize the OKRs for each and every software engineer. (I’d sit in on some of those reviews, and Larry’s analytical legerdemain—his preternatural ability to find coherence in so many moving parts—was unforgettable.) As the company expanded, Larry continued to kick off each quarter with a marathon debate on his leadership team’s objectives.

In Google’s early years, Larry Page set aside two days per quarter to personally scrutinize the OKRs for each and every software engineer. (I’d sit in on some of those reviews, and Larry’s analytical legerdemain—his preternatural ability to find coherence in so many moving parts—was unforgettable.) As the company expanded, Larry continued to kick off each quarter with a marathon debate on his leadership team’s objectives.

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.

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.

In October 2018, for the seventy-fifth consecutive quarter, Google’s CEO will lead the entire company to evaluate its progress against top-level objectives and key results. In November and December, each team and product area will develop its own plans for the coming year and distill them into OKRs. The following January, as CEO Sundar Pichai told me, “We’ll go back in front of the company and articulate, ‘This is our high-level strategy, and here are the OKRs we have written for the year.’ ”fn6 (In accordance with company tradition, the executive team will also grade Google’s OKRs from the prior year, with failures unblinkingly dissected.) Over the following weeks and months, thousands of Googlers will formulate, discuss, revise, and grade their team and individual OKRs. As always, they’ll have carte blanche to browse their intranet and see how other teams are measuring success. They’ll be able to trace how their work connects up, down, and sideways—how it fits into Google’s big picture.

In October 2018, for the seventy-fifth consecutive quarter, Google’s CEO will lead the entire company to evaluate its progress against top-level objectives and key results. In November and December, each team and product area will develop its own plans for the coming year and distill them into OKRs. The following January, as CEO Sundar Pichai told me, “We’ll go back in front of the company and articulate, ‘This is our high-level strategy, and here are the OKRs we have written for the year.’ ”fn6 (In accordance with company tradition, the executive team will also grade Google’s OKRs from the prior year, with failures unblinkingly dissected.) Over the following weeks and months, thousands of Googlers will formulate, discuss, revise, and grade their team and individual OKRs. As always, they’ll have carte blanche to browse their intranet and see how other teams are measuring success. They’ll be able to trace how their work connects up, down, and sideways—how it fits into Google’s big picture.

As you will see in the pages to come, objectives and key results drive clarity, accountability, and the uninhibited pursuit of greatness.

Grove was ahead of his time. Acute focus, open sharing, exacting measurement, a license to shoot for the moon—these are the hallmarks of modern goal science. Where OKRs take root, merit trumps seniority. Managers become coaches, mentors, and architects. Actions—and data—speak louder than words. In sum, objectives and key results are a potent, proven force for operating excellence—for Google, so why not for you?

Like OKRs themselves, this book comes in two complementary sections. Part One considers the system’s cardinal features and how it turns good ideas into superior execution and workplace satisfaction. We begin with OKRs’ origin story at Andy Grove’s Intel, where I became a zealous convert. Then come the four OKR “superpowers”: focus, align, track, and stretch. Superpower #1—Focus and Commit to Priorities (chapters 4, 5, and 6): High-performance organizations home in on work that’s important, and are equally clear on what doesn’t matter. OKRs impel leaders to make hard choices. They’re a precision communication tool for departments, teams, and individual contributors. By dispelling confusion, OKRs give us the focus needed to win. Superpower #2—Align and Connect for Teamwork (chapters 7, 8, and 9): With OKR transparency, everyone’s goals—from the CEO down—are openly shared. Individuals link their objectives to the company’s game plan, identify cross-dependencies, and coordinate with other teams. By connecting each contributor to the organization’s success, top-down alignment brings meaning to work. By deepening people’s sense of ownership, bottom-up OKRs foster engagement and innovation. Superpower #3—Track for Accountability (chapters 10 and 11): OKRs are driven by data. They are animated by periodic check-ins, objective grading, and continuous reassessment—all in a spirit of no-judgment accountability. An endangered key result triggers action to get it back on track, or to r...

Part Two covers OKRs’ applications and implications for the new world of work: CFRs (chapters 15 and 16): The failings of annual performance reviews have sparked a robust alternative—continuous performance management. I will introduce OKRs’ younger sibling, CFRs (Conversation, Feedback, Recognition), and show how OKRs and CFRs can team up to lift leaders, contributors, and organizations to a whole new level. Continuous Improvement (chapter 17): As a case study for structured goal setting and continuous performance management, we see a robotics-powered pizza company deploys OKRs in every aspect of its operations, from the kitchen to marketing and sales. The Importance of Culture (chapters 18, 19, and 20): Here we’ll explore the impact of OKRs on the workplace, and how they ease and expedite culture change.

Measuring what matters begins with the question: 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. Their leaders commit to those choices in word and deed. By standing firmly behind a few top-line OKRs, they give their teams a compass and a baseline for assessment. (Wrong decisions can be corrected once results begin to roll in. Nondecisions—or hastily abandoned ones—teach us nothing.)

While paring back a list of goals is invariably a challenge, it is well worth the effort. As any seasoned leader will tell you, no one individual—or company—can “do it all.” With a select set of OKRs, we can highlight a few things—the vital things—that must get done, as planned and on time.

As a YouTube product manager, Rick Klau was responsible for the site’s homepage, the third most visited in the world. The hitch: Only a small fraction of users logged in to the site. They were missing out on important features, from saving videos to channel subscriptions. Much of YouTube’s value was effectively hidden to hundreds of millions of people around the world. Meanwhile, the company was forfeiting priceless data. To solve the problem, Rick’s team devised a six-month OKR to improve the site’s login experience. They made their case to YouTube CEO Salar Kamangar, who consulted with Google CEO Larry Page. Larry opted to elevate the login objective to a Google company-wide OKR, but with a caveat: The deadline would be three months, not six. When an OKR rises to the top line, “all eyes in the company are on your team,” Rick says. “That’s a lot of eyes! We had no idea how we’d do it in three months, but we understood that owning a company-level OKR showed that our work took priority.” By adding so much emphasis to a product manager’s goal, Larry clarified things for other teams, too. As in Operation Crush, everyone rallied to help Rick’s group succeed. The YouTube cadre finished on time, though they shipped one week late.

Nuna’s Jini Kim discovered the hard way that OKRs require a public commitment by leadership, in word and deed. When I hear CEOs say “All my goals are team goals,” it’s a red flag. Talking a good OKR game is not enough.

For sound decision making, esprit de corps, and superior performance, top-line goals must be clearly understood throughout the organization. Yet by their own admission, two of three companies fail to communicate these goals consistently. In a survey of eleven thousand senior executives and managers, a majority couldn’t name their company’s top priorities. Only half could name even one.

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.”

Besides, 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.

The more ambitious the OKR, the greater the risk of overlooking a vital criterion. To safeguard quality while pushing for quantitative deliverables, one solution is to pair key results—to measure “both effect and counter-effect,” as Grove wrote in High Output Management. When key results focus on output, Grove noted: [T]heir paired counterparts should stress the quality of [the] work. Thus, in accounts payable, the number of vouchers processed should be paired with the number of errors found either by auditing or by our suppliers. For another example, the number of square feet cleaned by a custodial group should be paired with a … rating of the quality of work as assessed by a senior manager with an office in that building.

Don’t allow the perfect to be the enemy of the good.fn2 Remember that an OKR can be modified or even scrapped at any point in its cycle. Sometimes the “right” key results surface weeks or months after a goal is put into play. OKRs are inherently works in progress, not commandments chiseled in stone.

In a high-functioning OKR system, top-down mandates to “just do more” are obsolete. Orders give way to questions, and to one question in particular: What matters most?

top-line objectives must be significant. 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. They link to the larger purpose we’re expected to deliver around. “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.”

The system helped my personal focus, too. I tried to limit myself to three or four individual objectives, tops. I printed them out and kept them close on my notepad and next to my computer, everywhere I went. Each morning, I’d say to myself, “These are my three buckets, and what am I doing today to move the company forward?” That’s a great question for any leader, with or without a learning issue.

I was wide open about my progress or lack of it. I’d tell my people, “Here are the three things I’m working on, and I’m failing at this one miserably.” As companies scale, people need to see the CEO’s priorities and how they can align for maximum impact. And they need to see it’s okay to make a mistake, to correct it and move on. You can’t fear screwing up. That squelches innovation.

In 2015, we made an initial try to implement OKRs. As an ex-Googler, I was sold on the power of objectives and key results. But I underestimated what it took to introduce them, much less to execute them effectively. You need to build your goal muscle gradually, incrementally. As I know too well from my own private wellness OKR to run a marathon: Doing too much too soon will definitely end in pain. We created quarterly OKRs and annual OKRs, and rolled them out to everybody at Nuna from day one. We were tiny then, around twenty people—not such a big lift, you might think. But the process didn’t take. Some people never set their individual OKRs; others set them, but stuck them in a drawer. 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. It may take a quarter or two to overcome your managers’ resistance and get them acclimated to OKRs—to view them not as a necessary evil, or some perfunctory exercise, but as a practical tool to fulfill your organization’s top priorities.

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. Here’s one example, with my grades (on the Google scale of 0.0 to 1.0) in brackets. I can tell you that I received a lot of constructive input in formulating this deceptively simple and make-or-break hiring OKR: OBJECTIVE Continue to build a world-class team. KEY RESULTS 1. Recruit 10 engineers [0.8]. 2. Hire commercial sales leader [1.0]. 3. One hundred percent of candidates feel they had a well-organized, professional experience even if Nuna does not extend an offer [0.5].

What’s the moral of our OKR story? As David says, “You’re not going to get the system just right the first time around. It’s not going to be perfect the second or third time, either. But don’t get discouraged. Persevere. You need to adapt it and make it your own.” Commitment feeds on itself. Stay the course with OKRs, as I know firsthand, and you will reap amazing benefits.

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

In an OKR system, the most junior staff can look at everyone’s goals, on up to the CEO. Critiques and corrections are out in public view. Contributors have carte blanche to weigh in, even on flaws in the goal-setting process itself. Meritocracy flourishes in sunlight. When people write down “This is what I’m working on,” it’s easier to see where the best ideas are coming from.