Though I was tangentially aware of Objective and Key Results (OKRs), a book recommendation by Bill Gates in 2018 prompted me to delve further into this topic using this book. As always, my motivation of reading books in this genre is mostly to understand best practices that can be adapted and improved upon for the field of education. Inherently a very simple method, the book still does a good job of laying out the processes and the thinking behind it through examples of many startups and big companies.
Google, Meet OKRs
- Ideas are easy. Execution is everything.
- 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
- 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
The Father of OKRs
- When people help choose a course of action, they are more likely to see it through. In 1954, in his landmark book The Practice of Management , Drucker codified this principle as “management by objectives and self-control.”
- Superpower #1: Focus and Commit to Priorities
- 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.
Superpower #1: Focus and Commit to Priorities
Objectives are the stuff of inspiration and far horizons. Key results are more earthbound and metric-driven.
Superpower #1: Focus and Commit to Priorities
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
Superpower #2: Align and Connect for Teamwork
Transparency seeds collaboration
In moderation, cascading makes an operation more coherent. But when all objectives are cascaded, the process can degrade into a mechanical, color-by-numbers exercise
Micromanagement is mismanagement. A healthy OKR environment strikes a balance between alignment and autonomy, common purpose and creative latitude
OKRs are not islands. To the contrary, they create networks—vertical, horizontal, diagonal—to connect an organization’s most vital work. When employees align with a company’s top-line goals, their impact is amplified
Align: The MyFitnessPal Story
- We created company OKRs for people instead of matching people to our OKRs—we had it backward. Some objectives were too narrow, others too nebulous
Connect: The Intuit Story
- 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
- The simplest, cleanest way to score an objective is by averaging the percentage completion rates of its associated key results. Google uses a scale of 0 to 1.0: 0.7 to 1.0 = green. * (We delivered.) 0.4 to 0.6 = yellow. (We made progress, but fell short of completion.) 0.0 to 0.3 = red. (We failed to make real progress.)
Superpower #3: Track for Accountability
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 single greatest motivator is ‘making progress in one’s work.’ The days that people make progress are the days they feel most motivated and engaged.”
As we track and audit our OKRs, we have four options at any point in the cycle:
On state-of-the-art goal management platforms, OKR scores are system-generated; the numbers are objective, untouched by human hands.
In evaluating OKR performance, objective data is enhanced by the goal setter’s thoughtful, subjective judgment. For any given goal in a given quarter, there may be extenuating circumstances. A weak showing by the numbers might hide a strong effort; a strong one could be artificially inflated.
“ We do not learn from experience … we learn from reflecting on experience.”
Track: The Gates Foundation Story
- A mission is directional. An objective has a set of concrete steps that you’re intentionally engaged in and actually trying to go for
Superpower #4: Stretch for Amazing
Google divides its OKRs into two categories, committed goals and aspirational (or “stretch”) goals. It’s a distinction with a real difference
Committed objectives are tied to Google’s metrics: product releases, bookings, hiring, customers
Aspirational objectives reflect bigger-picture, higher-risk, more future-tilting ideas
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.”
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.
Stretch: The YouTube Story
- Then Salar Kamangar turned over day-to-day leadership for the tech side of YouTube to Shishir Mehrotra, and Shishir helped bring focus to the whole company. He used a metaphor called 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.
- But my point was that YouTube’s mission was fundamentally divergent. It’s fine for viewers to learn to tie bow ties, and if that’s all they want, they’ll choose the one-minute manual. But that’s not what YouTube was about, not really. Our job was to keep people engaged and hanging out with us. By definition, viewers are happier watching seven minutes of a ten-minute video (or even two minutes of a ten-minute video) than all of a one-minute video. And when they’re happier, we are, too.
- 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
Continuous Performance Management: OKRs and CFRs
It centers on five questions: What are you working on? How are you doing; how are your OKRs coming along? Is there anything impeding your work? What do you need from me to be (more) successful? How do you need to grow to achieve your career goals?
That transformational system, the contemporary alternative to annual reviews, is continuous performance management .
Andy Grove estimated that ninety minutes of a manager’s time “can enhance the quality of your subordinate’s work for two weeks.
Based on BetterWorks’ experience with hundreds of enterprises, five critical areas have emerged of conversation between manager and contributor:
Goal setting and reflection
Ongoing progress updates
Lightweight performance reviews
Continuous recognition is a powerful driver of engagement: “ As soft as it seems, saying ‘thank you’ is an extraordinary tool to building an engaged team… . ‘[H]igh-recognition’ companies have 31 percent lower voluntary turnover than companies with poor recognition cultures
Institute peer-to-peer recognition
Replace “Employee of the Month” with “Achievement of the Month.”
Share recognition stories
Make recognition frequent and attainable
Culture Change: The Lumeris Story
You need a culture that high-fives small and innovative ideas. —Jeff Bezos
As Jim Collins observes in Good to Great , first you need to get “the right people on the bus, the wrong people off the bus, and the right people in the right seats.” Only then do you turn the wheel and step on the gas.
The Goals to Come
We’re getting glimpses of that future through forward thinkers like Orly Friedman, who has introduced OKRs to every elementary schoolchild at the Khan Lab School in Mountain View, California
I’m convinced that if structured goal setting and continuous communication were to be widely deployed, with rigor and imagination, we could see exponentially greater productivity and innovation throughout society
How Google Works , by Eric Schmidt