1 Google, Meet OKRs

It is a collaborative goal-setting protocol for companies, teams, and individuals

Now, OKRs are not a silver bullet. They cannot substitute for sound judgment, strong leadership, or a creative workplace culture. But if those fundamentals are in place, OKRs can guide you to the mountaintop.

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 all, they are measurable and verifiable. ( As prize pupil Marissa Mayer would say, “It’s not a key result unless it has a number.”) You either meet a key result’s requirements or you don’t; there is no gray area, no room for doubt

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.

In business, alienation isn’t an abstract, philosophical problem; it saps the bottom line. More highly engaged work groups generate more profit and less attrition.

At smaller start-ups, where people absolutely need to be pulling in the same direction, OKRs are a survival tool. In the tech sector, in particular, young companies must grow quickly to get funding before their capital runs dry.

At medium-size, rapidly scaling organizations, OKRs are a shared language for execution. They clarify expectations

In larger enterprises, OKRs are neon-lit road signs. They demolish silos and cultivate connections among far-flung contributors.

Acute focus, open sharing, exacting measurement, a license to shoot for the moon—these are the hallmarks of modern goal science.

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 revise or replace it if warranted.

Superpower #4—Stretch for Amazing (chapters 12, 13, and 14):

OKRs motivate us to excel by doing more than we’d thought possible. By testing our limits and affording the freedom to fail, they release our most creative, ambitious selves.

2 The Father of OKRs

Now, the two key phrases . . . are objectives and the key result. And they match the two purposes. 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. . . .

The key result has to be measurable. But at the end you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it.

Now, did we dominate the mid-range microcomputer business? That’s for us to argue in the years to come, but over the next quarter we’ll know whether we’ve won ten new designs or not.

“activity trap”: “[S]tressing output is the key to increasing productivity, while looking to increase activity can result in just the opposite.”

How can we define and measure output by knowledge workers? And what can be done to increase it?

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. (See chapter 7, “Superpower #2: Align and Connect for Teamwork.”)

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 achievement. (See chapter 7, “Superpower #2: Align and Connect for Teamwork.”)

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 chapter 10, “Superpower #3: Track for Accountability.”)

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 Grove called them, push organizations to new heights. (See chapter 12, “Superpower #4: Stretch for Amazing.”)

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 separate. (See chapter 15, “Continuous Performance Management: OKRs and CFRs.”)

Be patient; be resolute. Every process requires trial and error. As Grove told his iOPEC students, Intel “stumbled a lot of times” after adopting OKRs: “We didn’t fully understand the principal purpose of it. And we are kind of doing better with it as time goes on.” An organization may need up to four or five quarterly cycles to fully embrace the system, and even more than that to build mature goal muscle.

3 Operation Crush: An Intel Story

"...If you tell everybody to go to the center of Europe, and some start marching off to France, and some to Germany, and some to Italy, that’s no good—not if you want them all going to Switzerland. If the vectors point in different directions, they add up to zero. But if you get everybody pointing in the same direction, you maximize the results. ..."

You can tell people to clean up a mess, but should you be telling them which broom to use?

A field engineer tells his general manager, “You turkeys don’t understand what’s happening in the market,” and within two weeks, the whole company is realigned, top to bottom. Everyone’s agreed: “The whistleblower is right. We’ve got to act differently.” It was terribly important that Don Buckout and Casey Powell felt they could speak their minds without retribution.

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

4 Superpower #1: Focus and Commit to Priorities

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

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.

OKRs require a public commitment by leadership, in word and deed

Their people need more than milestones for motivation. They are thirsting for meaning, to understand how their goals relate to the mission.

Objectives are the stuff of inspiration and far horizons. Key results are more earthbound and metric-driven

If an objective is well framed, three to five KRs will usually be adequate to reach it

each key result should be a challenge in its own right.

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

To safeguard quality while pushing for quantitative deliverables, one solution is to pair key results—to measure “both effect and counter-effect,”

Key results should be succinct, specific, and measurable. . A mix of outputs and inputs is helpful. Finally, completion of all key results must result in attainment of the objective. If not, it’s not an OKR.

We must realize—and act on the realization—that if we try to focus on everything, we focus on nothing.

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.

5 Focus: The Remind Story

We learned the three watchwords for entrepreneurs:

• Solve a problem
• Build a simple product
• Talk to your users

In my view, you can only do one big thing at a time really well, and so you better know what that one thing is.

Our objectives were clear and quantified, and we were teacher-obsessed from the start.

6 Commit: The Nuna Story

Alongside focus, commitment is a core element of our first superpower. In implementing OKRs, leaders must publicly commit to their objectives and stay steadfast.

Until your executives are fully on board, you can’t expect contributors to follow suit—especially when a company’s OKRs are aspirational. The more challenging an objective, the more tempting it may be to abandon it.

Our whole team needs sharper focus and clearer priorities, the prerequisites for deeper commitment. OKRs have forced a bunch of conversations in the company that otherwise would not have happened.

7 Superpower #2: Align and Connect for Teamwork

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.

Once top-line objectives are set, the real work begins. As they shift from planning to execution, managers and contributors alike tie their day-to-day activities to the organization’s vision. The term for this linkage is alignment, and its value cannot be overstated. According to the Harvard Business Review , companies with highly aligned employees are more than twice as likely to be top performers.

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, with four adverse effects:

• A loss of agility. Even medium-size companies can have six or seven reporting levels. As everyone waits for the waterfall to trickle down from above, and meetings and reviews sprout like weeds, each goal cycle can take weeks or even months to administer. Tightly cascading organizations tend to resist fast and frequent goal setting. Implementation is so cumbersome that quarterly OKRs may prove impractical.
• A lack of flexibility. Since it takes so much effort to formulate cascaded goals, people are reluctant to revise them mid-cycle. Even minor updates can burden those downstream, who are scrambling to keep their goals aligned. Over time, the system grows onerous to maintain.
• Marginalized contributors. Rigidly cascaded systems tend to shut out input from frontline employees. In a top-down ecosystem, contributors will hesitate to share goal-related concerns or promising ideas.
• One-dimensional linkages. While cascading locks in vertical alignment, it’s less effective in connecting peers horizontally, across departmental lines.

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

Precisely because OKRs are transparent, they can be shared without cascading them in lockstep

Rather than laddering down from the CEO to a VP to a director to a manager (and then to the manager’s reports), an objective might jump from the CEO straight to a manager, or from a director to an individual contributor. Or the company’s leadership might present its OKRs to everyone at once and trust people to say, “Okay, now I see where we’re going, and I’ll adapt my goals to that.”

An optimal OKR system frees contributors to set at least some of their own objectives and most or all of their key results.

In business, I have found, there is rarely a single right answer. By loosening the reins and backing people to find their right answers, we help everybody win.

When leaders are attuned to the fluctuating needs of both the business and their employees, the mix of top-down and bottom-up goals generally settles at around half-and-half. Which sounds about right to me.

When goals are public and visible to all, a “team of teams” can attack trouble spots wherever they surface.

8 Align: The MyFitnessPal Story

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.

It’s not easy to predict the market for the conceptually new; we’d wildly beat our metric or wildly miss. So we switched it up. We began pinning our key results to deadlines instead of revenue or projected users. (Example: “Launch MFP Premium by 5/1/15.”) After a feature launched and some real data came back, we’d be in a stronger position to assess its impact and potential. Then our next round of OKRs could be more realistically keyed (or stretched) to projected outputs.

“If we take this one off the road map this quarter, what happens? Would it really affect the user experience?” More often than not, the feature in question wouldn’t make a big difference. These calls are not subjective; we have metrics to measure impact. We’re making tougher, sharper choices about where to place our bets these days, and they all stem from the OKR process.

Beyond making objectives more consistent within a company, alignment contains a deeper meaning. It’s about keeping your goals true to your North Star values. Connected Fitness is deliberately aligned with Under Armour’s mission “to make all athletes better.” At the same time, we still live by the old MyFitnessPal mantra: When our customers succeed at reaching their health and fitness goals, we succeed as a company.

9 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.

In IT, we’re always juggling the needs of internal partners with the demands of our end users. We bridge technology and business outcomes. Maybe toughest of all, we must balance the task of making systems work perfectly today (as our people expect) with our mandate to invest in the future.

Now, with horizontally transparent OKRs, our engineers intentionally connect as they link to each other’s objectives. Quarter by quarter, they iterate against the department’s objectives while devising how best to coordinate with their peers.

10 Superpower #3: Track for Accountability