A brief synopsis of the book is reprinted below from Amazon.
“In the fall of 1999, John Doerr met with the founders of a start-up whom he’d just given $12.5 million, the biggest investment of his career. Larry Page and Sergey Brin had amazing technology, entrepreneurial energy, and sky-high ambitions, but no real business plan. For Google to change the world (or even to survive), Page and Brin had to learn how to make tough choices on priorities while keeping their team on track. They’d have to know when to pull the plug on losing propositions, to fail fast. And they needed timely, relevant data to track their progress—to measure what mattered.
Doerr taught them about a proven approach to operating excellence: Objectives and Key Results. He had first discovered OKRs in the 1970s as an engineer at Intel, where the legendary Andy Grove (“the greatest manager of his or any era”) drove the best-run company Doerr had ever seen. Later, as a venture capitalist, Doerr shared Grove’s brainchild with more than fifty companies. Wherever the process was faithfully practiced, it worked.
In this goal-setting system, objectives define what we seek to achieve; key results are how those top-priority goals will be attained with specific, measurable actions within a set time frame. Everyone’s goals, from entry level to CEO, are transparent to the entire organization.
The benefits are profound. OKRs surface an organization’s most important work. They focus effort and foster coordination. They keep employees on track. They link objectives across silos to unify and strengthen the entire company. Along the way, OKRs enhance workplace satisfaction and boost retention.”
Value of Goal Setting
According to Google’s Project Aristotle research, when employees find meaning in their work, they work more effectively. Ray Dalio, the founder of the hedge fund investment company Bridgewater, writes in his book Principles that meaningful work not only is a critical component to professional success but also personal happiness.
In Measure What Matters, Doerr describes how goals enable individual employees to feel more engaged with their work. Employees can derive more meaning from their work when they can clearly see how their tasks directly contribute to the company’s strategic goals. This requires the goals to be written down and shared freely. Goals create alignment, clarity, and job satisfaction which ultimately improves retention.
Another benefit of goal setting is to drive the performance of the team. Doerr cites UMD Professor Edwin Locke who observed that challenging goals drive performance more effectively than easy goals. Further, specific hard goals produce a higher level of output than vaguely worded goals.
What are OKRs?
OKRs are an acronym for Objectives and Key Results. OKRs define a collaborative goal-setting protocol that can be scaled from the company level, down to teams, and even individuals. This methodology helps ensure that the company is aligned on the same important issues throughout the organization so the limited resources are focused efficiently.
Here are the definitions for both components:
- Objective: what is to be achieved. Significant, concrete, action-oriented, and (ideally) inspirational. Where you want to go
- Key Results: benchmark and monitor how we get to the objective.
For maximum effectiveness, Key Results should be time-bound, aggressive yet realistic, measurable, and verifiable. There’s a balance between aggressive and realistic goals. At Google, one of the leading companies employing OKRs, they divide their OKRs into two categories.
- Commited objectives are tied to Google’s metrics: product releases, bookings, hiring, customers. The goals are to be achieved in full (100%) within a set time frame.
- Aspirational objectives reflect bigger-picture, higher-risk, more future-tilting ideas. Failures at an average rate of 40% are expected.
Goal Setting With a Team?
While goal setting is meant to drive alignment throughout the organization, it shouldn’t be a completely top-down approach. To keep everyone engaged in the process, a portion of the goals should be made at the team and individual level. When people help choose a course of action, they are more likely to accomplish it.
Doerr commented about working with Engineering teams to develop OKRs
“Engineers struggle with goal setting in two big ways. They hate crossing off anything they think is a good idea, and they habitually underestimate how long it takes to get things done.”
I’ve seen that challenge first hand and found that the best way to improve the goal-setting process is to constantly assess and reflect on the goals over time.
Accountability and Retros
The OKR methodology doesn’t expect for every goal to be met. In fact, in some cases, that would be considered a failure. If the goals are all consistently achieved, then the organization isn’t being pushed aggressively enough. While everyone wants the goals to be met, we can learn a lot about ourselves and our teams through failure. Regular review of goal status and retrospectives offer the opportunity to learn and adjust.
In the book, Doerr says,
“Peak performance is the product of collaboration and accountability”
Accountability is a critical component. It forces people to reflect on why goals aren’t being met. Regular status updates on progress towards the goals ensure that the goals stay top of mind and the plan stays realistic. It also keeps everyone engaged when they can easily see how their work is contributing to the company’s success.