Measure What Matters

By John Doerr

Overall notes:

Planning stage matters, dramatically, if you’re truly using them to focus and say no to other things
They should enable you to say no, or at least to ask if this gets me closer or farther from my goal
Cadence matters, quarterly mostly, so you can more quickly pivot if the OKR isn’t the ideal or correct one
Andy Grove’s OKR hygiene
1. Ruthless intellectual honesty, disregard for self-interest, deep allegiance to the team
2. Less is more: a few extremely well-chosen objectives, what to say yes to and no to
3. Set goals from the bottom up: teams and individuals should be encouraged to create roughly half of their own OKRs, in collaboration with managers
4. No dictating: OKRs are a cooperative social contract to establish priorities and define how progress will be measured
5. Stay flexible: key results (and objectives) can be modified or discarded mid-cycle
6. Dare to fail
7. A tool, not a weapon: built to pace a person, not to measure their performance
8. Be patient, be resolute: expect trial and error

Raw Notes, by chapter:

Intro
1. OKRs
  1. Objectives
  2. Key results
  3. “a collaborative goalsetting protocol for companies, teams, and individuals.
2. Objective
  1. What is to be achieved
  2. Significant
  3. concrete
  4. action oriented
  5. (ideally) inspirational
3. Key results
  1. Benchmark how we get to the objective
  2. Effective KRs are
    1. specific
    2. time bound
    3. aggressive yet realistic
    4. Measurable and verifiable
    5. Binary, you either meet it or you don’t
  3. At the end of the time period
4. Value prop: “OKRs surface your primary goals, channel efforts and coordination, link diverse operations, lending purpose and unity to the entire org”
  1. “Systematic innovator of scale. Innovator means new stuff. Scale means big, systematic ways of looking at things done in a way that’s reproducible.”
  2. At Google each quarter starts with a leadership debate on their quarterly objectives
  3. At Google Larry would sit down and scrutinize the employee level OKRs to confirm they cohere across the board
  4. “In November and December, each team and product area will develop its own plans for the coming year and distill them into OKRs”
  5. Grade OKRs from the prior year and dissect failures
  6. OKRs aggregate in a central place so teams can browse and see the objectives of every team in the company
5. Four OKR Superpowers: focus, align, track, and stretch
  1. Focus and commit to priorities
    1. work on what does matter and not what doesn’t
    2. OKRs force hard choices about priorities
  2. Align and connect for teamwork
    1. OKR transparency
    2. Link individual objectives to company game plan
    3. Identify cross-dependencies
  3. Track for accountability
    1. data driven
    2. periodic check ins
    3. continuous reassessment
  4. Stretch for amazing
Andy Grove and Intel
1. Gordon, wise; Noyce, invented semiconductors, public facing; Grove, all things operations
2. At Fairchild “expertise was very much valued, that is why people got hired. That’s why they got promoted. Their effectiveness in translating knowledge into results was kind of shrugged off.”
3. At Intel, “It almost doesn’t matter what you know. It’s what you can do with whatever you know or can acquire and actually accomplish that tends be valued here.” Intel delivers.
4. Grove: “Now, the two key phrases are objectives and 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.”
5. Andy Grove borrowed it from Peter Drucker’s earlier Management by Outcomes
6. How do you distinguish between activity and output?
  1. How can we define and measure output by knowledge workers?
  2. And what can be done to increase it?
7. Aggressive introverts:
  1. Solve problems quickly, objectively, systematically and permanently without attacking the person.
  2. Set politics aside to make faster, sounder, more collective decisions.
8. Andy’s OKRs
  1. What and how
  2. Quarterly or monthly
  3. Public and transparent
  4. Bottom-up or Sideways (50/50)
  5. Mostly divorced from compensation
  6. Aggressive and Aspirational
9. OKRs enable to you to say no
Intel project crush
1. Objectives as measured by these key results
Superpower 1: Focus and Commit to Priorities
1. What is most important for the next 3, 6, or 12 months
2. Force a decision to be made (can learn from bad decisions, can’t learn from no decisions)
3. Values cannot be transmitted via memo
4. Structured goal setting can’t take root via fiat
5. Say this is what we’re doing but then also model it
6. Key points:
  1. Communicate with clarity
  2. Key results need care and feeding
    1. the levers you pull to hit a goal
  3. What, how, and when
    1. Quarterly, maybe monthly
    2. DS is using a three week review window
  4. Pairing key results – measure both the effect and the counter-effect
    1. If one focuses on output, another should focus on quality
    2. Quantity, and quality – make sure the haste towards quantity isn’t propelled by lowering quality
  5. The perfect vs. the good
    1. OKRs can be modified, so go for good and don’t anguish over perfect
    2. Completing all KRs must by definition fulfill the goal
  6. Less is more
Example of focus
Example of commit
Superpower #2: Align and Connect for Teamwork
1. Public goals more likely to succeed than private
2. Once objectives are set, day-to-day activities are tied to the vision
3. Vertical alignment
4. Preventing cascading of goals:
  1. Don’t aim to cascade all objectives
  2. Becomes “color by numbers” exercise
    1. loss of agility
    2. lack of flexibility
    3. marginalized contributions
    4. one-dimensional linkages
5. OKRs must be bottom up and top down
  1. Some goals bubble up from the bottom
  2. Some goals come down from on high
  3. 20% time a potential example
  4. Avoid micromanagement and managerial meddling
6. Cross-functional coordination
  1. Must have transparent OKRs across org
  2. People can become aware how they can help out other LOBs, teams, projects
  3. Awareness between teams within a level in the business
  4. Quickly see what teams are succeeding or failing to devote resources properly
Align example
Connect example
Superpower #3: Track for Accountability
1. Track and then revise or adapt
2. Use software to manage the process — not excel
  1. Everyone’s goals more visibile
  2. They drive engagement
  3. They promote internal networking
  4. They save time, money, and frustration
3. Must be adopted universally, no exceptions
4. Four zones for assessing OKRs:
  1. Continue — don’t change it
  2. Update — what can be done differently, new timeline, back-burner?
  3. Start — launch a new OKR mid-cycle, if it is needed
  4. Stop — drop a goal wit no progress if dropping it is the right thing to do
5. Scoring
  1. 0.7-1.0 = we delivered
  2. 0.4 to 0.6 = we made progress
  3. 0.0 to 0.3 = we failed to make real progress
6. Reflections
  1. Did I accomplish all of my objectives?
  2. If not, why not?
  3. If I were to rewrite the goal, what would I change?
  4. What have I learned that might alter my approach?
Track example
Superpower #4: Stretch for Amazing
1. Set aspirational goals
2. Can be extraordinary in themselves
3. Can be ordinary things done extraordinarily well
4. Can you 10x the goal
5. OKRs aim for 70% success
Stretch example
Stretch example
Continuous performance management
1. CFR
  1. Conversations
  2. Feedback
  3. Recognition
2. “Give OKRs their human voice”
3. Annual vs Continuous
  1. annual / continuous
  2. tied to compensation / decoupled from compensation
  3. directing / coaching
  4. outcome / process
  5. weakness / strength
  6. prone to bias / fact driven
4. Conversations
  1. Goal setting and reflection
  2. Ongoing progress updates
  3. two way coaching
  4. career growth
  5. lightweight performance reviews
5. Feedback
  1. Positive
  2. Negative
  3. Keep it specific
6. Recognition
  1. Institute peer-to-peer recognition
  2. Establish clear criteria
  3. Share recognition stories
  4. Make recognition frequent and attainable
  5. Tie recognition to company goals and strategies
Performance review example
Performance review example
Culture
1. Intel example:
  1. People oriented
  2. Openness
  3. Issue resolution
  4. Results
  5. Discipline
  6. Risk taking
  7. Trust and integrity
2. Google example:
  1. Structure and clarity
    1. are goals, roles, and execution plans on our team clear?
  2. Psychological safety
    1. Can we take risks on this team without feeling insecure or embarassed
  3. Meaning of work
    1. Are we working on something that is personally important for each of us
  4. Dependability
    1. Can we count on each other to do high quality work on time
  5. Impact of work
    1. Do we fundamentally believe the work we are doing matters?
Culture example
Culture example
Goals of the futur