MEASURE WHAT MATTERS – BOOK SUMMARY- OKRs

Individual Contributor Success / /

MEASURE WHAT MATTERS – BOOK SUMMARY- OKRs

Picture of Ruth Valverde A.

Ruth Valverde A.

ACHIEVE ANY GOAL BY USING OBJECTIVE KEY RESULTS (OKRS)

I have been consuming, reading, and listening to tons of information about Objective Key Results (OKRs). Frankly, I am pretty obsessed with this approach, and I am excited to start applying it.

OKRs enable you to have fantastic, bold goals with a clear focus on execution! You have a long-term vision with a clear road map to succeed.

I summarized the key lessons from the book: Measure what matters by John Doerr.

Enjoy the Kindle version:

Hardcover:

Audiobook:

John Doerr has a remarkable career. He is a self-made billionaire (12.7BN net worth) who started his journey at Intel, where he learned about OKRs from Andy Groove himself.

Then, he started working at Kleiner Perkins where he directed the distribution of venture capital funding some of the most successful technology companies globally, including Compaq, Netscape, Symantec, Amazon.com, Intuit, Macromedia, Slack and Google. 

Since their beginnings, the OKRs methodology has been applied to these big companies thanks to John Doerr’s teachings, allowing them to reach the mountain TOP through OKRS + outstanding leadership + fantastic culture.

Andy Grove, one of Intel’s cofounders and CEO from 1987 to 1998, was the creator of the OKRs methodology; Objectives and Key Results.


One revolutionary goal-setting approach that ensures you conquer your desired outcome.

If you apply the Objectives and keys results (OKRs) method, you will have the following advantages:

 

1. Exceptional focus at your company as everyone writes down what and how to get to their goal.

 

2. Thanks to the transparency of the approach, great alignment at every department and hierarchical level.

 

3. Enormous commitment. As you are publicly declaring your objectives, OKRs are social contracts.

Each employee must have their OKRs. Allowing individual contributors to find their correct answer is powerful and yields better results.

 

4. You can track the progress due to measurable key results.

 

5. Ambitious goals. You must have hard to meet objectives to incentive a risk-taking culture.

Do not tie OKRs to compensation so the company can be courageous and aim for the stars.

 

If OKRs are tight to compensation, teams would rather play safe.

 

You want to encourage people to be ambitious and aim higher.

 

You can have two different types of OKRs. 

 

One for aspirational goals and others for operational goals, which must be met 100% of the time.

 

Screen Shot 2022 01 30 at 6.39.48 PM MEASURE WHAT MATTERS - BOOK SUMMARY- OKRs
type of OKRs MEASURE WHAT MATTERS - BOOK SUMMARY- OKRs

OKRs origin

After getting hired at Intel, the author of the book, John Doerr, attended one of Grove’s seminars, where he explained that OKRs aren’t about what you know but what you do with what you know. 

Bottom line: OKRs were created because Andy Groove believed that execution is king. 

If you want things to get done, execution must trump knowledge.

For example, one of Intel’s objectives (Os) at the time was to be number one in the midrange computer component industry. By setting just a few such objectives, Grove explained, the company as a whole could genuinely focus on pursuing them.

But how would they know that they’d reached this objective? That’s where key results (KRs) come in. For example, one KR at the time was to “win” ten designs for the Intel 8085 microprocessor – every time, the microprocessor was used in products designed by other companies.

Such KRs must be measured with a clear yes or no. Every contributor would have to understand whether the KR had been met or not without argument.

By implementing this management system at Intel, Grove grew the company by 40 percent every year throughout his eleven-year tenure as CEO.

Seeing the impact of OKRs in action, the author began a lifetime of commitment to spreading this revolutionary management philosophy to other companies.

OKRs ENCOURAGE YOU TO FOCUS

Anyone who’s worked at a high-performance organization knows that to move ahead as a team, everyone needs to know which direction they’re headed in. But what’s equally important is knowing where one is not headed.

Three essential characteristics of OKRs: 

  1. There should only be a handful of organization-wide OKRs at any one time. That way, everyone from top management to lower-level employees can stay focused on achieving a limited number of important goals – together.

  2.  Once management has determined these top-level objectives, between three and five KRs are needed to help everyone at the company know when each goal has been reached. More than this, and focus will become diluted to the point where progress is hard to measure.

  3. You’ll need a clear time frame so that departments across the organization can stay focused on collectively meeting deadlines. The author recommends setting OKRs every quarter to keep up-to-date on today’s fast-paced market changes.

Every three months, then, your company should come together and see whether OKRs have been achieved, and whether or not you need to build upon existing progress – or set a new course.

 

 

OKR org gola MEASURE WHAT MATTERS - BOOK SUMMARY- OKRs

TRANSPARENT OKRs TO HAVE AN ALIGNED ORGANIZATION.

One crucial aspect of OKRs is that they must be transparent to everyone in your organization.


Research shows that being transparent with goals increases motivation.
Once top-level and individual OKRs become part of an organization’s public domain, they must be aligned to succeed truly. In other words,employees’ OKRs must align with the company’s vision, without stopping each individual to have their own creative and innovative goals.


However, this doesn’t mean that those at the top dictate employees’ day-to-day work. Such a top-down approach hinders autonomy in the workplace and decreases employee motivation. 

It’s best to instate a hybrid system that is both top-down and bottom-up; this will foster collaboration, transparency, and innovation.


At Google, engineers spend one day’s worth of time every week (20 percent of their workweek) on projects that they feel would contribute to Google’s overarching top-level OKRs.


A result of this philosophy? A young Google engineer spent 20 percent on a project called “Caribou” in 2001. Today, this project is known as Gmail, and it’s the most popular email client in the world.


TRACKING YOUR PROGRESS TO ENSURE YOU ARE HEADING TO THE RIGHT DIRECTION.


Writing down a goal raises the chances of reaching it, even more if those are published publicly -within the company- for everyone to see each other commitments.


A study showed that friends who both wrote down their goals; shared their progress with friends on a weekly basis were 43% more likely to achieve their objectives.
The same goes for organizational OKRs.


Google, for example, usually has monthly sit-downs where employees connect on how they are getting along with their quarterly OKRs. 

Not only is progress discussed; roadblocks are also pointed out, and key results updated accordingly.
During such meetings – or, indeed, at any time in the quarterly OKR life cycle – four options are available to OKR contributors:continue, update, strat, stop.


If an objective is on track, it makes sense to continue it. However, if external conditions have made key results unobtainable, then it’s best to update them to meet new realities.
It might even be necessary to start a new OKR in the middle of the quarter. 

And, sadly, unsuccessful OKRs sometimes need to be put to rest, which means stopping it mid-cycle.


How, though, can an OKR contributor best recognize how far along they’ve come in reaching their key results?

Google uses a 0-1.0 color-coded scale that enables OKR contributors to assess how successfully they’ve completed key results. 0.0 to 0.3 (red) means no progress has been made. 0.4 to 0.6 (yellow) means progress has been made, but critical results remain unmet. And finally, 0.7-1.0 (green) is a sign of the vital result having been successfully attained.


Intel used a similar scoring system. 

When the company wanted to demonstrate that its 8086 chipset had the best performance of any microprocessor in 1980, one of the key results was to send out 500 samples of its arithmetic coprocessor by the end of the quarter.

They managed to ship 470, which resulted in a KR score of 0.9. That’s pretty victorious! 

If you meet your objectives every quarter, it means your goals are not ambitious enough; you must stretch even higher. 

Set almost impossible targets. So you achieve exceptional results.

sels assesment okr MEASURE WHAT MATTERS - BOOK SUMMARY- OKRs

In 1969, humanity set foot on the moon for the first time. This was a previously unimaginable, daunting feat with a high risk of failure, and it stretched NASA to its limits.

But once an organization has the necessary focus, alignment, and tracking systems in place, such high-risk challenges can be undertaken. These challenges are called stretch goals.

Put simply, stretch goals are OKRs that are a daunting challenge to OKR contributors. Research backs up the effectiveness of stretch goals, with studies showing that ambitious employees exhibit higher motivation, productivity, and engagement levels.

But how does an organization know whether stretch goals are right for them?

Well, at Google, OKRs are separated into two distinct categories: stretch objectives and committed objectives.

Whereas committed objectives usually involve day-to-day metrics such as sales or hire, stretch goals are all about bigger-picture ideas. And while committed objectives are meant to be met with 100-percent success, stretch objectives at Google fail about 40 percent of the time.

Now, unlike Google, not all companies have a safety net of cash to fall back on if a high-risk stretch OKR fails. But with enough cash on hand, stretch goals have the chance of a big payoff.

Take Google’s web browser Chrome, for example. The initial 2008 OKR behind the development of the browser stated that the goal was to make browsing the web as quick and effortless as flipping through a magazine.

The Chrome team’s first stretch goal was overambitious: they wanted to get 20 million weekly users by the end of 2008. But the difficulty of achieving this goal inspired the team to keep upping their development game and focusing on the end goal, however unreachable it seemed.

The goal of twenty million weekly users was only reached in early 2009, but that didn’t deter the Chrome team from setting more stretch goals to keep up the challenge. For 2009, the stretch goal was set at 50 million, but they only reached 38. However, by 2010, they finally managed to meet their stretch goal of 111 million users.

In 2018, Chrome was used by over a billion people on mobile devices alone!

Screen Shot 2022 01 30 at 6.39.11 PM MEASURE WHAT MATTERS - BOOK SUMMARY- OKRs

COMBINE OKRS WITH POWERFUL ACTIONABLE MISSIONS STATEMENTS AND A STRONG CULTURE

OKRs do not substitute a good culture and management. But this approach can take excellent teams with outstanding leadership and culture to a mountain top. 

“Connect the whole world” – Facebook mission

“Organize all the world’s information and make it readable and available by anyone, anywhere, anytime.” – Google

When values statements express these mission statements, you connect the operational excellence with the company’s heart increasing your chances of success by influencing deeper.

Original value statements from Intel according to the book

  • Be aggressive introverts

  • Confront problems, not people.

  • Build system-oriented solutions.

  • Check our egos at the door when we get to meetings, so the best ideas win.

Value statements are essential, as culture dictates behavior.

Culture eats strategy for breakfast.

I hope you start implementing this approach too and see enormous progress!

I will keep you updated on the great things I expect to conquer though this method.

Author: Ruth Valverde A.

okr recommendation MEASURE WHAT MATTERS - BOOK SUMMARY- OKRs

OTHER ARTICLES YOU MAY ENJOY AND LEARN FROM:

Do you want to know what do you need to do to achieve your next goal as a corporate finance professional?

TAKE QUIZ
On Key

Related Posts

MEASURE WHAT MATTERS – BOOK SUMMARY- OKRs Read More »