Review
Creating a good strategy is hard, executing on it is even harder. OKRs are a management methodology that helps a company focus effort on the same important issues throughout the organization. They are made up of Objectives (WHAT is to be achieved) and Key Results (HOW we’ll achieve the objective and monitor progress).
OKRs aren’t perfect, but they’re a safe way to bring a strategy to life in your company. I don’t know of anything better that’s been widely adopted.
This book does a great job of bringing OKRs to life through stories from iconic individuals and companies. OKRs are easy to explain but hard to do. It takes a few iterations for individuals and teams to get good at writing OKRs.
If you can’t get everyone in your company around a single table – you should read this book.
Key Takeaways
The 20% that gave me 80% of the value.
- Ideas are easy. Execution is everything.
- OKRs: a management methodology that helps ensure the company focuses efforts on the same important issues throughout the organization
- Objective: is simply WHAT is to be achieved, no more and no less.
- Should be: significant, concrete, action oriented, and inspirational
- Act as a vaccine against fuzzy thinking and execution.
- Key Results: benchmark and monitor HOW we get to the objective.
- Should be: Specific, time-bound, aggressive (yet realistic), measurable and verifiable.
- Marissa Mayer: “It’s not a key result unless it has a number”
- Assessment: at the end of the period mark key results as completed or not (there shouldn’t be ambiguity). If all are completed the objective is necessarily achieved. If not all are complete – if still important roll over and evolve to reflect current progress.
- OKR superpowers:
- Focus and commit to priorities
- Align and connect teamwork
- Track for accountability
- Stretch for amazing
- Edwin Locke theory:
- Hard goals drive performance more effectively than easy goals.
- Specific hard goals ‘produce a higher level of output’ than vaguely worded ones
- OKRs are simple – but demand rigor, commitment, clear thinking and intentional communication
- At Intel the focus wasn’t on what you knew, but your effectiveness in translating that knowledge into actual results. Accomplishment > Credentials.
- Output is the key to productivity. Not activity (that’s the activity trap)
- Note to self: Decrease activity and increase output.
- OKR Hygiene tips:
- Less is more
- Set goals from the bottom up
- Stay flexible
- Fare to fail
- No dictating (negotiate – they’re a social contract)
- A tool not a weapon
- Be patient, be resolute (it’ll take time to implement them well)
- Measuring what matters begins with a simple question:
- What is the most important for the next 3, 6 or 12 months?
- Where should people concentrate their efforts?
- Successful organizations focus on a handful of initiatives → and leaders commit to them
- YouTube wrote down a 6 month OKR to improve the login experience. Larry liked it and made it company wide but shortened the timeline to 3 months.
- A well framed objective usually needs just 3-5 key results to reach it
- Too many key results will dilute focus and obscure progress
- If you’re certain you’re going to nail an OKR – then you’re not trying hard enough
- A 3 month time horizon curbs procrastination → also makes feedback loops faster and more relevant.
- The best OKR cadence is the one that fits the context of your business
- A key risk of OKRs = Specific challenging goals will be met but at the expense of other important features that were not specified (safety, ethics, reputation).
- Pair key results with non-goals or quality goals to avoid gaming of the system
- Less is more
- Innovation means saying no to a thousand things (Steve Jobs)
- Ideal number of quarterly OKRs is between 3 and 5
- OKRs lock in commitment to high-impact goals – colleagues will then learn to commit to the process themselves.
- “At any given time, some significant % of people are working on the wrong things. The challenge is knowing which ones.” Aaron Levie.
- OKRs expose redundant efforts and save time and money
- Relying on top down cascading can:
- Reduce agility (everyone waits for them)
- Reduce flexibility (the effort to do them puts people off revising them mid-cycle)
- Marginalized contributors (shut out input from front line employees)
- One dimensional alignment (works for vertical, but what about horizontal)
- Healthy OKRs strike a balance between alignment and autonomy.
- Unacknowledged dependencies remain the number one cause of project slippage
- Transparency helps horizontal collaboration – the management tax is zero
- Be careful of teams (like engineering) getting caught between OKRs → you need to make dependencies explicit
- Focus and alignment go together
- Occasionally a key result is so good or important it should be elevated to an objective!
- OKRs should be living and breathing organisms. Your options at any point in the cycle:
- Continue – if in the green zone
- Update – if in the yellow zone, modify
- Start – launch something new
- Stop – when in the red zone, it’s not useful anymore
- If you change an OKR mid cycle – notify everyone
- Tell them what changed / what you learnt
- AND what you’ll do differently in future
- The simple act of writing down your goal – makes you more likely to achieve it. Odds get better if you track progress.
- Satisfaction = set aggressive goals → achieve most of them → reflect on the achievement
- Reflection questions:
- Did I accomplish all of the objectives? What contributed to success?
- If not, what obstacles did I encounter?
- If I were to rewrite a goal achieve in full, what would I change?
- What have I learned that might alter my approach to the next cycle?
- OKRs push us beyond our comfort zone
- Making OKRs aspirational forces all the other desirable traits: focus + commitment + alignment + tracking
- Google uses two OKR types: Committed (achieved every time in full) and Aspirational (40% complete)
- Continuous Performance Management – the contemporary alternative to annual reviews. Implemented with CFRs:
- Conversations: authentic, textured exchange to drive performance
- Feedback: networked among peers to evaluate progress and guide future improvement
- Recognition: expressions of appreciation to deserving individuals for contributions
- They champion accountability, transparency, empowerment and teamwork.
- Author sees them as complimentary to OKRs
- 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 goals?
- OKRs are less than 30% of performance ratings at Google
- Have regular 1-to-1s with your reports
- Goal setting and reflection
- Ongoing progress updates
- Two-way coaching
- Career growth
- Lightweight performance reviews
- Feedback needs to be specific to be constructive
- Recognition
- Have a mechanism for peer to peer recognition
- Establish a clear criteria
- Share recognition stories
- Make recognition frequent and attainable
- Tie recognition to company goals and strategies
- OKRs are a great training tool for executives and managers
- Clear space and shut out the noise when thinking about OKRs
- OKRs formalize reflection
- The most powerful cultural force: Active Transparency → opening up, sharing the truth, bringing others in, being vulnerable
- You may need to fix your culture before you implement OKRs
- You need to be ready for openness and accountability
- Jim Collins in Good to Great:
- Get the right people on the bus, get the wrong people off the bus, get the right people in the right seats
- Only then do you turn the wheel and step on the gas
