Measure What Matters Summary

The following summarizes Measure What Matters by John Doerr and Larry Page.

Ideas are easy. Execution is everything. Objectives and Key Results (OKRs), popularized by Intel, Google, Dropbox, LinkedIn, Slack, Spotify, and Twitter are a management methodology that helps to ensure companies focus efforts by surfacing primary goals, channeling efforts and coordination, linking diverse operations, and lending purpose and unity to the organization.

An objective is what is to be achieved. They are significant, concrete, action oriented, and ideally inspirational. When properly designed and deployed, they’re a vaccine against fuzzy thinking and execution. Key results benchmark and monitor how to get to the objective. Effective KRs are specific and time-bound, aggressive yet realistic. Most of all, they are measurable and verifiable.

Where an objective can be long-lived, rolled over for a year or longer, key results evolve as the work progresses. Once they all KRs are completed, the objective is necessarily achieved. And if it isn’t, the OKR was poorly designed in the first place.

At medium-size, rapidly scaling organizations, OKRs are a shared language for execution. They clarify expectations: What do we need to get done (and fast), and who’s working on it? They also keep employees aligned, vertically and horizontally.

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.

Research

Dr. Edwin Locke, the patriarch of structured goal setting, mined a dozen studies for a quantitative correlation between goal difficulty and achievement. The arenas ranged widely, but the results were "unequivocal," Locke wrote. "[T]he harder the goal the higher the level of performance…Although subjects with very hard goals reached their goals far less often than subjects with very easy goals, the former consistently performed at a higher level than the latter." The studies found that "stretched” workers were not only more productive, but more motivated and engaged: "Setting specific challenging goals is also a means of enhancing task interest and of helping people to discover the pleasurable aspects of an activity."

In the intervening half century, more than a thousand studies have confirmed Locke’s discovery as "one of the most tested, and proven, ideas in the whole of management theory." Among experiments in the field, 90 percent confirm that productivity is enhanced by well-defined, challenging goals.

A two-year Deloitte study found that no single factor has more impact on building engagement than "clearly defined goals that are written down and shared freely. Goals create alignment, clarity, and job satisfaction."

Research shows that public goals are more likely to be attained than goals held in private. Simply flipping the switch to "open” lifts achievement across the board. In a recent survey of one thousand working U.S. adults, 92 percent said they’d be more motivated to reach their goals if colleagues could see their progress.

While the simple act of writing down a goal increases your chances of reaching it, your odds are better still if you monitor progress while sharing the goal with colleagues—two integral OKR features. In one California study, people who recorded their goals and sent weekly progress reports to a friend attained 43 percent more of their objectives than those who merely thought about goals without sharing them.

Once top-line objectives are set managers and contributors alike tie their day-to-day activities to the organization’s vision. This creates 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. Unfortunately, alignment is rare. Studies suggest that only 7 percent of employees "fully understand their company’s business strategies and what’s expected of them in order to help achieve the common goals." A lack of alignment, according to a poll of global CEOs, is the number-one obstacle between strategy and execution.

Learning "from direct experience," a Harvard Business School study found, "can be more effective if coupled with reflection—that is, the intentional attempt to synthesize, abstract, and articulate the key lessons taught by experience."

Here are some reflections for closing out an OKR cycle:

• Did I accomplish all of my objectives? If so, what contributed to my success? If not, what obstacles did I encounter?
• If I were to rewrite a goal achieved in full, what would I change?
• What have I learned that might alter my approach to the next cycle’s OKRs?

Key tenets

1. Focus and commit to priorities

   1. 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 you the focus needed to win.
   2. 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.
   3. Leaders must get across the why as well as the what. Their people need more than milestones for motivation. They want meaning, to understand how their goals relate to the mission. And the process can’t stop with unveiling top-line OKRs at a quarterly all-hands meeting. As LinkedIn CEO Jeff Weiner likes to say, "When you are tired of saying it, people are starting to hear it."

2. Align and connect for teamwork

   1. 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.
   2. Transparency seeds collaboration and exposes redundant efforts to save time and money.
   3. As Andy Grove observed, "People in the trenches are usually in touch with impending changes early. Salespeople understand shifting customer demands before management does; financial analysts are the earliest to know when the fundamentals of a business change."
   4. To promote engagement, teams and individuals should be encouraged to create roughly half of their own OKRs, in consultation with managers. When people help choose a course of action, they are more likely to see it through.
   5. Micromanagement is mismanagement. A healthy OKR environment strikes a balance between alignment and autonomy, common purpose and creative latitude. The "professional employee," Peter Drucker wrote, "needs rigorous performance standards and high goals…But how he does his work should always be his responsibility and his decision."

3. Track for accountability

   1. 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.
   2. Sometimes the "right” key results surface weeks or months after a goal is put into play. OKRs are inherently works in progress, not commandments chiseled in stone.

4. Stretch for amazing

   1. 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. For generational companies, stretching to new heights is compulsory. As Bill Campbell liked to say: If companies "don’t continue to innovate, they’re going to die—and I didn’t say iterate, I said innovate." Conservative goal setting stymies innovation.

   3. Jim Collins coined Big Hairy Audacious Goals (BHAGs) in Good to Great:

      A BHAG is a huge and daunting goal—like a big mountain to climb. It is clear, compelling, and people "get it” right away. A BHAG serves as a unifying focal point of effort, galvanizing people and creating team spirit as people strive toward a finish line. Like the 1960s NASA moon mission, a BHAG captures the imagination and grabs people in the gut.

   4. The more ambitious the OKR, the greater the risk of overlooking a vital criterion. To safeguard quality while pushing for quantitative deliverables, one solution is to pair key results—to measure "both effect and counter-effect," as Andy Grove wrote in High Output Management. When key results focus on output, Grove noted: Their paired counterparts should stress the quality of the work. Thus, in accounts payable, the number of vouchers processed should be paired with the number of errors found either by auditing or by our suppliers.

Scoring

• 0.7 to 1.0 = green. (We delivered.)
• 0.4 to 0.6 = yellow. (We made progress, but fell short of completion.)
• 0.0 to 0.3 = red. (We failed to make real progress.)

Importantly, OKRs are a tool, not a weapon. They are meant to pace a person—to put a stopwatch in their hand so they can gauge their own performance. To encourage risk taking and prevent sandbagging, OKRs and bonuses are best kept separate.

Googlers are encouraged to use their OKRs in self-assessments—as guides, not as grades. As Shona Brown, former SVP of business operations, explained, "It wasn’t that they got a red or yellow or green, but here was a list of what they’d delivered on that was above business as usual and connected to the overall goals of the company." The point of objectives and key results, after all, is to get everyone working on the right things.