OKR is short for objectives and key results. Objectives are high level goals. Key results are measurable way points to achieving objectives. I’ve encountered OKRs in my professional life and in the conversation around software and business development. John Doerr’s Measure What Matters makes the case that OKRs drive business success, align individuals and teams, and are a continuous improvement driver. Moreover, OKRs open the door to new organizational and management structures suited to modern business.
Background
Measure What Matters is born from John Doerr’s time at Intel with Andy Grove. Andy Grove is a famous executive known for leading Intel and pioneering management techniques. OKRs are one such technique. If you’re unfamiliar with the history behind OKRs, then it’s important to understand the author is not the inventor. The OKR origin story is credited to Andy Grove and Operation Crush. Operation Crush was Intel’s plan to absolutely crush their competitor Motorola and achieve market dominance. It worked, and here we are today.
John Doerr expands on Andy Grove’s legacy with the case for OKRs as told by himself and others. Measure What Matters is divided into two parts. Part one covers OKR history, fundamentals, relation to business success, and organization structure. Part two introduces a new management model based on CFRs (Conversations, Feedback, Recognition), OKRs, and continuous improvement.
The book feels like a labor of love and somewhat of an offering to Andy Grove. Andy Grove mentored John Doerr during his early career. Doerr deeply respects Grove. His zealousness and infinity comes out in the text. Measure What Matters is Doerr’s attempt to spread Grove’s message of defined, transparent goals, accountability, and continuous improvement with a wider audience.
Thoughts
People are more likely to achieve their goals when they write them down. If you agree, then Measure What Matters will not surprise you. The book will strengthen that position and provided a framework for achieving larger goals and growing businesses.
If you’re unfamiliar with goal setting, then Measure What Matters offers a zero-to-one understanding on the importance of goal setting, its relationship to organization structure, and how to build business. OKRs have the super powers to focus, align, track and stretch.
Here’s Doerr on each super power:
Superpower #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 us the focus needed to win.
Superpower #2 — Align and Connect for Teamwork: 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.
Superpower #3 — Track for Accountability: 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.
Superpower #4 — Stretch for Amazing: 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.
Each chapter in part one focuses on one of the superpowers. My favorite chapters were on stretch goals — I especially like the chapter on YouTube’s 1 billion watch hours. It’s a testament to the OKRs aligning a team and pushing them to achieve more than they thought possible.
Measure What Matters made me question my experience at my previous company. The company had a process to document and assess goals. Employees would suggest goals oriented with improving their team KPIs (Key Performance Indicator). I lead the SRE team. Infrastructure operating cost was one of our KPIs. I’d set goals to drop this KPI by a certain percentage. Then my reports would set goals according to mine in a top-down fashion. The approach failed because decisions did not revolve around the goals. The goals were formalized, rarely accomplished, and works towards them conceded to other organizational forces. This reads like a few stories in part one. There are plenty of stories of organizations struggling to adopt OKRs and how they eventually succeeded. My lesson here is that organizations must go full-throttle on adopting OKRs to reap the full benefits — and that must start with the highest levels of management.
This train of thought connected the relationship between KPIs and OKRS. My gut reaction to “KPIs” is negative because my previous company called their goal setting process “KPIs”. KPIs are not discussed in the book, but they are discussed in many other management books. KPIs are just numbers, but they’re related to OKRs. In fact, the names are self-evident: Key Results and Key Performance Indicator. Thus, KPIS determine key results, or as Measure What Matters puts it “as measured by”. Here’s an example.
- Objective: Extend runway by one year
- Key Result: Lower staffing costs by 50,000 by Q2
- Key Result: Reduce monthly operating cost by 10% by Q2
- Key Result: Renegotiate lower deals with three vendors by Q2
This example extends runway by lowering operating costs. The objective drives the key results as measured by cost KPIs. My previous company’s approach was the other way around. Objectives were set to move KPIs but were not really connected with larger objectives. In a nutshell, KPIs quantify key results, but are not objectives. Don’t mistake them for that.
Part 2 advocates for changing organizational structure and HR based on continuous improvement through CFRs and OKRs. The new structure uses fast feedback cycles between a manager and a report based on OKRs. That should empower individuals to hit their key results and achieve their objectives. Processes like annual performance reviews become outdated.
This approach effectively applies the three DevOps principles to people management. That also kicked off an internal discussion of where else the principles of flow, feedback, and improvement may be applied. I wrote John Doerr an email about this. Also, thanks to John Doerr for putting his email directly in the text and soliciting feedback. Here’s the relevant text from that email:
Roughly speaking, DevOps frames successful IT with three ways: The Principle of Flow — fast flow from development to production; The Principle of Feedback — fast flow from production to development, so information from production can be integrated as quickly as possible; The Principle of Continuous Improvement — focused improvement through data and experimentation across all processes. The principle of continuous improvement is analogous to the Toyota Way which you may be familiar with.Your call for a new approach for modern work is analogous to the DevOps transformation across the IT industry. The industry doesn’t do waterfall anymore. We release frequently and in small batches. The same thing is happening to HR. The move from annual review to quarterly or faster is analogous to the first way. The OKR’s and CFRs is the data required to course correct, or the second way. Applying OKR’s and CFR’s to the goal alignment process is continuous improvement. I agree with your position as well. It’s no surprise that organizations are changing their processes.
I didn’t expect to make a connection between DevOps, nor did I read the book for DevOps things. However, I did spark a discussion on what OKRs teams should use to improve their IT performance.
Highlights and Notes
“OKRs make you focus on working on the business, instead of just working in the business.”
This is my favorite quote because it clarifies the real superpower. OKRs done right will advance the business. Other approaches may keep you treading water.
OKRs surface your primary goals. They channel efforts and coordination. They link diverse operations, lending purpose and unity to the entire organization.
Sometimes it’s difficult to distinguish the forest from the trees. We get bogged down in sub goals. Setting objectives and stretching to reach them reveal true intentions.
Recommendation
I recommend Measure What Matters to anyone in a leadership position — especially those in organizations struggling with goal setting. VPs and C level employees will do well to read this book. You don’t need to be in a large company to take something away from the book. The book begins with the story of applying OKRs in a small startup called Google. In fact, people in small organizations will find more value in this book because it provides a framework for building culture. Establishing culture is far easier to do earlier rather than later.
Measure What Matters is an easy read. I enjoyed learning the history behind some companies and tales from leaders on the inside as they strive to meet their goals. I think anyone in leadership could relate to the stories in the book. Beyond that, the appendix includes material for assessing and applying OKRs in your company.
Or, you can go straight to the TED talk.
I recommend you pass on the book if you’re already familiar with OKRs and Andy Grove’s management approach. The book may contain new anecdotes, but I doubt they’re fundamentally altering.