Introduction To Okrs
Introduction To Okrs
Introduction To Okrs
Christina Wodtke
Beijing
Tokyo
Introduction to OKRs
by Christina Wodtke
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Table of Contents
1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. An Extremely Short History of OKRs. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
What Are OKRs?
Why Use OKRs?
Living Your OKRs
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CHAPTER 1
Introduction
also short and clear enough that every employee can remember it
and make decisions by it.
A great goal is a powerful tool, but its not enough. A leader needs a
way to ensure that her organization lives that goal. The real power of
the OKR system is figuring out how to live that goal every day, as a
team. OKRs are best achieved if they are baked into the daily and
weekly cadence of a company, from planning meetings and status
emails.
Chapter 1: Introduction
CHAPTER 2
Objectives
Your Objective is a single sentence that is:
Qualitative and inspirational
The Objective is designed to get people jumping out of bed in
the morning with excitement. And while CEOs and VCs might
jump out of bed in the morning with joy over a three percent
gain in conversion, most mere mortals get excited by a sense of
meaning and progress. Use the language of your team. If they
want to use slang and say pwn it or kill it, use that wording.
Time-bound
For example, something that is achievable in a month or a quar
ter. You want it to be a clear sprint toward a goal. If it takes a
year, your Objective might be a strategy or maybe even a
mission.
Actionable by the team independently
This is less a problem for startups, but bigger companies often
struggle because of interdependence. Your Objective has to be
truly yours, and you cant have the excuse of Marketing didnt
market it.
Pusher, a startup using OKRs to accelerate its growth in the API as a
service business, writes about its first OKR retrospective (How We
Make OKRs Work):
We learned things like:
Dont create objectives that rely on the input of other teams
unless youve agreed with them that you share priorities.
Dont create objectives that will require people we havent
hired yet!
Be realistic about how much time you will have to achieve
your goals.
Key Results
Key Results take all that inspirational language and quantify it. You
create them by asking a couple of simple questions:
How would we know if we met our Objective? What numbers would
change?
This forces you to define what you mean by awesome, kill it, or
pwn. Does killing it mean visitor growth? Revenue? Satisfaction?
Or is it a combination of these things?
A company should have about three Key Results for an objective.
Key Results can be based on anything you can measure. Here are
some examples:
Growth
Engagement
Revenue
Performance
Quality
That last one can throw people. It seems hard to measure quality.
But with tools like Net Promoter Score (NPS), you can do it. NPS is
a number based on a customers willingness to recommend a given
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product to friends and family. (See The Only Number You Need to
Grow. Harvard Business Review, December 2003.)
If you select your KRs wisely, you can balance forces like growth and
performance, or revenue and quality, by making sure you have the
potentially opposing forces represented.
In Work Rules!, Laszlo Bock writes:
Its important to have both a quality and an efficiency measure,
because otherwise engineers could just solve for one at the expense
of the other. Its not enough to give you a perfect result if it takes
three minutes. We have to be both relevant and fast.
hard. If you look them and think, I can do that with some hard
work, they are too easy.
Your OKRs set the destination for the team so no one wastes their
time.
OKRs are adopted by companies for one of three key reasons:
Focus
What do we do and what do we not do as a company?
Alignment
How do we make sure the entire company focuses on what mat
ters most?
Acceleration
Is your team really reaching its potential?
Focus
At Duxter, a social network for gamers, the team adopted OKRs to
solve a classic startup problem: shiny object syndrome. CEO Adam
Lieb writes:
Like all startups we struggle with priorities. Possibly the most used/
overused saying at Duxter is bigger fish to fry. We had two big
fish problems. The first was having competing views of which fish
we should be frying. Often times, these drastically different views
caused conflict and inefficiency.
The second was that our biggest fish seemed to change on a weekly
or even daily basis. It became more and more difficult to keep
everyone in the company apprised of where their individual focus
should be.
Alignment
In an interview, Dick Costolo, former Googler and former CEO of
Twitter, was asked what he learned from Google that he applied to
Twitter. He shared the following:
The thing that I saw at Google that I definitely have applied at Twit
ter are OKRsObjectives and Key Results. Those are a great way to
help everyone in the company understand whats important and
how youre going to measure whats important. Its essentially a
great way to communicate strategy and how youre going to meas
ure strategy. And thats how we try to use them. As you grow a
company, the single hardest thing to scale is communication. Its
remarkably difficult. OKRs are a great way to make sure everyone
understands how youre going to measure success and strategy.
Acceleration
From Re:Work, Googles official guide to OKRs:
Google often sets goals that are just beyond the threshold of what
seems possible, sometimes referred to as stretch goals. Creating
unachievable goals is tricky as it could be seen as setting a team up
for failure. However, more often than not, such goals can tend to
attract the best people and create the most exciting work environ
ments. Moreover, when aiming high, even failed goals tend to result
in substantial advancements.
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Monday Commitments
Each Monday, the team should meet to check in on progress against
OKRs, and commit to the tasks that will help the company meet its
Objective. I recommend a format with four key quadrants (see
Figure 2-1):
Intention for the week
What are the three to four most important things you must get
done this week toward the Objective? Discuss whether these
priorities will get you closer to the OKRs.
Forecast for month
What should your team know is coming up that it can help with
or prepare for?
Status toward OKRs
If you set a confidence of 5 out of 10, has that moved up or
down? Have a discussion about why. Are there any blockers
endangering your OKRs?
Health metrics
Pick two things that you want to protect as you strive toward
greatness. What can you not afford to mess up? Key relation
ships with customers? Code stability? Team well-being? Now
mark when things start to go sideways and discuss it.
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This document is first and last a conversation tool. You want to talk
about issues like these:
Do the priorities lead to our hitting our OKRs?
Why is confidence dropping in our ability to make our OKRs?
Can anyone help?
Are we prepared for major new efforts? Does Marketing know
what Product is up to?
Are we burning out our people or letting hacks become part of
the code bases?
When you meet, you could discuss only the four-square
(Figure 2-1), or you can use it to provide a status overview and then
supplement with other detailed documents covering metrics, a pipe
line of projects, or related updates. Each company has a higher or
lower tolerance for status meetings.
Try to keep things as simple as possible. Too many status meetings
are about team members trying to justify their existence by listing
every little thing theyve done. Trust that your team makes good
choices in their everyday lives. Set the tone of the meeting to be
about team members helping each other to meet the shared goals to
which they all have committed.
Have fewer priorities and shorter updates.
Make time for the conversations. If only a quarter of the time allot
ted for the Monday meeting is presentations and the rest is discus
sing next steps, you are doing it right. If you end early, its a good
sign. Just because youve set aside an hour doesnt mean you have to
use it.
Jeff Weiner, CEO of LinkedIn, does things a little differently. He
opens his staff meeting with wins. Before delving into metrics or
the business at hand, he goes around the room and asks each of his
direct reports to share one personal victory and one professional
achievement from the previous week. This sets up a mood of success
and celebration before dicing into hard talks about why one key
result or another might be slipping.
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CHAPTER 3
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written out on Post-it notes, and have your executives add theirs. I
recommend having a variety of sizes available, and use the large
ones for the Objectives. Cramped writing is difficult to read.
Now, have the team place the Post-its up on the wall. Combine
duplicates, and look for patterns that suggest people are worried
about a particular goal. Combine similar Objectives. Stack rank
them. Finally, narrow them down to three.
Discuss. Debate. Fight. Stack. Rank. Pick.
Depending on the team you have, you have either hit the break or
you have another hour left.
Next, have all of the members of the executive team freelist as many
metrics as they can think of to measure the Objective. Freelisting is a
design-thinking technique. It means to simply write down as many
ideas on a topic as you can, one idea per Post-it. You put one idea on
each Post-it so that you can rearrange, discard, and otherwise
manipulate the data you have generated (see Figure 3-1).
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CHAPTER 4
I remember the first time I had to write a status email. I had just
been promoted to manager at Yahoo! back in 2000 and was running
a small team. I was told to write a status email covering what your
team has done that week, due Friday. Well, you can easily imagine
how I felt. I had to prove my team was getting things done! Not only
to justify our existence, but to prove we needed more people.
Because, you know, more people, amiright?
So I did what everyone does: I listed every single thing my reports
did, and made a truly unreadable report. Then, I began managing
managers, and had them send me the same, which I collated into an
even longer more horrible report. This I sent to my design manager,
Irene Au, and my general manager, Jeff Weiner (who sensibly
requested that I put a summary at the beginning).
And so it went, as I moved from job to job, writing long, tedious
reports that, at best, were skimmed. At one job, I stopped authoring
them. I had my managers send them to my project manager, who
collated them, and then sent it to me for review. After checking for
anything embarrassing, I forwarded it on to my boss. One week I
forgot to read it, and didnt hear anything about it. It was a waste of
everybodys time.
Then, in 2010, I got to Zynga. Now, say what you want about Zynga,
but it was really good at some critical things that make an organiza
tion run well. One was the status report. All reports were sent to the
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Then, the confidence rating will start to swing wildly up and down
as progress or setbacks show up. Eventually, around two months, the
confidence levels settle into the likely outcome. By two weeks from
the end of the quarter you can usually call the OKRs. If they were
truly tough goalsthe kind you only have a 50/50 chance of making
there is no miracle that can occur in the last two weeks to change
the results. The sooner you can call the results, the sooner you can
make plans for the next quarter and begin your next cycle.
The advantage of this approach is two-fold. First, the team doesnt
forget about OKRs because they need to constantly update the con
fidence level. Because the confidence level is a gut check, its quick
and painless, which is key for getting a young company in the habit
of tracking success. The second advantage is that this approach
prompts key conversations. If confidence drops, other leads can
question why it is happening and brainstorm ways to correct the
drop. OKRs are set and shared by the team; any team members
struggle is a danger to the entire company. A leader should feel com
fortable bringing a loss of confidence to the leadership team and
know that hell have help.
At two weeks before the end of the quarter you mark your confi
dence as 10 or 0. Success is making two of the three key results. This
style of grading leads to doubling down on the possible goals and
abandoning efforts on goals that are clearly out of range. The benefit
of this is to stop people spinning their wheels on the impossible and
focus on what can be done. However, the downside is some people
will sandbag by setting one impossible goal, one difficult goal, and
one easy goal. Its the job of the manager to keep an eye out for this.
The second approach to OKRs ratings is the grading approach. Goo
gle is the most famous for using the grading approach. At the end of
the quarter, the team and individual grade their results with data
collected. 0.0 means the result was a failure, and 1.0 means the result
was a complete success. Most results should land in the 0.6 to 0.7
range. From the Google official site on using OKRs, ReWork:
The sweet spot for OKRs is somewhere in the 6070 percent range.
Scoring lower may mean the organization is not achieving enough
of what it could be. Scoring higher may mean the aspirational goals
are not being set high enough. With Googles 0.01.0 scale, the
expectation is to get an average of 0.6 to 0.7 across all OKRs. For
organizations that are new to OKRs, this tolerance for failure to
hit the uncomfortable goals is itself uncomfortable.
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finalizing the Key Result ensures that everyones on the same page
from the start.
As well as precision, Google sets high value on transparency. All
OKRs, individual and team, are posted on the intranet, and team
progress is shared throughout. Again, from ReWork:
Publicly grade organizational OKRs. At Google, organizational
OKRs are typically shared and graded annually and quarterly. At
the start of the year, there is a company-wide meeting where the
grades for the prior OKRs are shared and the new OKRs are shared
both for the year and for the upcoming quarter. Then the company
meets quarterly to review grades and set new OKRs. At these com
pany meetings, the owner for each OKR (usually the leader from
the relevant team) explains the grade and any adjustments for the
upcoming quarter.
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The first quarter that you feel you have truly mastered OKRs, go
shopping.
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CHAPTER 5
Just like new technologies, methodologies can suffer from the hype
cycle. OKRs are no exception; Ive met a number of people deeply
disillusioned with OKRs and unwilling to give them a second
chance. But just like Lean or Agile, simply because a given company
implements the approach badly does not mean the approach has no
value.
When a company first hears about the Objective and Key Result
approach, they are excited.
Now I know what the secret of success is! and they rush to imple
ment it across the entire company. Often a manager thinks this is the
silver bullet shes been seeking. This feeling is well documented by
Gartnerits called a Hype Curve (see Figure 5-1).
But the first time you try OKRs, you are likely to fail. Although
OKRs are not complicated, they are difficult work and often require
cultural change. Failure can be a dangerous situation, as your team
can become disillusioned with the approach and be unwilling to try
them again. You dont want to lose a powerful tool just because it
takes a little time to master.
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