Everyone Should Have OKRs! Q&A with a Googler
Google introduced me to Niket Desai by fate. I googled the term “OKRs template” and Niket’s OKRs template popped up #1. I’m pleased to share this Q&A with Niket on his amazing journey with OKRs as a successful entrepreneur, Googler, and investor. Niket believes everyone should have some flavor of OKRs.
Note to busy readers: key points are in red!
Ben: How did you get introduced to OKRs?
Niket: After studying a variety of math and engineering at Berkeley, I joined a small start-up and then created Punch with a few friends which was acquired by Google. I didn’t formally study OKRs until I worked at Google, but I used an equivalent approach to defining goals quarterly and measuring progress even before joining Google.
Ben: How are you using OKRs now?
Niket: After joining Google, I wanted to learn about angel investing the only way I knew how: investing in companies. Young start-ups want to be innovative. They pride themselves on lack of process. But here’s the challenge: how do you know when something is not working and how do you know when to stop doing it? I’m finding it invaluable to use OKRs to communicate with start-ups so you have a framework for making choices around when to shift courses.
Ben: Do you have any favorite key results that you can share?
Niket: I use OKRs instead of resolutions. Resolutions like “I want to get fit” don’t make sense; they are not measurable. If you say, “I’m going to lose 60 pounds this year,” you can breakdown the goal to 5 pounds a month and start focusing on making progress. It’s measurable, it’s meaningful. I’ll share some key results from my New Year’s Resolution that I think are fun. Most of them tend to be quantitative so I know if I’m hitting the mark.
- Learn greetings & basic conversation in 15 languages.
- Take the stairs in all cases save where it’s unreasonable.
- Get 7 hours of sleep a night.
When it’s a serious business key result I think the best ones push the company forward in meaningful ways. To do that you need to truly understand what’s driving your business and generating revenue (or leading to accelerating growth). That way your key results will be moving the needle on a metric that has significant impact at the company level.
Ben: Do you find it easy to define and set measurable results?
Niket: Defining measurable results is easy if you understand what you should be measuring and matters for your business. I find that the quality of OKRs has a good correlation with a person’s understanding of their business.Blindly going for growth without understanding the key reasons behind specific metrics (revenue drivers, hypothesis testing, other stuff) can be misleading.
Ben: Can you share an example where taking time to define OKRs helped a worker understand their business?
Niket: This one company had a standard web-publishing model with 3 participants: the readers, the bloggers, and the advertisers. They found that every campaign led to more readers which would grow the audience which would cause the advertiser to spend more money, creating a cycle effect for rapid revenue growth. We learned that we needed more campaigns, but we also noticed most advertisers only ran one campaign. So our growth objective included two key results:
- 50% of signups run a campaign within two weeks
- Increase the average campaigns per advertiser from 1 up to 5
These are great key results because they are quantitative, specific, and open ended solution-wise. We came up with the idea to offer discounts on campaigns run within the first week which led to many businesses running repeat campaigns. This greatly increased revenues since companies were purchasing 3-4 full priced campaigns after a single discounted one. OKRs helped define the goal and focus on measurement. By putting in the multiplier of 5, it was not an arbitrary statement like “grow the number of campaigns.” The measurement aspect leads to a special type of focus that is more effective than making broad statements about improvement. It’s hard for qualitative results to ever be substantial and they are highly subjective.
Ben: Would an example of qualitative result be a goal like “Launch the new training” as opposed to “Certify 25 sales reps on the new training methods”?
Niket: Exactly, qualitative goals tend to under-represent our capabilities as well because they fall into the lowest common denominator. If I say ‘launch new training for the sales team’ I might do that for 1 person. If I say train 50 new sales team members and only train 10, I’ve still 10Xed my original goal.
Ben: Can you share a story where defining OKRs actually changed a business model?
Niket: Yes! In one case, defining OKRs actually led to a complete change in our business model. We had a business with a great technology that planned to sell direct to consumers. They had a free version and an upgrade path to a paid product. To drive revenue, we needed to drive conversions and leads through the sales process. However, we used OKRs and looked at the metrics which forced us to confront the fact that we could not really make money selling direct. So now, we’re focusing on a syndication and licensing model which is putting us on track to be wildly successful. At the end of the day OKRs is simply a form of critical thinking. It forces you to understand the nuances of your business so you truly understand what you are building.
Ben: Do you think software for OKRs is critical or is Google Docs sufficient?
Niket: I think Google Docs work just fine. I use a doc at my workplace (with a fledgling engineering team and involved software products). I have nothing against software built to manage and create OKRs, but the general idea is that OKRs should be simple and transparent.
Google Docs are easy to share. I think it’s easy to have company OKRs, individual product area OKRs, and team OKRs (and potentially individual OKRs). Software helps do this at massive scale and Google Docs may become ineffective once you reach 200+ employees. The key is to minimize process while making sure you have clear goals written down and active ways of making sure you’re walking toward them. I hope that everyone uses OKRs. There’s a huge need to make work more measurable. I think OKRs.com has a great offering, and I hope people get inspired by the OKRs template I created about a year ago.
To explore how you can best use OKRs to make measurable progress at work, contact Ben Lamorte, [email protected].