BetterWorks held its first Goal Summit last week. Kris Duggan, BetterWorks CEO, opened up the event. He proposed a new goal system that is more open, measurable, and frequently updated. Duggan explained how making everyone’s goals visible to everyone in the organization can reduce politics and silo effects at work.

I left the summit even more convinced that Betterworks is ushering in a new era of goal setting and collaboration that will drive better execution.  Donald Sull gave one of the two presentations I will be discussing in this series of articles. Sull refers to this new era as “Goals 3.0”. This first post features key takeaways from John Doerr on Objectives and Key Results (OKRs). Doerr titled his talk, “Why Goals Matter: A Fireside Chat with John Doerr. John’s thoughts on why your company needs to implement a goal setting process right now, and common pitfalls he sees when it’s not done right.”

John Doerr on OKRs

Doerr explained how he introduced OKRs at Google. He explained that each organization must tune the OKRs model and adapt it to their culture. I agree with Doerr that organizations can adapt their use of OKRs to help define and shape their culture.  John provided several core components of the OKRs model including:

Everyone does them (individual contributors, not just team leaders)

There’s a regular cadence (Intel did them monthly; Google does it quarterly)

Include the stuff that matters most (No need to put everything you do into an OKR)

Goal system should be separate from compensation (Prevent gaming the system)

How many OKRs?

Doerr suggested 5-7 Objectives with 4-5 Key Result each.

These numbers are a bit higher than the original guideline from Doerr’s Basic Hygiene slide as presented in the 1990s to Google: “Maximum 5 objectives with 4 key results.”  I’m happy to see the increase given that my work with OKRs suggests that making goals more granular can make them more actionable. For more, check out How Many OKRs Should You Really Have?

Doerr noted that until BetterWorks, OKRs were often tracked in WIKI, Excel, or some other general productivity tool which made OKRs a disaster to track across the organization. Doerr’s positioning of BetterWorks as defining a new era where tools will be available to support OKRs is spot on. I could not find such a tool after helping a mid-size software company get started with OKRs even in 2013!  John expanded on this basic hygiene slide during his talk with Kris:

OKRs are used on a rhythmic basis

Intel set new OKRs each month. This frequent cadence reflected their culture. Although the default is to reset OKRs each quarter, some organizations update OKRs every 6 weeks. OKRs can be set on an annual basis in parallel to a more frequent cadence. Paul Niven and I provide an analysis of such a “dual cadence” in our upcoming OKRs book.

OKRs are more than a declaration

OKRs are used to check progress. They can inform the language used in staff meetings. For example, if a discussion leads to something really important, a manager might say “this should be a key result.” OKRs gives you clarity with the intellectual discipline of measurement. It takes time as you develop goal setting muscles. Over the course of several quarters, you and your team get better.

OKRs can but need not be graded

Doerr also updated the OKRs community on best practices for grading OKRs. Google apparently started as done, not done, or half-done, but evolved their own 0-1 scale with decimal-level resolution. Some rate OKRs with traffic lights. Duggan and Doerr also suggested that organizations beginning to implement OKRs should consider layering in grading after several quarters. Simply defining measurable goals and making them visible can be a major cultural change so layer in the grading when the organization is ready.

OKRs need not be “tightly coupled”

A special thank you to John Doerr for clarifying the extent to which OKRs are cascaded through an organization. Doerr noted, “OKRs need not be hierarchically coupled.” In Doerr’s famous Football example OKRs are tightly coupled. Google does not have such a tightly coupled system. Larry and Sergey state the company OKRs, inspiring other teams to create their OKRs. The company OKRs roughly inform other OKRs. There is no formal cascading process requiring every OKR to be specifically tied to another. OKRs exist as an open, social contract.

OKRs can define your culture

Doerr explained how OKRs can be adapted to reflect, and even define, a company’s culture. Google feels like OKRs are part of their DNA. Doerr shared a story of how the CEO of Lotus, recall Lotus 123, adopted OKRs and created “NOKRs.” The “N” stands for “Not.” Lotus used NOKRs to specify what they would not do: “Lotus should not do hardware.” Thanks John! In fact, I may try NOKRs with one of my clients to improve focus.

OKRs can help you raise money

Doerr is a great story teller. He noted that one of his prospective portfolio companies posted their OKRs over a urinal in the men’s room.  I think he invested in that company. Talk about taking transparency to the next level! I left the presentation with a strong message. Visibility and transparency into OKRs sets the stage for great things. Especially if you’re a start-up, you should consider OKRs. After all, Doerr concluded his presentation with the following hint, “a good way to get me to invest is to already adopt OKRs.”

More on Goal Summit 2015!

My next post features Donald Sull, Professor at MIT, describing how we got from Goals 1.0 to Goals 3.0.  He titled his talk, “Goals 3.0: Harnessing the Power of Social to Get Work Done: MIT researcher and management expert Donald Sull discusses the effects of technology on the evolution of MBOs and goal-setting.” Videos of all presentations will be available soon. For more on Goal Summit, check out Brett Knowles’s summary of a couple other presentations.

To learn more about OKRs and how to get started, please add a comment to this blog and I will reply!