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In the number one New York Times bestseller, Measure What Matters, legendary venture capitalist John Doerr reveals how the goal-setting system of Objectives and Key Results (OKRs) has helped tech giants from Intel to Google achieve explosive growth-and how it can help any organisation thrive.
In the fall of 1999, John Doerr met with the founders of a start-up whom he’d just given USD12.5 million, the biggest investment of his career. Larry Page and Sergey Brin had amazing technology, entrepreneurial energy, and sky-high ambitions, but no real business plan. For Google to change the world (or even to survive), Page and Brin had to learn how to make tough choices on priorities while keeping their team on track. They’d have to know when to pull the plug on losing propositions, to fail fast. And they needed timely, relevant data to track their progress-to measure what mattered.
Doerr taught them about a proven approach to operating excellence: Objectives and Key Results (OKRs). He had first discovered OKRs in the 1970s as an engineer at Intel, where the legendary Andy Grove (“the greatest manager of his or any era”) drove the best-run company Doerr had ever seen. Later, as a venture capitalist, Doerr shared Grove’s brainchild with more than fifty companies. Wherever the process was faithfully practiced, it worked.In this goal-setting system, objectives define what we seek to achieve; key results are how those top-priority goals will be attained with specific, measurable actions within a set time frame. Everyone’s goals, from entry level to CEO, are transparent to the entire organisation.
There are two types of OKRs- committed and aspirational. Committed OKRs are agreed upon goals that we will achieve. The expected score for these OKRs is 1.0- 100%. Aspirational OKRs express how we’d like the world to look. The expected score for these OKRs is 0.7- 70%. They should stretch the capabilities of an individual or organisation to the limit and thus- should sometimes result in failure. These are the goals that people focus on once the committed goals are accomplished.
The point of OKRs is not to give you a set of tick-boxes, but to structure and stretch your ongoing efforts to achieve your objectives. As Doerr comments, “If you’re getting 100 percent of your OKRs done, that’s not good. You probably weren’t aggressive enough. A good grade at Intel or Google would be 70 percent.” Regularly reviewing OKRs gives managers and leaders the chance to assess priorities and shift in new directions.
CFR stands for Conversations, Feedback and Recognition. These elements, along with OKRs, are foundational to the process of Continuous Performance Management and are how each employee in the workforce can be motivated to achieve today’s goals and to develop their skills to meet tomorrow’s challenges. Continuous Performance Management replaces the universally loathed and ineffective annual performance review with a valuable, continuous process that actually works for the organisation.
The book reinforces that leaders should no longer dictate the work through a top-down cascade. Instead, they “set the context, ask the big questions, and furnish relevant data,” giving employees the autonomy to innovate.
OKRs + CFRs = Continuous Performance Management
In the book, Doerr stresses about Continuous Performance Management and these key elements: Conversations, Feedback and Recognition (CFRs). Doerr describes CFRs as “giving OKRs their human voice.”
Team members want and need real, authentic relationships with their managers. This trust is necessary for coaching, feedback and development to be effective, and it is through talking together about both work and life, that this trust is built. To positively influence performance, coaching and feedback need to happen continuously, not be saved up for a scheduled review timeline. Feedback also needs to flow bi-directionally and between peers. This is especially important as the world of work has moved from hierarchy to one where problems are solved within cross-functional teams.
Positive recognition also needs to be continuous-both from managers and their peers. And, importantly, rewards and must be individualised to each employee. This is especially important for top performers who need to see their outsized contributions be appropriately rewarded both financially and with unique opportunities to learn, build new skills and take on new challenges.
OKRs provide 4-key values
- They focus the organisation on what matters
- They allow us to measure our progress towards those goals
- They enable large groups to work together in alignment, and
- They allow us to stretch to achieve things we wouldn’t have thought possible.