Chapter 1

Achieving Goals with OKRs

IN THIS CHAPTER

Seeing how OKRs translate aspirations into action

Showing how to write an objective and a key result

Differentiating between OKRs and other goal setting systems

You've probably set many goals in your life. In fact, setting ambitious goals is a hallmark of the human experience. As a species, humans are ardent strivers. Whether the goal is to conquer space, cure debilitating diseases, or perform five push-ups every morning, people are constantly working toward desired results. In many ways, the pursuit of goals gives life meaning and purpose through the articulation of what you want, the planning to meet it, the execution of that plan, and, ultimately, the very rewarding experience of achieving your goals.

Organizations are avid goal setters as well, and OKRs is the framework of choice for successful goal setting around the globe in every possible type of organization: startups, nonprofits, government agencies at all levels, small- and medium-sized enterprises, and Fortune 500 conglomerates. OKRs stands for Objectives and Key Results, a simple and proven system for translating your aspirations into reality. OKRs provide the structure necessary to create goals that are crystal clear and will keep you laser-focused on concentrating your efforts on what matters most to deliver the outcomes you want.

This chapter introduces the OKRs framework in broad strokes. I talk about the value of goal setting, examine the components of OKRs, and briefly compare the OKRs approach to other goal-setting systems you may be familiar with.

OKRs Are a Goal-Setting System

As noted previously, humans are avid goal setters, constantly striving to improve our performance regardless of the field or endeavor we choose. Perhaps you have experience in setting goals in some of these domains:

• Family: Partner, children, extended relations
• Physical: Health, fitness, and wellbeing
• Work: Career, volunteering
• Spiritual: Religious or other spiritual affiliations
• Relationships: With friends or others
• Hobbies: Interests beyond work

Some of my goal-setting memories bring me a few chuckles, such as my goal of winning a "Best Screenplay" Academy Award after taking one screenwriting class. I even pictured Steven Spielberg having the honor of bestowing the Oscar on me. Hey, the more specific a goal the better, right? I talk a lot more about the value of specific goals in this book.

Your company probably has goals related to sales, customer satisfaction, retaining the best people, and a host of other elements designed to propel you past your competition. Whether people have their companies or themselves in mind, there is little doubt that setting goals is a very healthy and positive activity, one that everyone should pursue with rigor. Problems occur, however, in how people go about writing and constructing those goals. That's where many people, whether crafting goals for companies or themselves, get stopped in their tracks almost instantly.

It's common, for instance, to write goals that are vague and nebulous: "Get more fit." "Be the best company in our industry." They sound good - and few would argue with the merits of either of those examples - but the quality that specifically marks real success is missing from both. A number of other pitfalls loom out there in the goal world as well, such as

• Setting unrealistic goals that you have no genuine chance to achieve
• Having too many goals at one time
• Failing to account for any assistance you'll require from others in achieving your goals

Goal setting is perceived by most people to be a relatively easy notion, one that requires little in the way of preparation or study. I return to this topic throughout the book, but for now, just be aware that in order to effectively implement OKRs in your organization, you need to change the way people think about the process of goal setting.

Despite the potential challenges, goal setting is one of the most powerful things you can do in your organization (and your life). You just need a better, more reliable system, and that's where OKRs come in.

Sounds good, huh? Maybe if I'd have known about OKRs back when I was practicing that Oscar speech, I'd actually be clutching a gold statue now. The good news for me and you is that it's never too late to succeed, so go ahead and get started!

Seeing the Value in Goal Setting

The title of this section makes it sound as if I'm trying to convince you that goal setting has something to offer. But maybe you're already convinced and are a believer in the power of setting ambitious goals, with a lifetime of experience to back up that claim. If so, great - we have that in common. On the other hand, perhaps you do need to be convinced of goal setting's value. You may be reading this book because your boss placed a bulk order, handing out a copy to every manager in the company with strict orders to read it, and over the weekend no less. Maybe you came up in the school of hard knocks and don't believe in the woo-woo world of setting goals. Well, I've got news for you: Goal setting, especially with the use of OKRs, really works, and I'm going to win you over to this idea, I promise.

Back in 1968, when the Beatles song "Hey Jude" was dominating the airwaves, a little-known professor from the University of Maryland named Edwin Locke published a blockbuster article that would revolutionize the field of goal setting. "Toward a Theory of Task Motivation and Incentives," based on Locke's pioneering research, showed that setting goals led to higher performance in a wide range of domains. Whether it concerned office workers toiling in smoke-infested offices (it was the 1960s, remember), loggers felling timber in northern British Columbia, or truckers rolling along the blacktop, Locke demonstrated that setting goals improved performance in a statistically significant fashion. It wasn't uncommon, for example, to see performance gains of more than 200 percent! Forget free love and flower children; the real revolution of the 1960s was goal setting.

Locke went on to collaborate with a professor from the University of Toronto named Gary Latham. Together they conducted hundreds of studies on goal setting and reviewed hundreds more, all culminating in their 1990 magnum opus, A Theory of Goal Setting & Task Performance. Although it's not a page turner a là Dan Brown or Agatha Christie, it's a revelation. Locke and Latham demonstrated unequivocally that setting goals led to improved results, and as an added bonus, working toward a goal boosted motivation.

Locke and Latham made clear that certain types of goals are better than others. Specific and challenging (but not too challenging) goals were critical to improved performance. Both of these characteristics (specificity and challenge) are vital to OKRs, as you discover in the chapters ahead. Speaking of OKRs, I think I've kept you waiting long enough, so let me know introduce the star of our show, "Objectives and Key Results."

FROM MBOs TO OKRs - THE PEOPLE AND IDEAS WHO BROUGHT OKRs TO LIFE

OKRs are not a business fad, but are based on, and have since improved upon, a number of common-sense, historically proven business principles. Here's a brief sketch of some major players in bringing the OKRs framework to where it is today:

Peter Drucker: Considered by many to be the greatest management thinker of the 20th century, Peter Drucker was a true management rock star and writer of more than 30 ground-breaking books. In his 1954 title The Practice of Management, he introduced the concept of Management by Objectives, or MBOs. Very briefly, the idea was that all employees need objectives that spell out what contributions are expected of them and their teams. Drucker tied the idea of having objectives to the company's strategy (goals of the business) and said they should be cross-functional in nature when necessary. Drucker had a huge and influential megaphone, and companies from coast to coast began creating MBOs.

Andy Grove: As CEO of Intel from 1987 to 1998, Andy Grove was behind much of the growth of Intel, leading the company from manufacturing memory chips to being the globe's foremost supplier of microprocessors. Grove had a keen interest in management and recognized the potential benefits of a well-constructed and implemented version of Drucker's MBO system. Grove boiled it all down to just two questions to be answered: 1) Where do I want to go (the objective); and 2) How will I pace myself to see if I am getting there? He eventually called the answer to the second question your key result. So when we use the acronym OKRs today, we owe it to Grove. Thank you, Andy!

Grove also experimented with the cadence of settings goals: Out were annual goals, and in were quarterly and sometimes even monthly objectives. Fast feedback and agility were critical in staying ahead of the competition, so OKRs had to be consistent with that goal. Grove also believed that the concept of stretch was vital with OKRs.

John Doerr: Doerr was a partner at the Silicon Valley venture capital firm Kleiner Perkins Caulfield & Byers when they made crafty bets on...