In a May 27 webinar, Doug Dennerline, Betterworks CEO, hosted John Doerr, pioneering VC (Amazon, Google, and many more) and OKR evangelist author of “Measure What Matters,” to explore using OKRs/CFRs “To Survive a Downturn & Thrive in a Recovery.” Joining them were Ryan Panchdsaram, a co-founder of What Matters and former Deputy US CTO in the Obama Administration, and Lisa Shufro, chief story-teller at What Matters. The following is a transcript of the discussion’s highlights, edited for length and clarity.
THE F.A.C.T.S. ABOUT OKRs
JOHN DOERR: Let’s start with the F.A.C.T.S. There are five main benefits to adopting OKRs’ transparent goal system:
- Focus: Choose the few things that really matter
- Alignment: Get everyone on your team pulling together as opposed to going in different directions.
- Commitment: Raising a team’s belief that a goal is important from just being told it’s important by a manager to creating a true social contract to make achieving goals a team’s social norms.
- Tracking progress in a steady cadence: quarter by quarter, month by month, sometimes weekly, in staff meetings against the few focused things that matter.
- Stretching: Reaching for more than you can probably achieve, but in an environment where it’s OK to fail. Larry Page (co-founder of Google) used to say, “I’d rather have the objective be to go to Mars, and if we fall short, we’ll get to the moon. This is how you make moonshots.” But be careful: if you constantly achieve 100 percent of your goals, you could be “sandbagging” – not stretching enough. But if you only achieve 30 percent or 40 percent, that’s a sign there might be another kind of problem.
OKRs represent a very simple system. The “O” is what you want to accomplish. “KRs” are how we’re going to get it done. Now, really good objectives are significant, concrete, action oriented, and inspirational.
Objectives are not one immutable thing. Some objectives live for years as people work toward them, but realism provides flexibility. The pandemic and its aftermath will obviously create change in organizations’ objectives, which in turn means the key results must be rethought and readjusted. Just remember to make the key results specific, time-bound, and aggressive but realistic.
To this day, every Google employee – 100,000 of them – writes down their OKRs, publishes them for everyone to see, grades those from the last quarter, and then sets them aside, because they’re not used for bonuses at Google, they’re not used for promotions. They’re used for a higher purpose, which is to get collective alignment on the things that matter the most.
Let me tell you an OKR story about Sundar Pichai, who’s now CEO of Google and Alphabet, when he was a product manager in charge of a new browser, Chrome. Back in 2007, 2008, the internet was slow and the dominant browser – Internet Explorer – was slow. Larry (Page) and Sergey (Brin) gave Sundar the assignment to make the world’s best browser, to make one that was very rapid starting with literally nothing and a pretty well established competitor.
Sundar got very clear about what the objective should be and how he would measure the objectives and the key results. His objective was, “I’m going to make the world’s best browser.” How am I going to measure my progress against that objective? He said, “Well, I could do it by revenues or click-throughs or any one of a number of metrics.” But instead he chose his key results would be simply by number of users.
And then for the next three years, he stayed with that goal. In fact, in the first year, he set a goal to have 20 million users, and he missed it by a mile, he only got 10 million users. In 2009, he upped the ante to 15 million users. Same objective, build the best browser. But as measured by the key results – the magic words – the number of users. They got to 38 million, almost 70 percent. In 2010, he raised the bar again, to 100 million users. This time, with greater speed, enhanced distribution, doubling the marketing, he blew the number away. He got to 110 million users.
Now, I love that story. Not so much because it has a happy ending, but because it shows the power of choosing the right objectives and key results, having them be nearly timeless, and staying the course quarter after quarter, year after year.
DO OKRs STIFLE CREATIVITY AND REDUCE RISK-TAKING?
DOUG DENNERLINE: John, let me ask you: especially in this uncertain climate, don’t OKRs stifle creativity and diminish a team’s willingness to take risks?
JOHN: I get asked that a lot. And the short answer is no. But I think an even better answer comes from someone who might seem an unlikely adopter of OKRs, Bono of U2, who uses OKRs in his nonprofit ONE, to focus everyone in the organization on eliminating global poverty.
Bono has said, “You’re passionate. I’m passionate. What action does your passion lead you to do? If the heart doesn’t find a perfect rhyme with the head, then your passion means nothing. [OKRs] give us an environment for risk, for trust, when failing is not a federal offense. When you have the right structure, environment, and the right people, magic is ‘round the corner.”
DO OKRs PLAY A SPECIAL ROLE IN THE NEW WFH ERA?
I think the biggest question that’s on people’s minds is in this current environment, where people are home, by themselves in some cases, with their families, their managers are distant from them. It’s a new form of leadership in terms of manager/employee interaction. How do you think OKRs should happen in this current environment?
For the foreseeable future, employers are going to give employees a lot more choice about where they work and how they work. There has been, up until now, a lot of theoretical and academic happy talk about agile organizations and leading and managing remote workforces in a real-time manner. But until now it was more talk than substance, and now we’re all faced with it.
There’s really no choice. To be effective, you’ve got to meet – virtually, because physically isn’t happening – and you’ve got to communicate about a clearly shared set of goals and methods, you’ve got to have transparency about where you’re going. An OKR/CFR system like Betterworks truly creates transparency at a level never possible before, as well as the best alternative to meaningful meetings face-to-face.
Transparency really is key. I just published a blog today explaining how an OKR/CFR system gives everyone in an organization – from the CEO to the most junior employee – total transparent visibility to see everybody’s goals and everybody’s progress on those goals. Which becomes even more important for alignment and motivation when so many people are working remotely.
I think another important thing you could talk about is one of the benefits of the cadence of OKRs – quarterly or even more frequent – vs. the traditional annual planning process and annual reviews. When I worked at Cisco, at the beginning of the year we put a tremendous amount of work into the annual plans, and then we put them in a drawer. But with OKRs, the ability to adjust along the way as circumstances change is pretty powerful, is it not?
I think OKRs become the lifeblood of operating in this new world. It’s powerful. It’s essential. Whether you’re a millennial worker or a seasoned leader, providing real time feedback and real time tracking against the ever-changing world is essential.
I think it’s important for every organization to choose the cadence with which they adopt these. What I’ve observed over time, whether organizations go quarterly, or monthly, the places that really use these to advantage don’t check them every day, but they become part of the weekly rhythm and the language of an organization. They’re used in staff meetings, they’re used in one-on-one meetings.
For companies that are on the annual track and want to speed up the cadence, there’s a lesson from a company I know where the CEO had each of the team leaders get up and say, “We all know the company’s objectives for the year. Now here are my personal objectives on top of that.”
So a company can put in place a dual timing track where you have annual OKRs as well as quarterly ones. The annual ones are reminders of where you want to be at the end of the year. The quarterly ones tend to govern more of the immediate behavior.
USING CFRs WITH OKRs
Can you please talk about how people are using CFRs along with OKRs?
I’d love to talk about that. I like to describe them as a sibling, a twin sister or a brother for OKRs because OKRs set the goals. Let me use a football analogy: OKRs are the goal line, the objective, and you can think of the key results as being the 10 yards teams have to advance to get first downs, keep the ball, and keep moving toward the goal line.
But the objective and key results are by no means everything that’s going on in the game. CFRs are everything else. They’re the conversations, the feedback, and the recognition that’s creating the strategy, calling the plays in the huddle. CFRs are the preparation you do before the game in reviewing game tapes to learn about it. So, feedback in the moment that you as a leader give to your team or you get for yourself, is crucial. I mean, you can’t imagine winning a football game or a Super Bowl without those added elements.
Especially with a new generation of workers – Millennials, Gen Z – they really want to see the big picture. They don’t want to be micromanaged, but they do want constant feedback on the spot, quick and rapid feedback. So, the CFR component of the Betterworks system is one of the really remarkable things that allows people in Operations or HR leadership to set up a regular rhythm for feedback and user surveys and connects those to the OKRs in a very coherent way.
We find it very important that if it’s just an employee going into the Betterworks application and providing updates to their goals without a conversation around it, it feels off-putting and weighty to the employee or the individual contributor. It’s a tax on them that we don’t want to ask them to pay, because we want to give something, not just require something.
The benefit of CFRs is sitting down with their mana