Measure What Matters: How Google and Other Companies Succeed
How venture capitalist John Doerr has helped top companies adopt an OKR framework and achieve big business milestones.
CEO’s and top leaders of companies set out each year trying to first set and then achieve a few key business goals. The majority of them end up communicating to the wider company a few key areas of focus or priorities for the year. But that is where it stops. There are no metrics or defined ways to measure how the company defines success at the end of the year. This leaves many employees blindly working towards what they believe is the most important project.
John Doerr spent several years at Intel, working under famed management expert Andy Grove. It was clear that led by Grove, Intel was able to thrive in an intensely competitive semiconductor business. How were they able to do this? An early framework of objectives and key results (OKR) was a key driver. For Doerr, no single factor has more defined impact than clearly defined goals that are shared freely. To put this into action, it takes focus, alignment, and accountability above anything else. A lack of alignment is the #1 obstacle between strategy and execution.
Intel OKR’s focused on the quarterly “what” and “how”, were made public, mostly were separated from compensation, and were aggressive/aspirational. Why were they made transparent to everyone?
92 percent of employees feel more motivated to reach their goals if colleagues could see their progress.
Tracking openly and with accountability promotes internal networking, as employees with shared interests are more likely to collaborate and engage with each other. With an OKR management platform, all relevant information is known and updated regularly. You are able to get everyone working on the right things more effectively.
With annual performance reviews, for each direct report 7.5 hours of manager time is spent digging through goals set at the beginning of the year, emails, meeting notes, and other documents. Just 12% of HR leaders deem the annual performance review process “highly effective”. Only 6% think it’s worth the time it takes.
So how can companies replace once a year performance reviews with a better framework? Objectives and key results need to be defined and communicated each quarter. Objectives are the “whats”. They express goals/intents , are tangible, and realistic. The key results are the “hows”. They express meaningful milestones towards the objectives. One of the best examples seen applying this framework was YouTube’s aggressive yet attainable key result of 1 billion hours of watch time. By relentlessly pursuing this North Star metric, the company was able to have all YouTube employees work towards achieving this in just four years. How is this achieved at an employee level?
Regular recurring 1:1’s with leaders and their direct reports can visit progress towards these along with a CFR framework.
Conversations-authentic, richly textured exchanges between manager and contributor, aimed at driving performance
Feedback-bidirectional or networked communication among peers to evaluate progress and guide future improvement
Recognition-expressions of appreciation to deserving individuals for contributions for all sizes
While it may be difficult at times to contextualize key business goals into an objective and key results framework that applies and can be translated into each role at a company, it is clear that it can be done correctly at scale if everyone involved is invested in putting in the work to properly define things (Google, Adobe). Would you rather have your employees more towards something finely measured and specific or something that is nebulous, broad, and undefined in terms of what success means?
