How to Use Google's and LinkedIn's Tool for Goal Setting

Learn to use the framework, OKR (Objectives and Key Results), that played a big role in the growth and success of companies like Intel, Google and LinkedIn.  

Many of us lead, or are part of a team, that leads a company, business unit, functional team or project team. At the highest level the company has some goals and each of us set our own goals and ideally each should help achieve the company's goal. In a previous blog, I wrote about goal setting and the importance of using stretch goals and breaking down those stretch goals into S.M.A.R.T goals. The Apollo landing served as a model example where thousands of smaller goals achieved from 1962 onward lead up to the successful moon landing in 1969.  That's the way we all see our organizations working.

However, the reality in most organizations including mine may be a little different. You start out the month or a quarter with all the right intentions and goals you have in your head or maybe even on paper somewhere. The others on your team may have slightly different goals and maybe even very different ones. Some may even have many goals. The people you lead may not even know about these goals because you didn't communicate the goals with the team but only the tasks which you think may help achieve them. Even when in the beginning you do capture and communicate well, along the way you veer off course due to the issue of the day and by the end of the month or quarter feel that you may not be working on anything that supports the original goals you set. Your analysis of this situation usually has you believing you had the wrong goals so you change them for the next quarter. Any of this sound as familiar to you as it does me?

 

OKR

So what's needed is a framework that can take a company's stretch goal and break it down into goals for the many layers within the company. From company into  functional organization (Marketing, Sales, OperAndy_Grove.jpgations), into teams into individuals and then the organizing principles to keep it going. One such framework, Objectives and Key Results (OKR), has been credited with contributing to the high growth and success at companies like Google, Linkedin, Twitter and Zynga. John Doerr, the Venture Capitalist, that has funded and helped many of these companies start and grow into global icons has been the leading evangelists for OKR. He learned about OKRs when he worked for Intel under Andy Grove in the 1970s. Intel was using OKRs to help them transition from memory chips into microprocessors. Doerr liked the idea of seeing Grove's OKRs, his manager's OKR and his own OKRs and see how they all linked together. He hasn't stopped using OKRs since then.

Grove felt OKRs would answer two very important questions:

  • where do you want to go?
  • and how do you know when you get there?  

john_doerr.jpgAfter moving to the VC firm, Kleiner, Perkins, Caufeild and Byers, in 1980, Doer began to introduce OKR to the startups that KPCB was funding which included Google. He felt OKRs would give a disciplined approach giving the firm the following requirements for successful goal setting:

  • goals must be supported by the entire organization
  • goals must be measurable or have quantifiable targets
  • goals should be aggressive yet realistic


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Framework

The O is for Objectives.  OKR needs objectives that are:

  • ambitious
  • inspiringOKR_framework.png
  • qualitative
  • time bound
  • actionable by the team

The KR is for Key Results and they should be:

  • measurable and quantifiable
  • make the objective achievable
  • lead to grading of the objective 
  • difficult, but not impossible

The best practices for OKR are:

  • 1 objective at any time is best but no more than 3
  • each objective should have 3 key results
  • set OKRs quarterly
  • review weekly
  • getting to 70% results is success if you define ambitious goals
  • OKR should flow from company to team to individual
  • key results help define tactics and projects


OKR Examples

At the Company level:

Objective: Beat our Q1 financial targets

Key Results:

  • achieve > $ 10M in product revenue
  • international sales of at least $ 2M
  • customer churn rate less than 5%

At the functional team level:

-Marketing:

Objective: Deliver superior quality new leads

Key Results:

  • deliver 1000 new leads in Q1
  • increase monthly web page views by 30%
  • outbound email campaign targeting > 5000 prospects

-IT:

Objective: Improve technology infrastructure efficiency

Key Results:

  • reduce latency on requests by 30%
  • reduce maintenance downtime by 10%

 

Tactics to achieve the key results would define the projects and tasks that would flow down to the individual level.

Co_Team_Ind.png


 

Managing OKRs

Setting the right objectives and key results is challenge but it's also the easiest part of the process. Managing OKRs through the quarter and keeping everyone engaged, prioritized and moving toward achieving each key result is the more critical and difficult part of the process. It's also very easy to fail at this part. This is where each day presents something new, distracting, or troubling that can take you away from your prescribed path without you even realizing it.

In the book, Radical Focus: Achieving Your Most Important Goals with Objectives and Key Results, author Christina Wodtke provides a simple and useful organizing method to manage OKRs through the cycle which typically is a quarter.

Management_quadrant-1.jpgEach Monday, the team meets to review progress against OKRs and commit to the task that will help them meet the objective. The four quadrants are used for this meeting. Upper left quadrant (This Week) the team commits to the 3 or 4 most important things that need to be done to keep moving towards the objective. The lower left quadrant has a list of items or projects that are forecasted for the next 4 weeks - again the list should always be checked to see if they help achieve the key results. The upper right quadrant has the OKR listed and each week the status should be updated on the confidence of achieving each KR. At the start you should set them with a confidence of 50% of achieving them and as progress is made this confidence should go up to 60%, 70%, etc. The lower right quadrant would have the health metrics to make sure customers and team members are in good shape. The purpose of this is to not be so focused on the objectives like gaining new customers or revenue where you ignore current customers or the health of the team making it more difficult to achieve the objective or gaining in one area while losing in another area.


 

Summary

Great ideas and objectives are meaningless without the effective execution to achieve them. OKRs provide an effective framework to execute goal setting that works. It provides the key elements such as transparency, clarity, accountability, focus, and continuity that when absent allows us to veer off course or end up with busy days without actually getting to where we need to go. Tech icons like Andrew Grove, John Doerr and the new generation of tech leaders that followed have credited OKRs as a major contributor to their success. Google has become the most valuable company in terms of market value in the world.  LinkedIn was just acquired by Microsoft for $ 26B. I wouldn't want to argue with their logic. We are implementing OKR in a small way to help learn and refine it for our marketing and sales team. I will share our experiences as we go along in future blogs.

 

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