The talk today is "Using OKRs
to Drive Results," and
the subtext is "Secrets to Crushing Your Goals."
We're going to talk a lot about goals today,
and I don't think you would be here
to listen to this talk if it hadn't been for
the work of OKRs and how OKRs can be applied at scale.
A great book came out in the last year from Eric Schmidt,
"How Google Works."
In that book he actually said, "In 1999, John Doerr
introduced OKRs to Google and changed
the course of the company forever."
It's amazing to me that from 40 people,
when Google was a small company, now it's 60,000,
they still use this process quarter after quarter, basically 15, 16 years later.
Also a great book is by Laszlo Bock who's the head
of people operations for Google. "Work Rules!"
just came out and goes into a lot of the topics
that I'm going to share with you today as well.
I actually wouldn't be here if it wasn't
for John Doerr as well.
John is actually an investor in my company
Better Works alongside with Bing Gordon at Kleiner Perkins,
and I have the great pleasure and privilege
of working with two major Googlers.
One is Shona Brown.
Shona actually built out the entire business operations
and people-operations function at Google.
She was there for about 10 years.
She's now retired.
She hired Laszlo whom I mentioned runs
people operations there.
It's an amazing kind of group of people I have worked with,
and we'll talk a lot about OKRs, how they emerged,
how they were established, where they are today and where things are going. But for me, my personal story is just feeling
very privileged to have worked
and to be working with these people.
We take the Google metaphor
to an extreme at my company.
By chance, this wasn't planned, we ended up moving in to
the very first Google office on University Avenue
in Palo Alto.
The photo above is when Google was 40 people,
and they did their round of financing
with Kleiner Perkins. The photo below
was actually last week. We decided to do Hawaiian shirts
and go out there and take a fun photo of that.
Setting and Meeting Goals With OKRs
Now let's talk about a quick history.
In the beginning we heard about MBOs,
management by objective,
and goal-setting in general.
Obviously that's been around for a long time.
Peter Drucker instituted management by objective,
which is a more formalized process of goal setting
and some really good things came out of that.
Obviously, getting people to focus on
a results-oriented type of philosophy was great.
In terms of the gaps or opportunities, I would say generally they're not very frequently
updated, probably annually. This was how
people thought of management by objective.
It was fairly siloed. It wasn't very cross-functional.
It was tied to performance reviews and compensation,
and so as a result, once you tie things
to performance management, they have to be private. You're not going to share your goals
with people, because it's more of a personal
kind of private thing.
And very top-down as we'll see.
Starting in the '70s,
when John Doerr was working with Andy
at Intel, OKRs emerged as the management practice
for how they wanted to run the organization. John was so impressed by what that meant
in terms of galvanizing the organization
that he actually took that to all of
the subsequent companies that he's worked with. Whether that's Amazon, or Google,
or many, many, many others,
it's basically been the legacy of John
and also the Silicon Valley.
To move to this much more modern,
operating cadence around, how you do goal setting, I think this is really something
that Silicon Valley has the opportunity to share
with the world. The key benefits
we can talk about here are shifting from an annual process
Think about what that means.
If you were
doing annual goal-setting today, that's a pretty infrequent
kind of cadence around checking in on things,
aligning your organization, being responsive to the market,
being dynamic, being competitive.
Clearly, moving to a quarterly process
this concept of being transparent and open
around your goals versus private and thinking of them just as performance evaluation
Another key thing we're going to talk
about here is this concept of stretch thinking. Once you're freed from the constraints
of using them as a performance management vehicle,
you can now encourage your team to set stretch goals
and really push themselves as hard as possible
and to stretch as possible. We'll see that has the opportunity
to even potentially open up new opportunities
of innovation when you encourage
that kind of behavior.
Why Use OKRs?
So let's just start with "What are OKRs?" By the way, show of hands,
who actually does OKRs right now?
OK, about a third of you.
And who's thinking about OKRs?
OK, a third of you and then
a third of you came for the free drinks
and dinner, I guess.
OKRs are simply a management methodology
that helps companies focus their effort on
what's important and to do that at scale
across the organization.
I don't think you can be too small
to think about OKRs. One or two people
in a team, or a group, or a division,
or a department, or a company,
or up to literally 60, 80, 100 thousand people
could do this at scale.
If we think about OKRs, objectives
and key results, that's what we're talking about,
the objectives are "What do I want accomplished?"
I do think they can be
very aspirational and significant
on a personal basis.
What's going to get you out
of bed in the morning
and also be significant for the company?
They are basically aligned
with the bigger picture of what
we're all working towards.
When we think about key results,
the key phrase here is actually "as measured by,"
my objective as measured by my key results. How am I going
to accomplish that?
How am I going to measure my progress on that thing?
From a key-results standpoint,
make the objective as clear as possible,
measurable, in limited time. It
starts to be very specific
about how you're going to do those things.
Why use OKRs?
We talked about this a little bit,
but the key here is disciplining your thinking and
communicating to the rest of the team
what you believe is important.
Get everybody coordinated
around the key set of initiatives.
I was speaking with a CEO recently, and he said
that he was worried they didn't do OKRs.
They didn't actually do any kind of open,
collaborative goal setting.
It was a very traditional, annual process,
and he said that he was worried that up to
25% of the organization was working on the wrong things. How would they know?
They're not malicious. They're doing their best,
but because of this lack of clarity,
they're wasting time.
They're duplicating effort.
They're working on the wrong things. OKRs are established indicators
for measuring progress.
They focus our effort.
A great quote from Rick Klau
who's over at Google Ventures.
Rick has a great "How Google does OKRs" video
on YouTube that I would encourage you to watch,
and basically his quote is,
"OKRs tell you and your team what you're doing,
and most importantly, what you're not doing."
Setting Clear Objectives
Not only are we going to talk about
all the things around tracking our progress such as
setting goals, writing them down,
coordinating with our teams, but it's really important,
at the beginning of that process. to say, "What's important? What are we really trying to achieve?
By expressing that, what are we also
choosing not to do?"
That's part of leadership, basically having the courage to know what's important
and know what needs to be differed,
delegated, or just ignored altogether.
The following couple slides
are borrowed from a deck that Andy Grove
and John Doerr worked on at Intel,
but I've updated them to keep it a little bit more modern.
John uses this football metaphor.
I ended up calling the name of the football team here
"The Sand Hill Unicorns" because, I guess, unicorns
are popular animals nowadays.
You can see here that
if you're John Doerr and you're the general manager
for the unicorn's team, your number one goal
is to make money for the owners.
So you might say my objective
is to make money for the owners.
We need to do two key things.
I know if I do these two key results
it will fulfill the objective of the organization,
and those are win the Superbowl
and fill the stands to 88%.
You can then start to see how I need
to get Larry on my team involved in supporting
this objective and how can I get Jack
driving this as well.
Our objective is going to be
win the Superbowl, and the key results are
a 200-yard-per-game passing attack,
third-ranked defense in the NFL
and getting the punt return
to the particular target that we need.
Similarly, Jack has his own objective to
fill the stands to 88%.
has to go back to OKR school because
his key result is "hire three colorful players."
I'm not sure exactly how we're going to measure that.
So maybe we need to do some coaching
there for Jack. But a couple other key results make sense.
Interestingly, and all of this can cascade down in this particular example, we actually see that
the key results for my objective might actually become
the objective for the person that works for me
and subsequently add an additional layer of key results.
I think that whole cascading process
demonstrated here can happen sometimes,
but it's not a requirement, and all we're doing
is talking about, at each level of the organization,
what's important and how do we make sure
that we're fully coordinated on
every element of the plan.
Then if we talk about
clearly if we're going to be focusing
on what's important and what's also not important,
then we probably can't have
too many objectives.
Typically we see that having three, four, five objectives
tends to make sense.
If you're familiar
with the Alphabet news from Google,
I actually think that one of the reasons
why they're moving to the six-pronged
business model, of having six key businesses now,
is so that they can actually have three to five
objectives at each of those six.
Imagine if you're Larry today,
and you've got drones, you've got
longevity, you've got health care
and you're doing work in self-driving cars.
With all these different programs and the ad business, how do you come up with a set
of objectives that represents all of those
and keeps that at three to five
across one entity? That's really a difficult thing to do.
By breaking them out into those six divisions now,
I think that actually allows them to do their OKRs
in a much more scaleable way.
Interestingly, at Google, they do encourage
that a very large percentage of their objectives
are sourced from a bottoms-up standpoint.
The example I gave in the kind of football analogy
was a very top-down, cascading kind of model.
The boss then sets the key results
which then become objectives and so on.
But there's a lot of research,
and we'll talk about it, that around
when people actually set their own goals,
and they set their own targets, and
they're creating this bottoms-up aspect
to how they should express that,
it actually, interestingly, increases
the sense of ownership.
When they create
their goals on their own, people
that end up setting their own targets against
their own goals set a higher target than they
otherwise typically would have been assigned.
And their belief of attainment is actually higher
in that higher target than when it's assigned to them.
Basically the point is is that clearly, as leaders,
we have to set the directional
trajectory of the business. But in terms of how the details are going to culminate,
there's a lot of benefit to allowing the organization
to bubble that part up,
if that makes sense.
Does that mean at Google,
with the examples that I've talked about here,
does that mean that they don't do performance management?
Well, yes they do still continue to do
performance management. The point here is
that goal management, and how we do goals,
and what we're working on, and how are we aligned
and coordinated is separate from how are you going
to be evaluated for your performance.
That doesn't mean that they're completely unrelated,
that they don't cross paths ever,
but it does mean that your goals might inform
some of your performance conversation.
It's not the entire basis of
your performance conversation.
John's actually a great example. If how you set goals is going
to directly inform your performance evaluation,
then you're obviously encouraged to set
very conservative goals, which is going against
the spirit of what we're talking about
if we're really trying to foster stretch thinking
I remember John told me
the story that he brought in sand
literally, sand bags, to the sales leader at Google,
because they thought that they were being too conservative
in what was possible.
So, yeah, no sandbagging.
The question might come up,
"OK, well, if we're doing the goals,
and we're doing that quarterly,
maybe we're checking in monthly,
we're aligned. We're coordinated.
How do we determine if we've done a good job,
and how do we score or assess,
not for the performance management
kind of reasons, but even just to inform
our own? How did we do, and what can we learn?
I would say grading OKRs is very common.
Not every company that leverages OKRs
is already getting sophisticated around scoring
and grading them, but many end up actually taking on an approach
to this self-reflection kind of concept.
Here you can see that
you could score them green, yellow, red,
smiley face, neutral face, sad face, one to ten,
and zero to one.
they're an engineering culture,
so I think they were using two decimal points
for their scores.
That might be a little too many gradations on assessing them,
but here you can see that we came up with
a blended score on this particular objective of 0.7,
and this is where you have to determine
what's your appetite for stretch. From a leadership standpoint,
how do you think about
how we really want to encourage risk taking
or stretch thinking?
At Google they encourage 60 to 70 percent
overall performance; it's considered a good score.
That means that you didn't sandbag,
but you did perform at a very high level.
You set stretch goals, and then you achieved
60 to 70 percent of them, and the thinking there
is shoot for the stars and land on the moon.
It is maybe the way to think about it.
I think you have to decide what's best for your culture.
Let's say you work
in a large company.
You've never done collaborative goal setting before.
You've just been used to doing anual goal setting.
You might want to not encourage
a lot of stretch thinking on day one.
It might be, "Hey, let's just publish our goals openly
and start checking in on them frequently.
It's a huge win."
But I think you might find, after several quarters
of doing that, "Hey, you know what?
Maybe we can start to set more stretch goals, because we're starting to develop
this concept of innovation
and risk-taking, and that seems to be working for us."
A couple things I want to cover.
Now that we've set a foundation for OKRs,
some of the work that we're doing at Better Works
is, "OK, OKRs, they've been around
since the '70s.
They're really starting to catch steam now,
but what do we do to leverage
all of the best practices that exist within
Goal Science and Goal-Science Thinking
and all of the best practices in this field?"
Pillars of Goal Science
At Better Works we actually talk about
the five pillars of Goal Science.
I'm going to talk with you about those things.
The first pillar is this concept of connectedness.
We've touched on that a little bit.
It's not just kind of top-down goals,
cascading, but it's actually how you do
top-down goal development, bottoms-up,
sideways, and do that in an open,
transparent and aligned way. That's important when it comes to goal development.
Secondly, how do we create a supported
culture and attitude around our goals?
To me, once we publish
our goals openly, it actually creates
a social contract to perform at a higher level.
I'll share some data with you about attainment
that changes once you actually start to think
of your goals in a social construct.
There's a ton of data around recording
your progress during the period that actually
That's something that OKRs
haven't really, I think, innovated on.
They were kind of like,
"Let's make a thing open and frequent."
But about recording progress during the period,
that's something that I think is an even newer concept
that we're trying to explore, and I'll share
some data on that.
Adaptability just means
as the business needs change, and as
the priorities change, you should be able to
Some people ask me, "Oh, if I have goals or OKRs set for the quarter,
and the business totally changes,
should I keep running with those original goals
that we've set?
And the answer is absolutely not.
Archive that goal, or move it out of the way,
and come up with something new.
It should always reflect what's important
for you right now.
In fact the reason that I got into goals,
the inspiration for me was,
at my last company we grew to about a hundred people, and we didn't have a formal process for this.
So I started thinking, "How do I make sure
everybody knows what's important
and that everybody can share with everybody else
what they think is important?"
I should be able to, not that I would do this,
but I should be able to wake you up
in the middle of the night and say,
"What are you working on at work
to create maximum leverage
and value for your position in the company?"
And you should have the three to five things.
I'm working on this. I'm working on that.
This is how I'm creating value. This is how
I'm creating leverage. This is how I'm driving results. That's all we're talking about. If the business changes, you should
be able to change that list.
We've already talked about this,
but there's opportunities to drive stretch thinking
by taking this approach. And then there's also
that scoring process that we talked about that actually drives
even further aspirational thinking,
because if you don't score and reflect
on how you did, it's hard to enter
a new period of goal-setting with
those learnings and that enhanced perspective.
I'll just spend a few minutes
going into each of these really quickly,
and I think there's some data
that I can share as we go through this
around what we're learning as we go out
and help companies do this
at a massive scale,
typically in the thousands or tens of thousands
Tracking the Goals of Others
We talked about that
as just top down, bottoms up, and sideways.
By the way, there's a really interesting
HBR article, Harvard Business Review article
that talks about the impact on operational excellence.
For the most part it's the lack of tracking
cross-functional dependencies inside companies.
What they say is that they found that
these companies do the cascading.
We already talked about that and they're
really good at cascading.
They've been doing cascading for a hundred years,
right? But what they're not so great at
is, "Hey, did Bob say he was going to do that?
Or did Lisa say she was going to do that?"
Did that get on their goals?
I can't remember, and now I need that thing
to happen in order for my thing to happen,
and the nature of these businesses now is
so dynamic and so competitive, and agility
is so important that if you don't
start tracking all of these things,
that creates risk around execution and business results.
Just a quick stat,
we look at who's looking at goals in the system,
and it turns out that people actually spend more time
looking at other people's goals versus their own goals.
There's a voyeur aspect to it which I think
is pretty cool.
People looked at their manager's goals
more than their own, but even their peers.
They spend a lot of time doing that. Imagine how great it would be
if you just joined a company and you could go and see
what are all the people working on,
what's important to them.
Why do they think that's important?
How can I align around that?
What's the CEO working on?
How can align around the key divisional things?
That's what this kind of stuff promises.
We've talked about this,
but if you work in a social
kind of contract environment,
how does that impact attainment?
Some really great research:
78% increase in achievement when your goal
is shared with a peer.
Why do you think the Runkeepers
and the Fitbits and all that stuff
publish all that data to Facebook?
It's because it actually drives your behavior,
and it keeps you motivated.
Or you look on Fitbit and you see,
"Wow, I'm only 900 steps away from my target.
I better go out there and walk around
the block a few times, because you know,
if I don't I'm going to get taunted or cheered
by one of my peers.
So creating that kind of environment
is really important.
By the way, in our product we don't taunt because that would be weird in a workplace setting.
We do cheer and nudge, and that seems
to work. That's very effective.
This was some research that showed
how goal attainment differs
with how I express my goals.
The grey bar, the really low bar,
is I didn't even write them down.
I just thought of a goal, and then
I basically didn't do anything.
Or I wrote it down, but I stuck it in my pocket.
I didn't tell anybody.
Then the next thing is I wrote it down
and I shared it on the white, you know,
blackboard, white wall, for everybody to see.
And then, finally, I wrote it down, I shared it,
I'm getting feedback and I'm talking
about it with somebody.
Just making these things social
Recording your progress, similarly,
has a huge impact on performance.
A great example of that is Fitbit users
step 43% more because they track their progress.
Do you guys use any fitness trackers?
OK, about half the group.
Imagine if Fitbit just sent
the users an email at the end of the year
with their step count.
That's basically how corporate America works today.
We'll just send you an email at the end of the year.
Or you actually have to go through
and read all of your emails from the year,
cumulate your own set of steps,
and then put that into your performance review.
Adapting the Game Plan
We've talked about this,
but interestingly, we actually see data
where about 20% to 25% of the goals
for the quarter actually get adjusted
and edited throughout the quarter.
Not the progress being recorded, that's a separate thing,
but the actual goal, or the details of the goal,
or the targets of the goal are adjusted.
We think that's actually a really good sign.
We talked about the aspirational,
but here you can see a scoring example.
Again, you can do it one through ten,
colors, smiley faces.
By the way, I'm going to show you
an example of the goals that we use at my house.
I use this with my family.
We do goal scoring with my family, and we do the happy face, neutral face,
sad face scoring methodology.
This is an energy company example.
Their average progress of the goal,
their actual progress attainment, was 82%.
The way that they scored that was 97%.
When I look at that, that tells me
they had set a stretch goal and they performed
really well to that stretch goal even though
they came in at 82%. The team felt that
that was a great score.
Does that make sense for everybody?
Now we're going to go into
a few goal examples by department,
then I'm going to share some personal
goal stories and then we're going to go to Q&A. We actually have a white paper
for each of these departmental examples
that we're going to make available to you
after the talk so you don't have to write
too much stuff down.
It goes into each of the functional areas of a company:
sales, marketing, engineering, product, support, design.
I just wanted to paint some ideas
for you as you kind of think about this.
In the sales example, and a typical thing
you might hear in sales is like,
"Oh, well, they have goals. They get paid on commissions.
Why do they need to have like their quota as their goal?And why else do they need to have goals?"
Clearly we see the goal is to hit the bookings target
and contribute the bookings; 250k,
that's a key result, and we're going to measure that.
But we also need to do other things like
deliver certain amounts of pipeline growth,
or open up that healthcare vertical,
or deliver three case studies for this new product
that we just implemented and
create some stories around that.
Similarly, a sales representative might have to
not just drive the outputs that
we're trying to deliver, but deliver even more inputs.
Like, "Hey, you know what? Let's get 30 Fortune-1000 meetings
this quarter and so forth. To me it's a balance
of, "What are all the key things
in this department that we need to deliver?"
Obviously you can see some of these would
roll up to the manager.
Maybe some of these are more at
the individual-contributor level.
What's really powerful, by the way,
is if you really do figure out the recipe
for how to scale your machinery
and operate at scale,
you can start to institutionalize this
for any new hire that you bring on.
And it becomes a very quick way
to drive productivity and ramp up productivity.
Goals in Marketing
OK, marketing examples.
Here we could say, for PR for example,
"Drive awareness through PR."
So what does that mean?
As measured by 20 press pieces,
hosting two media dinners, secure the speaking spot
for TED, that seems like a pretty stretch aggressive,
You'd be crushing your goals if you delivered that. Reach out to X number of publications
to cover x, y, and z.
On the product marketing side,
deliver an epic launch.
We want 10,000 first impressions.
We want to finalize the messaging.
We want to create a certain number of case studies.
You might say,
"OK, I get all the quantitative stuff.
It's super measurable. We're doing a good job at that."
But some of this stuff is a little bit more qualitative.
How are we going to measure that? It could be as simple as, say,
"Hey, you know what? Let's exit the quarter
being on track in this area."
It doesn't have to be more explicit than that
if that's the best we can actually say.
On the engineering side,
ship some of these features.
Maybe focus on quality or focus on performance.
There's always something that we can find
that somebody can own in the organization
that is going to drive value.
Maybe squash a certain number of bugs or create more process.
An interesting story at LinkedIn, for example,
they have results-oriented goals.
They also have leverage-oriented goals,
and so your results are like, "I'm going to squash
50 bugs. I'm going to do this. I'm going to do that."
But the leverage is, "What are you doing
to make your job easier for yourself
and for others in the future?
And what are you doing today?"
I'll squash the bugs.
That's my results. But my focus is on
making the process better
so we don't have these bugs.
I'm going to create a solution for that
that's going to help
scale my position going forward.
Product goals, you can see the examples here:
Maybe implement the new onboarding system.
On the technical writer it's,
"How do we consolidate our redundant documentation,
or implement a new style guide, or share and communicate
that with the team, or standardize that across the team?
Some good ones there.
Similarly, on the design side, we see
major interaction, so we need some prototypes.
We want to drive a certain amount of engagement
or usage or MAU, weekly active usage
and then user research.
Maybe we want to start to go
and do customer visits.
Actually, one of our key product goals
across our organization is we do 50 customer visits
for the product team every quarter,
and we want the product team to hear
from the customer in person and share the notes
on the Wiki as to exactly how that process is going. When they actually check in their progress on that goal
they comment a link to the Wiki,
and everybody in the company can see that.
Then the last example is support,
and so here we see making customers' experience
with support more enjoyable.
That could be around hitting some performance targets
like service level agreements and things like that, or personal satisfaction scores,
and then maybe there's a community goal.
We're going to start to activate our community.
We want to publish content.
We want to increase participation,
and we want to start to
identify and develop these evangelists
and key contributors. It doesn't mean that we are
going full metrics at metrics' sake.
It's about saying what's important
and expressing this in a measurable degree
to the degree that it's possible.
Home Run Examples
With the last few minutes here I'll
just cover some personal examples,
and then we'll go to question and answer.
This is a real goal.
I just screenshotted it this morning. This is my sales leader.
The sales leader just joined the company
about three weeks ago, and we have a practice
at our company, we're 50 people now; for everybody that joins the company,
we want them as productive as possible
as quickly as possible. And so it means that
the hiring manager has to do a welcome letter
where we actually go into pretty significant detail
on who the teams are, what people are working on,
who you'll be working with, etc.
Everybody sets up a 30-day, fast-start goal.
It cuts off about halfway through,
but here you can see, "Meet with each of my team members.
Meet with 15 prospects. Meet with three customers.
Make five account introductions.
Review all of the key materials like contracts
and sales materials." There's a few other ones there.
What better way is there to have a new person
ramp up more quickly than to actually know
what's clearly expected, and to give them
those guardrails and a clear path
on being successful? Again, it forces a great conversation
of, "What do I think 'productive' means? How do we get productive? And let's capture that.
A second example, this is my marketing leader, Minka.
This is a goal from last quarter,
and I went in and screenshotted this for two reasons.
One is that here you can see that the goal was to deliver 750 marketing qualified leads,
and you can see some description of what that means.
What's interesting there is I think it's really cool
if other people can see why you have this goal
and the context around this. It's not just, "The target was 750."
Give me some more details.
Help me understand this.
You can see that she put that there.
Second thing that's interesting here is that
you can see a little cloud halfway down the page, in the center,
and that cloud means that it's
powered by Salesforce.
So she's not checking in every lead that she generated.
She just connected it to Salesforce,
and as she makes progress on her leads,
it automatically checks that in for her,
which is kind of cool.
You know, automating that thing.
And then the third thing that's interesting here
is, you can see in the stats on the right,
under the little tree, there's a stats thing
that says "180 views." I moused over that,
and I took a screenshot for you guys on this point,
which is, and it's a really long list,
"180 people" or "180 unique views."
But when you look at the list of people
that were viewing this goal,
it wasn't really the marketing department.
It was engineering, the design team and
Other people cared about how were we doing
on this goal because they realize it's
an important goal for the company.
So I think that's a pretty cool thing,
and you can see by the way she received 23 cheers
to the right of that, which is pretty cool.
It feels good.
Then this is another live goal.
This is Jonathan, is my head of engineering.
He actually was one of the co-founders of Siri,
went over to Apple, came over recently to join us
to lead engineering for us. And if you just look
at his goals, you can see that he's working
on quality. He's working on engineering capacity,
security, and the release schedule.
Also, we measure story points
as one indicator of productivity.
You can see, and by the way,
we actually connect a lot of that stuff with JIRA
to automate the collection
of some of those data points.
Last example, this is my family
or two of my boys.
In this picture they're 12 and 10.
Colin uses, we all use, Better Works at home.
We don't actually have a home edition,
so I bought a special
access to this, and you can see the goals.
Colin's goals are, "Fight less with brother,
only three times per week. Get straight A's. Hit a homer," and "Run on the weekends."
What was cool is that he did hit a home run last season, and as he was running from third to the home plate,
he looked at me and he goes, "I'm checking this in."
The younger brother, the 10-year-old at the time,
one of his goals was "Find a new friend."
And he got to 100% on his goal.
So I thought that was pretty cool.
All right, last slide.
Why are we doing all this?
We talked about the focus
and the attention and what not,
but a lot of the spirit that we have at Better Works
is, "How do we help people get one percent better every day?"
Small improvements, small adjustments
every day, consistently over the long term,
have massive implications on yield, results and productivity.
Here's an example that I think is really profound.
If you get one percent better every day,
just because of the laws of compounding,
you're actually 37 times better than when you started.
Thirty-seven times better after one year.
Compare that to the person that maybe doesn't care
about getting better. In fact, they could maybe get
one percent worse every day.
They're actually .03 compared to the person
that they were at the beginning of the year.
If you compare the two people, the one person
that's getting one percent better versus the person
that's getting one percent worse,
it's actually at 1260 times difference
between the two people.
So it means that you could have,
if you have one person that's focused
on getting one percent better, effectively
1200 of the "other" people.
In start-up world, these companies are so precious.
The results are so meaningful.
Every customer matters. Every input,
every action drives massive consequence.
I think you can see the importance
of being really focused and driving the execution
with the team.
That's the end of the presentation,
Performance Management Vs. Goal Setting
Is anybody working for a company here
that has more than 50 people?
OK, so these are all small companies.
I guess what I would encourage
is to shift away from the thinking that
we do goals for the purposes of performance management.
In which case, maybe, I would bet
that most people here don't have a very formal
It's a very fluid or non-existent process,
and so if you think of goals as performance management,
you probably don't do a lot of goal-setting.
Or you might say, "We might have a couple company goals,
but we're not going to push that
to the individual to really drive personal accountability, alignment and coordination on what
we think is important.
I just wouldn't use performance management
as the lens around how to think about why
we do goal setting.
The reason we do goal setting is to focus on
do we all agree on the work that needs to get done.
Does everybody have three to five things
that they're really on the hook for?
That's really it.
step two is, "Can we align and coordinate these things
so that your goals ultimately support mine?"
Or you're at least supporting some key initiatives
in the company, just so that you're not off
doing your own thing,
working on things that actually don't matter
to the success of the company.
Then I would treat evaluating performance
as a separate thing.
For example, at our company,
the way we do performance feedback
is every hiring manager
will say three cheers and three nudges for the person,
and that's typically independent
of your goal execution.
It could be related to it,
like, "I feel like you could be setting more stretch goals."
But the point is that you're still capturing
some feedback through your three cheers,
three nudges, three pros, three opportunities or
however you want to frame that. I think that that part of it is far less important
than, "Are we coordinated on what work
needs to get done?"
I think you'll naturally find that
the people that are performing,
you're going to know who those people are.
And the people that aren't performing,
you're probably going to have a good sense
for who those people are as well.
Connecting OKRs With Compensation
Everybody has goals, and everybody has
three to five goals. Everybody's driving
Some people may have compensation tied
to some of their goals, and so let's look
at that sales example.
We came up with five goals for the sales person: sell the quota, open the healthcare market,
increase our cross-sale percentage
on this new product and brief 25 executives.
Only one of those goals is actually going to be tied to compensation.
I think that can happen anywhere.
That could happen in whatever system
you want to use for your HR system,
a spreadsheet system, however you want
to kind of track that process.
Interestingly, you can also make a case for
somebody getting compensation
but actually not carrying any goal related
to the compensation.
So here's an example of that.
For my leadership team, we pay bonuses for
exceeding the annual bookings target of the company,
and they don't carry commission on that.
It's just a bonus if we overachieve the bookings plan,
because I think that everybody's involved in that. Product's involved in that. Engineering's involved in that.
The whole company's involved in that.
Only the sales leader in the company
actually carries the booking's number
as a goal in Better Works.
So I think that the nuance here is
everybody should be able to express that.
Some people are separately, and maybe in parallel,
incentivized financially for certain kinds of things,
and in some of the cases, those are directly related
to some of their goals.
In other cases it might be unrelated
to their goals altogether.
I think a mistake would be, "Oh, you know what?
If you do 67% of all of your goals
as a blended average in Better Works,
that pays out this bonus."
That will then go back to reinforcing
the sandbagging concept that I talked about earlier.
So that would be the worst case example.
Are Team Objectives Better?
I would also say, at the same time,
there's a ton of research that supports a lot of
these management by objective
or, "You do these things on a quarterly basis,
and then you get paid these things."
There's actually some interesting research
that says those things don't actually drive
the right kinds of behaviors anyway
because they have to be
structured in such a manner where you're getting
guaranteed payouts. Because otherwise they're
too punitive or they over-emphasize the wrong behaviors,
and so then it's like, "I'll do that at any expense,
There's a ton of examples in that area
where we'll reward people for fixing cars faster,
but then the quality of the repairs plummets.
And then there's all these other quality
and safety issues.
So at our company we don't use MVOs.
We do have some goals that are commissionable, because I think that's an expectation
for the front-office side of the house. Because compensation can be such
a very difficult topic, I actually think
that we just simplify things to say we pay people a base salary.
Equity is the upside for
why people would join a start-up,
and let's just make sure we're really aligned
on the goals, what's important
and how we're going to measure success.
Employee Vs. Management Goals
It's almost like something that I think happens
a little bit organically, and it's almost like
you have to trust the process to
work itself out.
Some of it's going to be top down,
some of it's bottoms up, and it's like
if you've edited a Wiki page.
How is that all going to come together?
People start editing and adjusting,
and then things emerge
and the painting emerges.
I guess what I would say is
it just takes practice. The first time you do it, I wouldn't actually worry
about trying to get every detail. Like, "Oh, the book, page 98, said do it this way."
All we're talking about
is just, "Does everybody know what's important,
and can they express that in a coordinated fashion?"
What you might find is
that this department is really way too ambitious,
and this department is way too conservative.
Let's just go with that. We'll come back in a quarter.
We'll learn from it and get better every quarter.
Google's had 65 attempts at doing this back to back, so they're going to be really good at it.
Versus if this is the first time you've done it.
I think some people are very goal oriented, and this is very natural.
It's like, obviously, "Why wouldn't you do this?"
Goals, metrics, accountability
and performance, and we're getting results.
And we're going to be very coordinated this way.
Some people, I would say, my experience has been,
are more task oriented, and they don't
have a goal muscle, but they're always busy,
and they're staying really busy,
but maybe the bigger picture of why we're working
towards this, what's the compass or the map where we're going.
That's harder for them to kind of express in that way.
So I don't know if that answers your question,
but I guess it's practice makes perfect,
and you'll find
deadlines do a pretty good job
of setting a framework for how we're going
to do this. If you said, "Hey, you know what?
I want all managers in the company
to have all their goals in by Friday,
and we're going to sit down and review them, and talk about them, and have some back and forth," I might say to one of my leaders,
"Hey, you know what? I noticed that you didn't have
security in there as a goal.
You know you still have to have this gut check
of 'wow, does this make sense?'"
Does it make common sense?
Let's make sure we have a security goal in there,
because I want to make sure that every quarter
we're making progress on security.
And then you might say, "Actually,
by this Friday all manager goals are due,
and then by next Wednesday everybody
in the rest of the company needs to have published
That means that every manager
needs to have met with everybody on their team
to talk about, "Well, hey, why did you pick that?" Or maybe once they saw what
the manager's goals were, they could actually
start to build out their goals.
So it has an emergent aspect to it,
but you could be much more top-down
in the beginning if that's how
your bias is.
I think it might be hard to be entirely bottoms-up.
At Google, remember, 40% top-down,
So you definitely have to set
a general trajectory and let the people fill in the details.
If you're going to just say,
figure out what you think is best,"
that could also be very dangerous.
OKR Process for Small Companies
I think it's a hard question for me to answer,
because I think everybody just needs to have
a clear expectation.
So, for example, I wouldn't want to work, personally,
in a place where it's not clear what everybody's working on,
that they can't express the three
to five things that they're focused on,
and that we don't have a common and shared understanding
around how your three to five things,
and my three to five things, result in company success.
The nice thing is, if you have the luxury of being small,
you could probably set out
your goals and OKRs tonight.
You go around the table and, "Bob,
what are you working on? Lisa, what are you working on?
Sarah, what are you working on?
OK guys, that's what we're working on,
and you know what? We're in month two of the quarter.
We've got another month and a half.
We've got six weeks. Let's see how much progress
we can make.
"You know, Bob, I think you're stretching yourself
a little bit on that goal. But if you want to keep
the target where it is, I'm all for that,
and that's going to be a crushing goal
if you can deliver that.
Lisa, I feel like what you're saying
is maybe a little bit on the
I'd like to see you stretch that."
This is called leadership.
It's having courageous conversations around
reaching our potential, stretching ourselves
and setting up conversations
where everybody can feel successful.
OKRs as an Aspirational Framework
Here's maybe an interesting thing
I've learned at Google.
At Google it hasn't been this exact approach
65 times in a row.
They actually took polls of what
we needed for the company "right now,"
and "How do we want to adjust this philosophy?"
Everything that I've talked about
is not a magic wand. It's just the simple framework
for expressing what's important and us all
being coordinated. And you might find, "Hey,
everything is going super well right now operationally,
and what I really, as a leader, want
to encourage is stretch thinking
and thinking bigger.
Like, "What's our TED talk for every department? What would just crushing it look like?"
And I want people to start thinking about that.
We're so buttoned up operationally
that what I really want them to do is start
thinking out three, six months ahead,
nine months ahead, 12 months ahead.
It could also be that, "We're missing our financial results.
Product is always late.
Forget landing on the stars or the moon,
we just need to get out of orbit,
and I want to make sure everybody has a very clear,
crystal clear expectation on what they're going
to get done this quarter so that we're at least
operationally buttoned up."
I think it's part of leadership to
modulate, "Are we more operationally oriented
around goal setting? Are we more innovation goal setting?" And it would be a failure for me to say,
"Oh, you know, just set stretch goals,
and everything's going to be fine,"
if you don't have the foundation of
even meeting basic fundamentals.
That's not necessarily going to deliver success.
By the way, one thing I would say on financial goals
at Google, those are not stretch goals.
They're expected to deliver at 100% of plan.
Pre-Revenue OKR Employment
Framing that is
if you're pre-revenue,
what do you do?
It makes me wish I had pulled out
my goals from Q4 of 2013 when I started the company,
because that would have been a cool thing to show.
We were three or four people,
and we were just starting to explore this area.
I remember explicitly, one of our goals was
in Q4 of 2013. We wanted to talk to 80 companies
to verify our hypothesis that goal setting
and doing goal management as a service
would be a good business idea.
That quarter we talked to 86 companies,
and that was based on two per day, and then once you say,
"OK, we're going to talk to 80 companies."
Then you probably have to figure out,
"How many do I have to contact
in order to get a reasonable number of people
that are actually going to talk to me?"
You probably have to reach out to whatever that is,
three or four hundred companies, and then,
if you're going to reach out to 400 companies,
then you probably have to figure out,
"How am I even going to find those companies?
I'm probably going to have to look for lead sources
on LinkedIn or whatever that might be."
So you can back into all of the work that needs to get done.
I'm going to research 400 companies.
I'm going to reach out to 400 titles
and targets on LinkedIn.
I'm going to convert maybe 25% of those
and have 100 conversations, of which 80
actually might actually happen.
And then we're going to do an assessment on
whether we're going to share
the data on what we learned about those interviews
or those discoveries.
So I would say I don't think a company's ever
too young to explore a way of
It might be as simple as validating your hypothesis.
But I would do it in a data-driven way that is
actually a very measurable and organized way
that everybody agrees with upfront that would ultimately convince them that we're on to something.
Non-Vital Goals Management
I would say the goals are not comprehensive.
They're not everything that you're doing. It's what you are trying to bring extra attention to. I'd ensure that
my people-ops goals, my leader there,
payroll is not one of her goals,
but moving our office and all of the logistics
around moving 50 people is a key goal
for her this quarter.
There's a whole set of things that we're doing
in the culture area which she's a key
stakeholder to drive.
Then our hiring.
We obviously have to add a lot more people this quarter.
So hiring, culture, and some major
office logistics are the key things that are getting
that extra attention.
Small Tasks Add Up Big Time
Yeah, and that's how work feels.
You're spinning the plates.
You're going from conference call to conference call,
meeting to meeting. And I think of goals like
that, a bigger map, that compass where you're headed towards.
You could absolutely have taken a lot of meetings,
done a lot of conference calls,
and feel exhausted at the end of the day.
But did you actually move the business forward
in terms of what we're really working towards?
Only you can be the judge of that
based on your goal progress.
Motivating a Diverse Group
The most important kind of motivator,
I think, is actually this concept of making the goals open
Back to that research of attainment around
public and progress, I think that kind of that concept has the maximum impact on
achievement and attainment.
We do have some privacy settings. You could add privacy to goals if you want to do that,
and there's certain reasons why you might want to do that.
We can look at the average attainment.
Imagine this across 100,000 goals. We can look at attainment, on average,
of public goals versus private and see
fundamental differences between the two
when all other things are equal.
I would say at Badgeville
the incentive was, I don't think,
You were getting
a virtual incentive for delivering
Here I would actually say that
you are still building your reputation
inside the company, and one reason why
I think you're compelled to perform is
you become somebody that
does what they say they're going to do.
They support other people's initiatives
by aligning correctly, and they're
They support their peers.
So I think a lot of the stuff that we're talking about
is just being a good citizen inside the company, and if you give people a framework for
how to express that, like, "Are
they execution-oriented? Do they deliver
on time? Do they support others," etc.
I think it's very natural
for people to want to play
in that kind of that world.
Mining Goal Semantics
We are just starting to do some interesting
analysis in this area, and we're now
starting to build out a data team
mostly coming from the health and fitness world.
It's how we're thinking about it.
The only research that we found is
however active your goal expression is,
it actually does have a relationship with
your ultimate attainment, if it's very passive versus very active.
Even the goal name, the title of your goal,
ultimately impacts attainment.
So that's a fair question.
It's just interesting to see.
Some of the things that we think about
are like, "Well, maybe if somebody expresses
their goal a certain way we should
encourage them to express it a different way,"
and we're going to start testing that as well.
Is everybody ready to do some goals?
Thank you for your time.