Measure What Matters

Ideas are easy. Execution is everything.

We don’t hire smart people to tell them what to do. We hire smart people so they can tell us what to do. —Steve Jobs

Bad companies,” Andy wrote, “are destroyed by crisis. Good companies survive them. Great companies are improved by them.

We must realize—and act on the realization—that if we try to focus on everything, we focus on nothing.

When people have conflicting priorities or unclear, meaningless, or arbitrarily shifting goals, they become frustrated, cynical, and demotivated.

Early on in your career, when you’re an individual contributor, you’re graded on the volume and quality of your work. Then one day, all of a sudden, you’re a manager. Let’s assume you do well and move up to manage more and more people. Now you’re no longer paid for the amount of work you do; you’re paid for the quality of decisions you make.

Leaders must get across the why as well as the what. Their people need more than milestones for motivation. They are thirsting for meaning, to understand how their goals relate to the mission.

Then come the four OKR “superpowers”: focus, align, track, and stretch.

Here are some reflections for closing out an OKR cycle: Did I accomplish all of my objectives? If so, what contributed to my success? If not, what obstacles did I encounter? If I were to rewrite a goal achieved in full, what would I change? What have I learned that might alter my approach to the next cycle’s OKRs?

An effective goal-setting system starts with disciplined thinking at the top, with leaders who invest the time and energy to choose what counts.

But exactly how do you build engagement? A two-year Deloitte study found that no single factor has more impact than “clearly defined goals that are written down and shared freely. . . . Goals create alignment, clarity, and job satisfaction.

As Jim Collins observes in Good to Great, first you need to get “the right people on the bus, the wrong people off the bus, and the right people in the right seats.” Only then do you turn the wheel and step on the gas.

KEY RESULTS benchmark and monitor HOW we get to the objective. Effective KRs are specific and time-bound, aggressive yet realistic. Most of all, they are measurable and verifiable. (As prize pupil Marissa Mayer would say, “It’s not a key result unless it has a number.”)

We do not learn from experience . . . we learn from reflecting on experience.

Contributors are most engaged when they can actually see how their work contributes to the company’s success. Quarter to quarter, day to day, they look for tangible measures of their achievement. Extrinsic rewards—the year-end bonus check—merely validate what they already know. OKRs speak to something more powerful, the intrinsic value of the work itself.

It almost doesn’t matter what you know. It’s what you can do with whatever you know or can acquire and actually accomplish [that] tends to be valued here.” Hence the company’s slogan: “Intel delivers.

If the heart doesn't find a perfect rhyme with the head, then your passion means nothing. The OKR framework cultivates the madness, the chemistry contained inside. It gives us an environment for risk, for trust, where falling is not a fireable offense- you know, a safe place to be yourself. And when you have that sort of structure and environment, and the right people, magic is around the corner.

There are so many people working so hard and achieving so little.

Or as Larry Page would say, winning organizations need to “put more wood behind fewer arrows.

If you set a crazy, ambitious goal and miss it, you’ll still achieve something remarkable.

OKRs are big, not incremental—we don’t expect to hit all of them. (If we do, we’re not setting them aggressively enough.) We grade them with a color scale to measure how well we did: 0.0–0.3 is red 0.4–0.6 is yellow 0.7–1.0 is green

Acute focus, open sharing, exacting measurement, a license to shoot for the moon—these are the hallmarks of modern goal science.

For anyone striving for high performance in the workplace, goals are very necessary things.

Not everything that can be counted counts, and not everything that counts can be counted.

For a service business, nothing is more valuable than engaged employees who feel they can make a difference and want to stay with the organization. Turnover is costly. The best turnover is internal turnover, where people are growing their careers within your enterprise rather than moving someplace else. People aren’t wired to be nomads. They just need to find a place where they feel they can make a real impact.

Stretch goals can be crushing if people don’t believe they’re achievable.

(Wrong decisions can be corrected once results begin to roll in. Nondecisions—or hastily abandoned ones—teach us nothing.)

Encourage a healthy proportion of bottom-up OKRs—roughly half. Smash departmental silos by connecting teams with horizontally shared OKRs. Cross-functional operations enable quick and coordinated decisions, the basis for seizing a competitive advantage. Make all lateral, cross-functional dependencies explicit.