How To Set Your Goals Like Google Using OKRs - Measure What Matters
When scaling businesses I've used lots of frameworks to help align people and track goals and in this video I'm going to look at one specific framework made popular by Google called Objectives and Key Results or OKRs.
I'll give a brief overview of what OKRs are and how they work and then some practical advice on how you can use them to grow your business. At the end of the article I'll also dive into the unique way that I set team goals and the system that I trademarked to do so; so make sure you read on until the end.
The Secret of Success Is Setting Goals
To help understand the importance of setting company-wide objectives let's dive into a bit of business history. In 1954 Peter Drucker, the Father of Modern Management, coined the term “Management by Objectives (MBOs)". While productivity rose markedly at companies where MBOs were embraced, MBOs also have limitations: centrally-planned goals can become stagnant and slow to trickle down through the hierarchy.
In the 1970s Andrew Grove the CEO of chip manufacturer Intel introduced a system of management objectives used throughout Intel to measure progress based on Peter Druckers work. John Doerr, a salesperson working at Intel at the time, later went on to introduce this concept to Google as Objectives and Key Results (OKRs) where they quickly became central to Google's culture. Doerr published a book about the OKR framework titled Measure What Matters in 2017 in which Larry Page, the former CEO of Alphabet and co-founder of Google, credited OKRs within the foreword:
"OKRs have helped lead us to 10× growth, many times over. They’ve helped make our crazily bold mission of 'organizing the world’s information' perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most"
So what the heck are OKRs?
What Are OKRs
As the name implies, OKRs have two components, the Objective and the Key Results:
Objectives are memorable descriptions of what you want to achieve. Objectives should be short, inspirational and engaging. An Objective should motivate and challenge the team.
Key Results are a set of metrics that measure your progress towards the Objective. For each Objective, you should have a set of 2 to 3 Key Results. More than that and no one will remember them.
All Key Results have to be quantitative and measurable. As Marissa Mayer, a former Google Vice President, said:
“If it does not have a number, it is not a Key Result.”
Objectives can be moonshots and should challenge your team. When reflecting back on progress some predictable objectives should have been achieved 100% while more moonshot objectives might only have 60-70% achievement.
At Google, Larry Page expects team members to create products and services that are ten times better than the competition, not just improving on existing systems but reinventing them. Aspirational OKRs are set at 60-70% attainment, meaning that performance is expected to fall short at least 30% of the time. Team members are encouraged to try and fail.
Objectives answer the question: "What will we achieve this quarter?"
Key results collectively answer the question: "How do we know if we have achieved this goal?"
Now we know what OKRs are let's look at how you can set them for your team, but first let's look a little more into why they are so helpful.
Why Use OKRs
The purpose of OKRs is to help you reach your goals when there are large teams involved who need to be aligned to objectives and their progress measured to ensure they are on track. Think of OKRs as a shared steering wheel within the company. Some of the key benefits of using alignment tools like OKRs include:
1. OKRs Focus and commit to priorities
Focusing on a handful of initiatives that can make a real difference and deferring the less important ones allows leaders to commit to those choices and makes for a successful organization. High-performance organizations focus on the work that is important and are just as clear on what doesn’t matter. So when planning your business goals really focus-down on what matters now.
2. OKRs Align and connect for teamwork
OKRs ensure all of your team are working towards the same outcome. Each team and team member should know what they are working on and what they need from other team members to achieve the goal.
3. OKRs Can track for accountability
Put one name next to each goal and track progress towards the goal weekly so there is a single owner responsible for achieving the result. This helps focus individuals and holds teams and people accountable for delivering results to you and your business.
4. OKRs can stretch for amazing results
Ambitious goals demand that you step back and think: "What would it take to reach this goal?" Just like Larry Page said team members should be challenged and missing moonshot key results is expected.
One of the problems with OKRs is that they don't remind people why they are doing something and I'll touch on how I overcame this at the end of the video but first let's look at how to set OKRs and the difference between good and bad OKRs.
How To Set OKRs
As mentioned objectives should be clear, simple and memorable. They should be written in the language of your company and should be focused on the main priorities you have right now. In my article on how to reliably hit your goals I cover the idea of reverse-planning or starting from the end and working backwards. This concept can be used to set objectives where you start with what you want to achieve and then look at the specific steps or key results you need to achieve to get there. When setting OKRs it is important that you only choose a few Objectives to focus on at a time and that each Objective has 2-3 Key Result linked to it. This is again to focus your team.
From the start it is important to have a good understanding of what you are trying to accomplish. Sit down with your team and brainstorm the 2-3 key things you want to achieve over the next 3 months or whatever time period you are working towards. As a leader it is worth drawing up draft OKRs and then letting your team edit and iterate these. This is so that they own the OKRs and deeply understand why they are important to reduce the risk of them not working towards them.
Ask yourself the following questions when setting objectives:
- Does the objective help achieve company goals?
- Is the objective inspiring?
- Does the objective move the company forward?
- Is the objective timebound?
- Is the objective set for the end of the quarter or year?
It is also helpful to look at what objectives shouldn’t be:
- Objectives are not projects with sub tasks
- Objectives should not be easy
John Doerr suggests a simple template for writing OKRs:
We will __( achieve X Objective)__ as measured by __(these Key Results)__.
Setting Key Results
Key Results measure your objective. When setting key results ask yourself whether they are:
- Difficult, but not impossible
Key results should not be:
- Yes or No, they should be numeric and measurable or
- Tasks to be achieved. Key results are metrics.
Examples of Good and Bad OKRs
For example, let's say we want to build out our marketing channels to help you grow your brand.
Let’s set an objective: “We will make our company YouTube channel go viral.”
This is good as it's written in clear language and is simple aligning to your company goals of building an audience. Let's now look at Key Results. Our first key result might be to:
- Generate 100,000 views on our YouTube channel by January
- Get 10,000 new subscribers on YouTube by March
- Get YouTube Average Click-Through rate to >5% by May
Bad key results for this objective would include:
- Make videos for youtube,
- Get more YouTube subscribers
- Improve our video SEO
These are not specific and not measurable and are more like poorly framed tasks they need a numerical goal and preferably a deadline.
When written out, our OKR would look something like this:
Objective: To make our company YouTube channel go viral
- Key Result: Generate 100,000 views on our YouTube channel by January
- Key Result: Get 10,000 new subscribers on YouTube by March
- Key Result: Get YouTube Average Click-Through rate to >5% by May
To illustrate this further let's look at a presentation from Andrew Cedotal:
How To Track OKRs
Before we get to how I use OKRs let's look at how you can track OKRs. There are a number of tools available and most productivity software has the ability to track progress towards your goals. I usually set yearly company-wide OKRs and quarterly team OKRs. A team's OKRs reflect how they will contribute to the yearly company-wide that quarter.
Excel - For solopreneurs
Using an excel spreadsheet is fine. It's cheap and you can set things up quickly. To help get you started I've included a template to a basic OKR tracking excel sheet. You can make an even simpler one by just adding in weekly progress against your goals too.
Notion - For small businesses
With some custom inputs Notion has the ability to track OKRs and assign ownership to teams. It lacks some of the reporting functionality of tools like Asana so it is best if you are just starting out growing a small team rather than for large enterprises.
Asana, Click-Up and Trello - For growing businesses
Productivity and project management tools like Asana usually have goal tracking built in to them. On the upgraded business plan for Asana goals can be set in a specific area. Clickup and Trello also have goal tracking features that link in to teams and tasks. The advantages of these types of software is that key results can be assigned and reporting automated to save time.
OKR-Specific Software - For corporates
There are also a few tools that exist like ally.io and gtmhub that solely focus on OKR tracking. These integrate with other systems like project management and productivity tools as well as sales tools like salesforce and are really geared to large enterprises.
I'd recommend starting off simply first and focusing on the goals themselves and then as your organisation grows trying Notion and some productivity tools and see which you and your team find most user-friendly to ensure your people use the tools.
The Goal Setting System I Use
While OKRs are great for setting objectives and measuring key results they don't take into account company culture or remind employees about how objectives relate to the overall company mission or relate to the work of other teams. The principles behind OKRs are the most important thing: focusing goals, setting measurable metrics which challenge you and ensuring goals cascade own to the team and are owned by named team members.
Flawed goal-setting can lead to disastrous consequences: Wells Fargo’s ruthless one-dimensional focus on sales targets led to branch managers feeling pressured to open millions of fraudulent accounts. The subsequent consumer banking scandal may have damaged the Wells Fargo brand beyond repair. Clearly there was no thought about company culture or values such as honesty or customer-care and because employees were soulessly focused on revenue without understanding a greater mission they honed in on a single goal without consideration of anything else.
For this reason I prefer a more reflective tool that incorporates OKRs but which also encourages employees to map out how what they are working on aligns to the wider company mission and culture. I trademarked the VOS² system for use in my companies, which stands for: Vision, Values, Objectives, Obstacles, Strategy and Specific Metrics where specific metrics are most like OKRs. The VOS² follows all the principles of OKRs we have discussed but also allows for people to reflect back to the company goal and mission and plan out strategy around how they will achieve those goals.