Measure What Matters

BOOK SUMMARY: Measure What Matters

By John Doerr 02

Abstract

John Doerr is no ordinary venture capitalist. In 1999, he invested $12 million in a start-up with amazing technology and ambitions, but no real business plan… That start-up was Google.

To get Google on track, John introduced a revolutionary approach to goal setting known as OKRs – Objectives and Key Results. John had seen first-hand the power of OKRs when they helped transform Intel in the 1980s.

OKRs have since become integral to Google’s management approach, helping its 70,000 plus employees to be focused, aligned, accountable and constantly reaching forward for the next big thing.

Following in the mighty footsteps of Intel and Google, John has since introduced OKRs to more than 50 companies, helping tech giants and charities alike to smash their goals.

In his book, Measure What Matters, John explains what OKRs are and how to use them. He goes on tell a handful of behind the scenes stories from companies that have been supported and transformed by their use.

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Contents

Abstract ...... 02 Contents ...... 03 What do others say about the book?...... 04 What do others say about OKRs?...... 04 What are OKRs?...... 05 What are Objectives?...... 06 Forget blueberries and broccoli – there are four OKR “superpowers” that you need to know...... 06 How can OKRs help achieve 10x growth?...... 09 Get it right – lessons to learn from those using OKRs...... 10 Some final OKR thoughts...... 12 Introducing Samewave ...... 13 Samewave – the business benefits...... 14

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What do others say about the book?

“I wish I had this book 19 years ago, when we founded Google. Or even before that, when I was only managing myself.” Larry Page, Alphabet CEO and Google co-founder

“A must-read for anyone motivated to improve their organisation.” Former Vice President Al Gore, chairman of the Climate Reality Project

“Measure What Matters shows how any organisation or team can aim high, move fast and excel.” Sheryl Sandberg, Facebook COO and founder of Leanln.org and OptionB.org

What do others say about OKRs?

“OKRs are a superb training tool for executives and managers. They teach you how to manage your business within existing limits.” Alex Garden, co- founder and co-CEO, Zume

“I can’t imagine where we would be without OKRs. The discipline forces us to look back every quarter and hold ourselves accountable, and to look ahead every quarter to imagine how we can better live our values.” Rick Levin, former CEO, Coursera

“OKRs forced us to think clearly and agree on what we could achieve with the resources we had… The OKR traffic lights, the colour coding – they transformed our board meetings. They sharpened our strategy, our execution, our results.” Bono, co-founder, ONE Campaign

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What are OKRs?

Short for Objectives and Key Results, OKRs are a system proven at Intel in the early 80s and credited to the late Andy Grove. Andy is described by Doerr as a “rare hybrid, a supreme technologist and the greatest chief executive of his day”. He had identified that “there are so many people working so hard and achieving so little”.

By setting Objectives and the Key Results that are required to achieve those objectives, OKRs are a simple process that helps drive organisations forward. They’re proven at Google to achieve as much as 10x growth.

Key points you need to know:

• OKRs keep companies on time and on track, especially during times of difficulty or fast growth

• OKRs drive accountability, clarity and perhaps most importantly, unprecedented excellence

• OKRs are open and visible to everyone in an organisation (no hiding or free-riding)

• Setting around three to five OKRs every quarter is usually ideal

OKRs in a nutshell • Focus

• Measure success

• Survive

• Communicate clearly

• Align work

• Continuously improve

• Change culture

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What are Objectives?

Objectives are simply what the company wants to achieve – the direction it wants to take; the where it wants to go. They should be inspirational and most definitely concrete, significant and action based.

A well-framed objective should be supported with around three to five Key Results.

What are Key Results? Key Results (KRs) benchmark and monitor how the objective is achieved.

They are specific, measurable, verifiable, realistic and time-bound. As Grove said: “The key result has to be measurable… Did I do that or did I not do it? Yes? No? No judgements in it.”

By OKR definition, achieving all the KRs must result in the objective being met.

“The key result has to be measurable… Did I do that or did I not do it? Yes? No? No judgements in it.” Andy Grove, former CEO, Intel

Forget blueberries and broccoli – there are four OKR “superpowers” that you need to know

OKRs will do four amazing things:

Superpower 1: OKRs will focus and commit to priorities By setting OKRs, you (and the rest of your team) will be forced to focus.

You’ll find yourselves making hard choices about what really matters – and what you need to do to win.

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In the words of the OKR father himself: “If we try to focus on everything, we focus on nothing.” Larry Page sums up the approach up perfectly. To focus means to “put more wood behind fewer arrows.”

Remind co-founder, Brett Kopf, summarises what it means to focus: “In my view, you can only do one big thing at a time really well, and so you better know what that one thing is… The system helped my personal focus too… Each morning, I’d say to myself, “These are my three buckets, and what am I doing today to move the company forward?”

Superpower 2: OKRs will align and connect for teamwork OKRs ensure everyone is on the same transparent page, working together with top-down alignment and bottom-up engagement.

Aaron Levie, founder and CEO of Box, sums up the reality: “At any given time, some significant percentage of people are working on the wrong things. The challenge is knowing which ones.”

“At any given time, some significant percentage of people are working on the wrong things. The challenge is knowing which ones.” Aaron Levie, founder and CEO, Box

OKRs will save time and money by exposing redundant efforts. This is important. A lack of alignment between employees and the business is the biggest obstacle in strategy execution.

Mike Lee, co-founder and CEO of MyFitnessPal, makes a very valid point: it is all too easy to have different employees charging in different directions. Pushing them harder won’t get you anywhere. “If two nails are even slightly misaligned, a good hammer will splay them sideways.”

When employees and top-line company goals align, magic happens. Duplicated and counterproductive efforts stop. The positive impact of everyone’s work is amplified.

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In Alex Garden’s words: “Team sports don’t work unless the whole team plays together.”

Superpower 3: OKRS will track for accountability Driven by data, there are no grey OKR areas. Just objective grading (known as scoring) with no-judgement accountability. An OKR culture is an accountable culture.

A key theme in the book is that if OKRs are to work, everyone who is using the system must adopt it.

No ifs. No buts.

Doerr explains the best practice of designating one or more OKR shepherds to ensure even the resisters and late adopters (which are inevitable) join the flock. He draws upon Google’s senior vice president, Jonathan Rosenberg’s approach of naming and shaming guilty laggards. In a straight talking email in 2010 Jonathan wrote:

“We have so many great opportunities before us… if you can’t come up with OKRs that get you excited about coming to work every day, then something must be wrong. In fact, if that’s really the case, come see me.”

A weekly OKR check-in will be sufficient for keeping progress on track.

OKRs are adaptable by nature so if changes are needed mid-cycle, ranging from dropping the OKR entirely or modifying it as necessary, then that’s fine. When an OKR is failing, a rescue plan is sensible.

There are no judgements, only learnings. As Patti Stonesifer, former CEO of Gates Foundation, explains: “OKRs allowed us to be ambitious and disciplined at the same time.”

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Superpower 4: OKRs will stretch for amazing Mellody Hobson once said: “The biggest risk of all is not taking one.”

OKRs are designed to push everyone out of their comfort zones – but not to the point of feeling they are unachievable. They’re set to accomplish achievements that are a hybrid between dreams and abilities.

Doerr quotes findings from studies by Edwin Locke, who he describes as the patriarch of structured goal setting: “Although subjects with very hard goals reached their goals far less often than subjects with very easy goals, the former consistently performed at a higher level than the latter.”

The importance of stretch is so great that a guaranteed easy route isn’t permitted.

Some may be tempted to create an easy to achieve set of KRs – a set that’s so easy, they can be certain they’re going to nail it. But this defeats the object of OKRs.

Doerr recalls his time of using OKRs at Intel: “As a rule, we’d enter each quarter knowing we wouldn’t achieve all of them. If a department so much as approached 100%, it was presumed to be setting its sights too low – and there would be hell to pay.”

How can OKRs help achieve 10x growth?

It all starts with goal setting. Not just a mediocre goal – an “exponentially aggressive goal”. A goal that reinvents categories. A goal that rethinks problems and addresses the impossible.

Afterall, as Steven Levy elaborated in Wired, “A 10% improvement means that you’re doing the same thing as everybody else. You probably won’t fail spectacularly, but you are guaranteed to not succeed wildly.”

“If you set a crazy, ambitious goal and you miss it, you’ll still achieve something remarkable,” says Larry Page.

Sundar Pichai recalls from the time when he was Google’s vice president of

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product development how, when launching Google Chrome, “It took courage to write an OKR that might well fail, but there was no other way if we wanted to be great.”

“It took courage to write an OKR that might well fail, but there was no other way if we wanted to be great.” Sundar Pichai, former vice president of product development, Google

According to Time magazine, YouTube CEO, Susan Wojcicki, is the most powerful woman on the internet. She explains how OKRs can not only help you think bigger but prepare for exponential growth:

“Aspirational goals can prompt a reset for the entire organisation. In our case, it inspired infrastructure initiatives throughout YouTube. People started saying, “If we’re going to be that big, maybe we need to redesign our architecture. Maybe we need to redesign our storage.”

OKRs provide a stable yet ambitious platform for aggressive growth.

Get it right – lessons to learn from those using OKRs

Doerr helpfully includes several case studies to illustrate key benefits and considerations in the implementation of OKRs. Some of the valuable lessons from a selection of these case studies are briefly summarised below:

Lessons from Intel – the need to commit At Intel, OKRs became a constant reminder of what the teams needed to be doing. Everyone knew what everyone was – or was not – achieving.

But it took time for the benefits of OKRs to show through. It took as many as five quarterly cycles for the organisation to fully embrace the system, and even longer than that to build what Grove called “mature goal muscle”.

Lessons from Nuna – the need to commit

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In 2015, Nuna co-founder and CEO, Jini Kim, made an initial attempt to implement OKRs. Despite best efforts, she underestimated what it took to introduce and execute them effectively:

1. “You need to build your goal muscle gradually, incrementally. As I know from my own private wellness OKR to run a marathon: Doing too much too soon will definitely end in pain.

2. It may take a quarter or two to overcome your managers’ resistance… to view them… as a practical tool to fulfil your organisation’s top priorities.

3. Until your executives are fully on board, you can’t expect contributors to follow suit.”

Lessons from MyFitnessPal – the need to align MyFitnessPal found the implementation of OKRs harder than expected. “We created company OKRs for people instead of matching people to our OKRs – we had it backward,” explains Mike Lee.

Mike and his team learnt that alignment is about helping people understand what you want them to do. Even well-crafted OKRs will fall short if teams are misaligned and do not understand or recognise the need to work together.

The implementation of OKRs is as important as the process of setting them.

Lessons from Lumeris – the need for culture change Sometimes, an organisation isn’t ready for the transparency and accountability associated with OKRs. For strategic alignment to happen, there first needs to be cultural alignment. And as Lumeris found, before OKRs could do their job, cultural change was needed first.

Lumeris went to great lengths. It replaced 85% of its HR professionals in less than 18 months. It convinced employees one conversation at a time that shared accountability, transparency and collaboration would be rewarded.

“Winning our troops over to OKRs wasn’t easy or instantaneous, far from it. Transparency is scary. Admitting your failures – visibly, publicly, can be terrifying. We had to rewire people…” recalls Andrew Cole, chief HR/ organisational development officer

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Some final OKR thoughts

OKRs are about thinking big. They’re the desire to win. To be great, not good.

Measure What Matters highlights the legendary wisdom of Microsoft’s Bill Gates. As Gates describes, the biggest advantage Microsoft had wasn’t its resources or skills. It was that it aimed higher:

“The likes of IBM and others with far more resources and skills weren’t aiming for a computer on every desk and in every home. They didn’t see it as a possibility.”

While an ambitious mindset is essential, Jim Lally hits the nail on the head:

“You can have all the technical expertise in the world, but you’ll succeed or fail in this business based on whether you team makes their numbers.”

OKRs are founded on the fact that ideas are easy. Execution is everything.

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Introducing Samewave

Samewave is a social performance management app specifically designed to maximise group motivation and output.

Samewave provides:

Clarity Direction Consensus Momentum A single integrated Ultra-clear data Private and group Team members are view of all data. reports, agendas chats for constant reminded to update and to-do lists dialogue between their goals. delivered in an team members. instant.

Connectivity Simplicity Focus Security Instant updates to Simple and intuitive Removes the need With bank grade all your devices. to use. for the majority security and of face-to-face enterprise level management cloud hosting, your meetings. data is safe and secure at all times.

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Samewave – the business benefits

Samewave transforms employee responsibility and as a direct result increases engagement, productivity and focus. It is specifically designed to support promise-based management to increase coordination, collaboration and agility. The business benefits of Samewave can be summarised as follows:

Responsibility and accountability Setting targets, prioritising goals and measuring performance is simpler than ever with Samewave. Everyone receives regular snapshots of the goals assigned to them, while clear reports show how each individual is performing.

There is no question about who is responsible for what. Task-relevant behaviour is an absolute necessity because performance is dependent on each individual’s effort. By maintaining responsibility and accountability, economic and social rewards and sanctions can be easily implemented, allowing individuals to determine a contingency and benefit between working hard and achieving a desirable outcome.

Clarity and focus With Social Discipline at its core, Samewave ensures everyone knows what’s expected of them, and what to expect from others. It even creates some friendly competition. Crystal clear reports and KPI graphics can be instantly created to share information with colleagues, investors, directors, and anyone else who needs information. Importantly, the clarity among a very large, diversified and geographically dispersed group is as high as it is with a small localised group.

Unrivalled management Samewave makes management automatic. Chasing and monitoring colleagues becomes automated. Files, discussions and business activity can be accessed from anywhere, and smart permissions push reports and figures around the business faster than ever before. Samewave makes management of groups and individuals fast, simple and highly effective.

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Impossible to ignore or forget Social Discipline is in Samewave’s genes. Daily reminder alerts of the tasks, targets and projects at hand keep everyone seamlessly on track.

Rich discussions and knowledge sharing Samewave discussions capture and record everything. Smart social features make sure whoever needs to know about it finds out about it. Genius ideas needn’t go to waste or get lost in the email jungle, and there’s no need to hold a time consuming old-fashioned meeting. Samewave makes it easier and reduces the perceived costs of contributing to group performance.

Complete integration Samewave brings together and organises people and data – efficiently and simply. Groups known as “Streams” facilitate project-specific discussions while cloud data storage means projects, files, conversations, reports and goals can be accessed from anywhere with an internet connection. Group performance and output can be maximised with almost no coordination effort.

Easy to use Easy to use software will naturally have a higher take up. Samewave draws its DNA as much from Facebook and Twitter as it does from Microsoft Office. Every pixel has been hand crafted to deliver a simple but powerful user experience. Beautiful design, intuitive data visualisation and extensive community tools all ensure a captivating experience.

Easy to deploy and scale Samewave is cloud-based software so it can be deployed in just 10 minutes – with no need for new hardware or expert IT support. Of course, if help is needed, an award-winning support team and multi-format tutorials are always on hand. What’s more, because the software is delivered over the internet with all data stored in the cloud, it is easy to scale to coincide with growing demands.

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Robust security The application and data is hosted in a secure infrastructure, with optional two factor authentication and strong password rules. Cloud storage additionally means all data can be rigorously backed up for safe keeping.