1 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. www.samewave.com 03 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 www.samewave.com 04 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 www.samewave.com 05 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 www.samewave.com 06 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. www.samewave.com 07 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. www.samewave.com 08 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.” “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.” Jonathan Rosenberg, senior vice president, Google 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.” www.samewave.com 09 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.