Friday, August 24, 2018

Measure What Matters - John Doerr

I absolutely loved this book that Rajesh gave me to read when I was in Bangalore last week. Every single time I visit them, he gives me a book that profoundly changes the way I  think. Mindset, Triggers, Habit to name some. I dabbled with my own idea of 10x performances (having experienced four cases at various times in life) - and from what I read in the book it looks like I was on track generally.

The tagline of 'Measure What Matters' says it all 'The Simple Idea that Drives 10x Growth'. This book is a 10x idea and John Doerr gives us the nuts of bolts of how to apply the principles of setting Objectives and Key Results to achieve 10x growth. John is a legendary VC who invested in Google when it was a startup. He gave a 10x presentation about OKRs to the 40 strong Google team at Menlo Park then, and watched it grow into the 700 bn and 70000 employee company it is today. Of course, he has stories of how he helped the Gates Foundation, Bono and several others to achieve 10x results. He is passionate about taking this idea to the entire world. I fully support him in this noble endeavor and have privately enrolled myself to do the same.

10x Goal Setting

  • Some insights to 10x goal setting -
  • Hard goals are better than easy goals
  • Specific hard goals produce higher levels of output than vaguely worded ones
  • Good goals engage, while poor goals disengage. (Statistics show that less than a 3rd are involved and more than 50% of those who are disengaged leave for a little as a 20% hike.)
  • Doerr stresses that to build engagement, goals are a must, because they create alignment, provide clarity and job satisfaction.

Ideas are easy, execution is everything
"Ideas are easy, but execution is everything," says Doerr. It is not what you know, but what you can do with what you know that is important. Knowledge is secondary to execution. 10x results are all about execution. So your results are a matter of execution, not knowledge.

Whether it is Steven Covey talking of first things first, urgent and important, or Ivy Lee stressing on 6 important things to do, the idea is to prioritize what is important and be at it with complete focus until it is done. It is incredible how easily the mind wanders off from doing what it important.

OKRs belong to the same mould. Find out what is most important, commit to it publicly, be open to measure progress and voila - a lot gets done.

O - stands for Objectives and KRs - for Key Results. While Objectives provide direction, Key results allow us to measure quantity and quality of progress. Doerr's list of companies that used OKRs successfully is phenomenal with Google being the brightest student of them all so there is enough proof that is presented in the book.

OKRs - Objectives and Key Results
OKRs are a collaborative goal setting tool, a methodology that ensures that the company focuses efforts on the same important issues throughout the organisation.

The Practice
The four parts of OKR practice are

  • Focus and Commit to Priorities (be clear about what you want, what you don't want)
  • Align and Connect for Team Work (open shared link OS throughout the company)
  • Track for Accountability (Data check-in, grading, non-judgment)
  • Stretch for Awesome (Big Hairy Audacious Goals BHAGs)

Setting Objectives
Write 5-6 clear objectives per cycle based on what's MOST important. An Objective is the WHAT to achieve, a significant concrete action that provides direction. A well-framed Objective is inspirational and covers far horizons.

Top line objectives should be significant enough to grab the team in its gut. These Objectives are not incremental - they are significantly big and change the way you do things! Focus on the ones that provide greater leverage.

Each Objective should have 3-4 Key Results.

Writing Key Results
KRs benchmark HOW to achieve the Objective. They are specific, time-bound and aggressive - it is not a KR unless it has a number. KRs are about execution, metric driven, succinct, specific, measurable. KRs allow us to measure quantity and quality of progress.

Completion of all key results must result in attainment of the Objective else they are not KRs. 3-5 KRs for each Objective - eg. revenue, growth, quality, safety, market share, customer engagement etc

Commit Publicly to Team
Put everyone's Objective and Key result out where everyone can see (make public your OKRs), share with your team. With OKRs - everyone can see everyone's goals. Priorities are spelled out and one can rely on OKRs to communicate clearly and get the most important work done.

Assess and Measure Progress
Realign. Every once in a while check on progress with the team. OKRs, Doerr says, promote a disregard for self-interest, a deep allegiance to the team, ruthless and intellectual honesty.

While measuring OKRs - 70% achievement is good (100% is bad - indicates a lack of stretch). Doerr warns - stress on output to increase productivity, not increase in activity. Impact, not mere activity.

OKR's differ from Management by Objectives (MBO) in the following ways. MBO - is about 'what', are annual private affairs done in silos, are top-down, tied to salary and make employees risk averse. OKRs - are about 'what' and 'how', are quarterly and monthly, are public and transparent, can be bottom-up or sideways (50%), mostly not tied to salary, are aggressive and aspirational. OKRs are an improvement over MBOs.

OKR Implementation Principles

  • Less is more - 3-5 Objectives per cycle (makes you aware of what to say yes to and what to say no to), 5 or fewer KRs for each Objective
  • Set goals from bottom up (not less than 50%)
  • No dictating goals - OKRs are a cooperative social contract
  • Stay flexible - modify/discard objectives if they do not work
  • Dare to fail - go beyond grasp, stretch goals
  • Tool, not weapon - the OKRs are meant to pace a person
  • Be patient and be resolute

The Intel Case Study
Intel was fighting to retain market leadership against Motorola and launched Operation Crush - regain Market Leadership. The specific Objective was 2000 design wins of 8086 in devices, which was a stiff target, seemingly impossible. The rules - same product - 10x results. To achieve 10x results with the same results, Intel altered the terms of engagement - sold to CEOs instead of IT personnel, went long term benefit route and played on the company's strengths. Intel brought everyone on board in the program - 100 people at top 2 levels first and then 3rd level in 24 groups

Simply put - set a big goal and find ways to achieve it. Don't go incremental - go significantly big so that you are forced to alter your model.

Focus and Commit to Priorities
To focus and prioritise, ask these questions -

  • What is most important for the next 3-6 months?
  • Where should we concentrate our efforts?

Get honest about what is important and where your priorities lie. Then cut out all other distractions and focus on it.
For organization's, it is imperative that the senior leadership begin this exercise by brainstorming top-line OKRs for company for the quarter and for the year. OKRs will not work unless there is a public commitment by leadership in word and deed. When leaders role model the behavior and urgency, others follow. When OKRs flow down from the top, everyone knows what the top priorities for the company are.

So first set company wide OKRs for the year and the quarter, and communicate the same to everyone two weeks before the quarter.
Based on company OKRs, teams develop their own OKRs and share them at meetings, at the start of the quarter.
One week after team OKRs are communicated, individuals share their own OKRs, with their managers, on one-to-one meetings.
Care must also be taken to pair key results like quantity and quality in goal setting, else employees could sacrifice quality for quantity!

Start with the leadership team which practices it
Make it a two-way evaluation
Sharper focus, clearer priorities
Measure performance against goal
Give feedback early, give enough time to correct.

The Remind Case - One thing at a time
The promoter, Brett, found studying long hours and school projects difficult and realised that when a sympathetic teacher and his mother teamed up to remind him of when to do his projects and assignments, his grades shot up. He built Remind, based on that principle to help teachers reach out and remind students. Realising that time management is key to success at college, Brett developed his model after meeting with 200 teachers. Brett and his brother built the company successfully by focusing on the essential and cutting out the inessential. The important Silicon Valley lessons - Solve a problem, Build a simple product, Talk to your users! And for success - go OKR of course.

Align and Connect for Teamwork
Having a great objective and key results is good and but what really drives the execution forward is alignment in the team and public commitment. everyone should know what the company's priorities are. Doerr cites a survey of 11000 senior executives of which the majority did not know the company's top priorities, and only half could name one - that's how aligned companies are. A lovely quote - "When you are tired of saying it, people are starting to hear it."

Making OKRs public and accountable
Everyone can look up everyone's OKR - right from the CEO's.
Critique and corrections are out in the public as anyone can comment or correct.
Alignment - it allows anyone in the organisation to see what anyone else is having as their priority objective and realign the same if it is not aligned to their work.

To Set OKRs Within the Team
The manager sits with his report. The sub or the report decides his OKRs - 50% of the OKRs should come from the sub (not dictated by the manager), the other 50% can come in consultation with the sub. This process of letting the sub or the report set his own OKRs (at least 50%) improves employee engagement because the goals are set by each individual herself. Doerr says that high-performance teams thrive on creative tension between top down and bottom up goal setting.

Another way is to cascade OKRs - the KRs of the manager become Objectives of his team that is responsible for that KR.

Lateral, Cross-functional, Peer-to-peer, team-to-team
Unacknowledged dependencies reveal themselves through lateral cross-functional connectivity, peer to peer and team to team connectivity that this system allows. Connected companies are quicker companies with their freewheeling coordination

20% Offline OKRs
While OKRs at an individual level are great to get work done efficiently, Doerr throws up the idea of 20% offline OKRs that Google advocates. Employees can go after an offline OKR on their own, across cross-functional teams, and work on projects that inspire them, in addition to their main work. This 20% offline OKR allows employees to engage in their interests and pursue innovative ideas. Innovation dwells at the edges - says Doerr. Beautiful. This allows them space to go for a moon shot.

The My Fitnesspal Case
The team's insights when they used the OKRs - OKRs help to make cross team dependency explicit. Every OKR has a single owner. They pinned OKRs to deadlines - not revenue or users.
The Intuit Story
Intuit set up a company-wide goal setting system. Their managers met every month with subs to discuss goals. The OKRs were opened to departments horizontally across teams

Track for Accountability
OKRs can be tracked, revised and adapted. They are livingDoerr. A good platform makes everyone's goals visible, drives engagement, promotes internal networking. This helps contributor engagement. Contributors are most engaged, when they see how their work ties in with organisational goals. The days that people make progress are the days they feel most motivated and engaged says Doerr. It's important to acknowledge that they made progress.

For best results - Scrutinise OKRs several times by contributors and managers, report progress, identify obstacles and refine KRs. Do not ever forget to reflect - Learning from direct experience can be more effective if coupled with reflection.
(A goal study - 43% more achievement was reported when goals were recorded and weekly reports sent to a friend.)

Scoring and measuring
0.7 - 1.0 (delivered)
0.4 - 0.6 (progress, but fell short)
0.0-0.3 (failed to make progress)
Self-assessment cycle - OKR - Progress - Score - Self-assess

Stretch for Amazing
When we stretch for amazing we unearth fresh capacity, find creative solutions and revolutionise business models. Stretch goals sharpen an entrepreneurial culture or a culture of ownership. Doerr says that stretched workers are more productive and engaged and motivated. But here's an important cue - only a transparent, collaborative, aligned and connected orgsanisation can achieve stretch goals.

Stretch work is facilitated by Big Hairy Ambitious Goals (BHAG). A BHAG captures the imagination and grabs people in the gut. Harder the goal, higher the performance - the performance can only be as good as the problem it solves.

Committed and Aspirational Goals
I liked this idea of setting two types of goals - committed goals and aspirational goals .
Committed goals are those where 100% achievement is required in a given time frame. It is tied to company metric at the company level, department level and sales. These are must-achieve goals and need 100% achievement.
Aspirational goals are big picture, high risk, future tilting ideas which one must take a good shot at. For pride. These are good if even 70% achieved.

Characteristics of 10x Goals
At the start, not a single goal appears possible
They throw up hard questions
Radical high-risk routes are taken
Makes one think of stop-doing-what-actions
Makes one feel uncomfortably excited
A healthy disregard for the impossible

Google Chrome Case - Sundar Pichai 
The first Objective Pichai set - Aimed for 50 mn and achieved 38 mn users - failed.
They reset the Objective again - Set a 100 mn users target and settled at 111 mn.
Decided to reinvent the process to find a solution.
Broadened distribution deals with OEMs
Did a ChromeFest marketing campaign for the US
Developed Chrome for OSX and Linux and not just Windows
Sent passive alerts for former Chrome users who were dormant

Clearly when the goal was a stretch goal they had to do things they normally did not do. They found ways to achieve it.

The YouTube Story
As against company rule of "make it fast" YouTube strategically made watch time the core metric. This was antithetical to the normal metric of views. It was the big rock, the priority, the most important thing to focus on.

The Big Rocks story - If you had rocks, pebbles and sand what would you put first in a jar? If you do the small thing first you will have no space for the big ones i.e. if you put sand in first you cannot put the rocks in. So put the big rocks (do the big and important jobs first) and then put pebbles and then put sand. Most optimal.

YouTube had an OKR of 1 bn hours of watch time per day - a 4-year OKR. While this looked big, the leaders set it in context saying that 1 bn hours of watch time is still only 20% of total TV watching time. (On the way YouTube decided to grow responsibly and realised people liked better content.)

Anticipating the 1 bn user mark Susan went ahead and reserved bandwidth, sought infrastructure and went after new users. They cracked the seemingly impossible 10x objective that some said would break the internet.

CFR - Conversations, Feedback and Recognition
Doerr recommends Continuous Performance Management as opposed to year-end appraisal systems by which time it is too late to correct. He advocates having ongoing conversations that are informal right from the goal planning to progress and feedback stage. The CFR model - Conversations, Feedback, Recognition increases employee engagement and course corrects on an ongoing basis. Conversations help alignment and transparency. Have monthly one-on-ones on an informal basis, six monthly professional development conversations.

To evaluate contributors consider this mix
30% or less from OKR
Feedback from cross-functional teams
Context of work

Doerr cites a study where it was found that 90 minutes of conversation between manager and report improves quality of work by the report for two weeks.

Have conversations about -
Goal setting and reflection - What OKRs do you plan to focus on to drive the greatest value for your role, team and company? Which of these OKRs aligns to key initiatives in the organisation?

On-going Progress Update - How are your OKRs coming along? What critical capabilities do you need to be successful? What is stopping you from achieving your objectives? What needs to be adjusted, added, eliminated in light of shifting priorities?

Two-way coaching - Manager prepares on - What behaviors do I want my report to continue to exhibit? What behaviors should report stop exhibiting? What coaching can I provide to help report realise potential? Ask - What part of the job excites you? What aspect of your role would you like to change? What are you getting from me that you find helpful? What is impeding your ability to be effective? How could I help you be more successful?

Career growth - What skills would you like to develop to improve in your current role? In what areas do you want to grow to achieve your career goals? What skills would you like to develop for your future role? From a learning, growth standpoint, how can the company help you?

Conduct a lightweight performance review.

Give specific, positive feedback
Questions to ask - What do you need from me to be successful" What do I need from you?

Recognition (and Recognition Culture)
Doerr advocates creating a Recognition Culture in the company where everyone recognises the good in others work. A simple thank you improves performance by 31%!

Develop a recognition culture by introducing
  • Peer to peer recognition 
  • Clear criteria - values, goals, achievement 
  • Share stories 
  • Frequent and attainable recognition 
  • Tie recognition to company goals and strategies 
To inspire, motivate and value contributors, have quarterly goals and expectations, promote a culture of regular feedback and discuss career development.

To cultivate a Peak Performance culture build collaboration and accountability in the team says Doerr. A highly motivated culture normally has catalysts (actions that support work) and nourishers (acts of inter-personal support).

The Lumeris Case
The organisation first decided to change the company culture before bringing in OKRs. They sacked the old school managers, then made executive team accountable, changed 85% HR team and strengthened middle management. That indicates they were serious about 10x growth.

In Conclusion
The OKR culture of setting a significant goal that catches everyone's imagination, setting a time frame, identifying key results that are specific, measurable and time-bound, making OKRs public so everyone knows what each other's objectives are, align everyone, track for accountability, measure progress and stretch for amazing - promises 10x results.

My 10x Experiences
I had a few such experiences and thus believe in the 10x idea fully.
  • In a cricket match in 1986, I set myself an OKR of scoring 128 (the number of runs I gave away as a bowler) and ended up scoring 158 against my average of less than 10 - a 10x performance 
  • In the hazy world of academia in the Engineering College, I faced a situation where I had to clear 18 exams at one go, or drop a year, as against my previous record of having cleared 1 exam (thanks to my playing first-class cricket that season). The Objective was to clear 16 of the 18 in one month (of which 12 were mandatory). I and cleared all 18 at one go 
  • While at the bank I set myself an aspirational objective of achieving Rs. 50 crore (500 mn) in terms of loan sanctions as opposed to a target of Rs. 5 crores (50 mn). I also decided that I would target top line companies and bring 20 such into our fold in one year. At the end of two years, I achieved 150 crores in loan sanctions and added 18 top line companies to our portfolio. 
  • While at the bank I set myself an Objective of taking a Rs. 2 crores (20 mn) performance result to Rs. 8 crores (80 mn) in deposit mobilization in 2 months. We ended the six month period with deposits of Rs. 16 crore (Rs. 160 mn), Rs. 18 crore (Rs. 180 mn) and Rs. Rs, 24 crores (Rs. 240 mn) in three subsequent issues. 
  • As a writer, I had set myself a vague target of one published novel with no clear time frame. Now fifteen years later I have four. With OKRs I think I should do better than in the forthcoming years. 

I can clearly see that despite my lack of understanding and structure, I intuitively did the right thing even three decades ago. When we choose our priorities and go after them with focus, the rest falls in place. It is purely champion mindset stuff with clear objectives and processes to achieve the same.

By using the CFR method and having frequent conversations about progress, giving specific and positive feedback and using simple tools of recognition, organizations can develop a 10x culture by being fully aligned and transparent.

OKRs are a brilliant tool. Combined with CFR, it brings amazing results. I propose to take this tool of John Doerr and all others before him forward, with my own personal examples - and help people achieve as many 10x results as possible. While doing this, I would like to create another 10x example for myself. For more information from John Doerr himself, log on to

No comments: