Today, Google is a success story. But before Google/Alphabet took over our world as the gateway to search, the company didn’t have a solid plan for achieving its goal of information domination. Then John Doerr came along. The bestselling author of Measure What Matters helped change the course of Google’s trajectory by building inspiration and accountability into their value-driven goals.
As a venture capitalist and early investor in Google, Doerr had lots of experience with goal setting and accountability. He had worked with Intel in the early days, watched its growth explode, and learned a system for smart growth from Intel co-founder Andy Grove.
This is the same system Google, the Gates Foundation, and others use to achieve consistent results. Even U2s lead singer Bono uses this system as he aspires to achieve his world objectives of debt cancellation and access to HIV drugs for all.
The system goes by the acronym OKR (Objectives and Key Results) but this is not your father’s accountability system. Unlike other accounting and goal systems, OKR marries inspiration with how to measure its impact.
How Objectives and Key Results works
Experts like John Doerr, Felipe Castro, and Christina Wodtke have entire books, TED Talks, webinars and websites devoted to this topic, so this article will be brief. For a deeper dive on the philosophy or implementation, investigate their works. Doerr’s book is particularly good for the philosophy but Castro says that some of his examples can be misleading. But for now, I’ve borrowed freely from their ideas to help explain the O, the KR, and even an A, which is not part of the acronym.
O: Set inspiring objectives
In this goal system, your company sets an inspiring qualitative objective to attain. These objectives are aspirational and will stretch everyone. And most importantly, they are not quantitative. They are not things like 20% growth or getting 2 million users.
Instead, objectives concisely explain your company’s WHY. If you have read Simon Sinek’s Start With Why, objectives should touch on the reason your company exists. And your reason is not just to make profit. All companies do that (or strive to), but why does your company exist when so many others do similar things?
Inspirational objectives can be goals like delight customers or help more people around the world. Google’s objective in 2008 was to make the Internet as fast as flipping through a magazine, and Patagonia’s new objective in 2019 is to save our home planet.
KR: Choose key results that measure impact
Key results are numbers. These numbers measure the impact you are having on your objective. They are not to-do lists or tasks you check off. Results should be quantifiable, measurable, and meaningful. They show HOW you are reaching your inspiring objective in terms of numbers.
If your objective was to create an awesome customer experience, for example, you could measure it in a number of ways. You might use Net Promoter Score (NPS), customer acquisition, repurchase rates, or all three. But be careful with how many things you measure. No objective should have more than five key results or less than two.
A key result is usually stated like you’re making a good habit or SMART goal: it’s specific, timely, and measurable. Key results might look like this.
- Improve NPS from X to Y
- Increased repurchase rate from X to Y
- Grow customer acquisition rate from X to Y.
A: Experiment with activities
Activities determine your WHAT in this system. Sometimes called Initiatives, they are what you, your team, and your company do to achieve your objective(s). Activities can be projects or tasks. Some might be done annually, and some might be quarterly. These activities tend to change as you find the right way to reach your objective.
If you’re trying to create a great customer experience, for example, you might try things like redesigning the customer journey on the website. You might develop a new customer service training program. But the impact of these activities will be shown in your key result numbers above. If the numbers don’t change in the way you want them to (up or down, depending), you’ll need to experiment with new or revised activities.
The OKR system is simple to summarize. The hard work comes in determining your WHY, HOW, and WHAT. And then being consistent in pursuing them and communicating them to your team and company. However, if you do it correctly, you might just have continued success like Google.
Kyle Crocco is the Content Marketing Coordinator at BigSpeak Speakers Bureau, a graduate of UC Santa Barbara, and the lead singer of Duh Professors. He regularly publishes business book reviews and thought articles on Medium, Business 2 Community, and Born 2 Invest.