Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs

It's a simple concept in theory, with potentially powerful outcomes. But, as Doerr explores in "Measure What Matters," it's not always easy to put it into practice, and it takes a lot of commitment to get it right. It's worth noting that this book isn't a manual on how to develop OKRs, but is proof of how valuable they can be.

Doerr shares his insight into how OKRs changed his own approach to goal setting, and how he's used this in his career to help companies of all kinds, from tech start-ups to global nonprofits. His book is full of first-hand accounts from CEOs and other senior leaders about how they applied the concept of OKRs in their company and the impact it had.

Because of this, it's mostly aimed at people in senior positions. But, in practice, there's something here for everyone. As the various accounts show, it's important for everyone in the business to understand OKRs, and all team members can benefit from applying them in their professional lives.

John Doerr is perfectly placed to advocate for OKRs. He learned about the concept from the former CEO of Intel, Andy Grove, who first came up with the idea.

Doerr witnessed the hugely positive effect OKRs had on Intel at a critical point in its history, and he became a big fan of the concept. In 1999 he met with the founders of Google to discuss how OKRs could push their small start-up to become the powerhouse it is today. Fast-forward a couple of decades and Doerr has worked with multiple organizations to help them embrace OKRs in a similar way.

So, keep listening to discover how OKRs can help prepare your future managers for more responsibility; how they can inspire powerful teamwork; and to find out how Google used OKRs for maximum impact.

The book is divided into 21 chapters across two parts, with a final resources section at the end.

Part One looks at the history of OKRs and Doerr's own experience of the approach, before delving into some examples of how it's been used in practice.

Doerr identifies the four key principles (or "superpowers") of OKRs. These are: focus and commit to priorities; align and connect for teamwork; track for accountability; and stretch for amazing. He dedicates at least one chapter to each superpower, and explores them through the personal accounts of top executives at high-profile companies.

In the second part of the book, Doerr looks more broadly at the new world of work, and how OKRs are helping organizations move away from outdated systems, such as the annual appraisal, toward a more fluid approach to work, feedback and goal setting.

Doerr kicks off the book with a look at the management theories behind the evolution of OKRs, including Peter Drucker's Management by Objectives approach.

We really enjoyed this aspect of the book, how Doerr links OKRs with key management and psychological concepts. For example, he directly relates OKRs with Maslow's classic Hierarchy of Needs pyramid. This shows how OKRs can give people purpose, and equally, how purpose is essential to developing well-defined OKRs.

It neatly ties together the activity and performance of an entire organization, from the top of the hierarchy to the bottom, giving everyone purpose on the way.

Much of the book focuses on how OKRs can help an organization reach its major goals and drive growth, and rightly so. This is the primary purpose of the tool, after all. But OKRs also have the potential to help new or aspiring managers develop critical leadership skills.

Often, managers are given poorly thought-out targets to achieve, with little consideration for the restraints of reality. For example, a manager might be asked to achieve a target of 50 percent sales growth: a wonderful goal, for sure. Yet, challenges such as a lack of time, money and people might mean this goal is impossible to reach in practice.

OKRs work the other way around, by first looking at the reality of the current situation, and forcing people to ask, what can realistically be achieved with what we've got? The OKR approach encourages everyone in the organization to get really specific about what they want to achieve, how it ties into business objectives, and what steps are required to make it happen.

That's not to say that people shouldn't push themselves beyond their comfort zone. In fact, stretch goals (or aspirational goals) are a huge part of OKRs. But even the most aspirational goals have to be grounded in reality.

And this is an essential part of training people to be effective managers. It helps push them to make better, well-defined and thought-out decisions, and to understand the wider implications of their actions. "If I do X, how will that affect Y person or team?"

If this approach is then rolled out across the organization, it ingrains that big-thinking mindset within the culture. As a result, anyone can step into a management or leadership role with a good foundation in what that really entails.

Doerr shares a story from the medical billing service Lumeris, which realized through applying OKRs that many of its new hires weren't in the right roles – or, in some cases, the right company!

This realization led to a complete overhaul of its HR and hiring practices, and its objective-setting approach. In particular, it fully embraced the rule of transparency in OKRs and found that this enabled greater connectedness across the organization.

In this context, transparency means that everyone is expected to display their personal OKRs for all to see, and to pay attention to their colleagues' OKRs. This ensures that each person in the business knows what everyone else is doing and why. The result is better understanding and cooperation within and across teams. You'll know if someone else has the capacity to help you with something, and equally, you may have ideas for how to help someone else with their objectives.

When used in this way, OKRs have the potential to create a real sense of unity across an organization, improving teamwork, communication and collaboration along the way.

To help reinforce this, Lumeris came up with an ingenious idea, which they called "selling your reds." Imagine your department has developed a fantastic objective that has the potential to change your organization big time. Trouble is, you don't currently have the resources or capacity to achieve it. You could either ditch the idea, or keep chipping away at it in a piecemeal fashion, with the hope of making slow progress.

Now imagine that everyone in your organization knows about your great objective. They can offer to chip in and help – freeing you up to work on your big project, or giving you more capacity to achieve it. This is what Lumeris does, and it finds it works wonders.

However, this is only possible with complete transparency, and the acceptance that no one team's OKRs are more important or worthy than any other's. They all have intrinsic value because they push the organization to be the best that it can be. This may sometimes call for "all hands on deck," to make sure that a particularly high-priority objective is completed.

For a lot of organizations, this will come as a huge departure from the norm, where different departments and teams compete for resources for their projects. With OKRs, assuming they are well implemented, there's no need for competition, because everyone is on the same side.

Success stories, like the one from Lumeris, are a great way to showcase the power of OKRs. But most readers of the book will have one pressing question: how do I actually use OKRs?

This is where "Google's playbook," as Doerr calls it, comes in. It's presented as an additional resource at the end of the book, but for a lot of people it will be the key piece of the puzzle in putting this concept into practice.

Doerr is quick to point out that it's not a formula for using OKRs. But it does provide some handy hints and tips for how to get the most out of them.

For example, it defines the difference between committed OKRs, which are those you're certain you can achieve, and aspirational OKRs, which are designed to stretch you. Aspirational OKRs might not be fully completed by the end of an OKR cycle, but at least some progress should have been made.

The playbook also explores some common traps people fall into when devising OKRs, one of which is failing to understand the difference between committed and aspirational objectives.

Other traps include writing overly easy OKRs, picking low-value OKRs that have no real impact on the business, and focusing too much on the objectives while overlooking the key results that are required for success.

Other tips and tricks from the Google playbook include: taking time to come up with robust OKRs; making them clear and concise; using real dates for completion; and avoiding any ambiguity. Your objectives and key results need to be easily scored and assessed by you, your boss, and the business at large.

One simple method described in the book is the "traffic light system." Red means no progress was made, orange means some was made but not as much as expected, and green shows the objective was fully met. Other organizations score success by using a scale from one to 10, with lower numbers showing that less progress was made.

Remember, though, that some objectives, aspirational goals in particular, are not meant to be fully achievable in one go. With aspirational targets, you just want to have made some progress – that is enough to count as a "win." A score of seven, or marking the goal as orange, may be entirely acceptable in this case.

To round off the book, Doerr shares some more useful resources, which include a typical OKR cycle, to help users understand when each phase should be completed. He also offers tips for using OKRs in performance coaching conversations, and suggestions on further reading, for people who want to learn more.

Doer's approach is less directive than you'll find in many leadership or strategy-related books. He spends a lot of time describing how people and organizations came to find out about OKRs and their experiences of putting them into practice. Yet, hardly any time is spent exploring how those success stories can be replicated.

Focusing on the different experiences of these organizations, in itself, isn't a bad thing, and it helps highlight the value of OKRs. After all, if a company as strong as Google uses them with success, it may be an idea worth exploring.

That said, his style might not appeal to everyone. It's clear that the main purpose of the storytelling is to inspire readers. But, depending on your situation, comparing yourself or your company to the likes of Google or Bill Gates could seem a bit far-fetched.

The book also overlooks many other ingredients that contribute to success, such as having a good idea in the first place, and choosing the right team to implement it. There's a risk, then, that readers could finish the book believing that all they need is a decent set of objectives and key results, and voila! They're the next Google. It's unlikely that this is Doerr's intention, but his theory could be interpreted this way.

There's also a fair amount of repetition in the book, as many of the stories cover similar benefits of OKRs. The case studies are all interesting in their own way, but readers who want to learn the nuts and bolts of OKRs may prefer to skip straight to the back, for the resources and Google's playbook.

Another reservation is that the stories are very tech-focused. So, while OKRs are applicable to any kind of organization, people working outside the tech sector might feel a little excluded as they read and wonder, "How does this apply to me?"

Overall, though, "Measure What Matters" is full of tasty food for thought. Readers need to be prepared to pick out the most useful nuggets for their situation. But for those who do, the insights, inspiration and conviction of Doerr and his contributors could help you and your organization reach goals you only dreamed of. And that's no small thing.

"Measure What Matters," by John Doerr, is published by Penguin Random House.

That's the end of this episode of Book Insights. Thanks for listening.