Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs
Tags: #business #management #leadership #goal setting #productivity #culture #technology #nonprofit
Authors: John Doerr
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Overview
In “Measure What Matters”, I, John Doerr, make the case for a goal-setting system called Objectives and Key Results (OKRs) as a powerful tool for achieving audacious goals and driving operational excellence. Based on my experience at Intel and as a venture capitalist at Kleiner Perkins, where I introduced OKRs to companies like Google, I distill the system’s essential principles and demonstrate its impact across a wide range of organizations, from tech giants to non-profits, from startups to global institutions. I explain how OKRs work, breaking down the process of setting ambitious Objectives and defining measurable Key Results, and I highlight the four “superpowers” that make OKRs so effective: Focus, Alignment, Tracking, and Stretching. I provide practical guidance on how to implement OKRs effectively, sharing insights and best practices gleaned from the successes (and failures) of companies like Google, YouTube, Intel, MyFitnessPal, Intuit, and the Gates Foundation. The book also explores the complementary system of CFRs – Conversations, Feedback, and Recognition – showing how ongoing dialogue, continuous feedback, and frequent recognition can amplify the power of OKRs and create a more engaged and fulfilling workplace. Beyond their practical applications, OKRs and CFRs have profound implications for shaping organizational culture and driving positive change. The book is aimed at anyone who aspires to achieve ambitious goals, whether they are leading a team, building a company, or pursuing personal aspirations. It’s relevant to the current landscape of rapid technological change and constant disruption, offering a roadmap for navigating uncertainty and achieving breakthrough results in the face of complexity. I believe that by focusing on what matters most, tracking progress, and continually striving for improvement, we can unlock our collective potential and create a better future.
Book Outline
1. Google, Meet OKRs
This chapter tells the story of how I introduced the concept of Objectives and Key Results (OKRs), a goal-setting system I learned at Intel, to the founders of Google in 1999. I explain the basic framework of OKRs: Objectives define WHAT needs to be achieved, while Key Results outline measurable milestones that demonstrate HOW to achieve the Objective. At the time, Google was a young company with a bold mission: “organize the world’s information and make it universally accessible and useful.” I believed OKRs could provide the focus and discipline they needed to turn their ambitious vision into reality.
Key concept: OKRs: A management methodology that helps to ensure that the company focuses efforts on the same important issues throughout the organization.
An OBJECTIVE is simply WHAT is to be achieved.
KEY RESULTS benchmark and monitor HOW we get to the objective.
2. The Father of OKRs
This chapter focuses on Andy Grove, the former CEO of Intel, who is considered the “father” of OKRs. I discuss how Grove instilled a culture of “achievement orientation” at Intel, valuing results over expertise. I detail how his approach to goal-setting, which he called “iMBOs” (Intel Management by Objectives), differed from traditional Management by Objectives (MBOs). He emphasized shorter goal cycles, transparency, and ambitious targets. I argue that Grove’s system, which I call OKRs, provided the framework for Intel’s remarkable success.
Key concept: Ideas are easy. Execution is everything.
This became my mantra after seeing too many startups struggle with growth and scale. It highlights the crucial importance of effective execution.
3. Operation Crush: An Intel Story
In this chapter, I recount the story of “Operation Crush,” a critical campaign Intel launched to regain market dominance in the microprocessor market. Operation Crush serves as a case study for how OKRs can align a large organization around a single, ambitious goal. I detail how Intel, under Andy Grove’s leadership, used OKRs to focus their efforts, coordinate across departments, track progress, and ultimately achieve a resounding victory.
Key concept: “as measured by” (a.m.b.)
Bill Davidow introduced this phrase to clearly link Objectives with their Key Results, making the implicit explicit.
4. Superpower #1: Focus and Commit to Priorities
This chapter delves into the first OKR “superpower”: Focus and Commitment to Priorities. I argue that OKRs help leaders and organizations to identify what truly matters and to commit to those priorities. This involves making tough choices, setting clear objectives, and meticulously defining measurable key results. I introduce the concept of “pairing key results” where qualitative and quantitative goals are used in tandem to ensure balanced progress.
Key concept: Superpower #1 - Focus and Commit to Priorities
OKRs help us choose what matters most by forcing us to define a limited number of Objectives and their corresponding Key Results.
5. Focus: The Remind Story
This chapter presents the story of Remind, a communication platform for schools. It highlights how founder Brett Kopf used OKRs to maintain focus and overcome his own learning challenges (ADHD and dyslexia) while building a successful company that is improving communication between teachers, students, and parents.
Key concept: For individuals, as I found out for myself at Intel, selective goal setting is the first line of defense against getting overextended.
6. Commit: The Nuna Story
This chapter showcases Nuna, a health-care data platform. I share the story of Nuna’s CEO, Jini Kim, whose personal mission to improve healthcare was inspired by her brother’s struggles with autism. I discuss how Nuna initially faltered with OKRs, but ultimately embraced the system after realizing that commitment must begin with leadership. By demonstrating their own commitment to the process, Jini and her team successfully used OKRs to scale Nuna and secure a major Medicaid contract.
Key concept: To inspire true commitment, leaders must practice what they teach. They must model the behavior they expect of others.
7. Superpower #2: Align and Connect for Teamwork
This chapter explores the second OKR superpower: Align and Connect for Teamwork. I argue that OKRs, when implemented with transparency, foster alignment by enabling everyone in the organization to see how their work contributes to shared goals. This can dramatically improve communication, break down silos, and unlock collaborative potential.
Key concept: Superpower #2 - Align and Connect for Teamwork
When everyone’s goals – from the CEO down – are openly shared, individuals can link their objectives to the company’s game plan, creating both top-down and bottom-up alignment.
8. Align: The MyFitnessPal Story
This chapter tells the story of MyFitnessPal, the popular health and fitness app. It highlights how founders Mike and Albert Lee used OKRs to navigate the challenges of hypergrowth and align their rapidly expanding team. I detail how MyFitnessPal learned to clarify roles and responsibilities, identify cross-team dependencies, and course-correct as priorities shifted. Their story shows how OKRs can help companies maintain alignment even amidst rapid change and expansion.
Key concept: Alignment doesn’t mean redundancy. At MyFitnessPal, every OKR has a single owner, with other teams linking up as needed. As I see it, co-ownership weakens accountability.
9. Connect: The Intuit Story
This chapter features Intuit, the company behind TurboTax and QuickBooks. It highlights how Intuit has used OKR transparency to foster a culture of open communication and connectedness. I share the story of Atticus Tysen, Intuit’s CIO, who implemented OKRs across his entire IT department. I argue that OKRs help Intuit navigate the turbulent waters of technological disruption and ensure that everyone in the organization understands shared priorities and how they can contribute to company success.
Key concept: People can’t connect with what they cannot see; networks cannot blossom in silos.
10. Superpower #3: Track for Accountability
This chapter discusses the third superpower of OKRs: Track for Accountability. I highlight how OKRs, unlike traditional goal-setting systems, are designed for continuous tracking and reassessment. This ensures that goals stay relevant, teams stay on track, and leaders can quickly identify and address problems. I explain the importance of objective grading (using a simple color-coded system), frequent check-ins, and a culture of ‘no-judgment accountability.’
Key concept: Superpower #3 - Track for Accountability
OKRs are animated by periodic check-ins, objective grading, and continuous reassessment – all in a spirit of no-judgment accountability.
11. Track: The Gates Foundation Story
This chapter details how the Bill & Melinda Gates Foundation has used OKRs to track progress toward its ambitious goals of improving global health and combating poverty. I share insights from Bill and Melinda Gates and former CEO Patty Stonesifer on how OKRs enabled the Foundation to prioritize effectively, allocate capital responsibly, and measure their impact. I argue that OKRs provide a crucial framework for accountability and data-driven decision-making, particularly for large organizations with complex goals.
Key concept: OKRs allowed us to be ambitious and disciplined at the same time.
12. Superpower #4: Stretch for Amazing
This chapter explores the fourth superpower of OKRs: Stretch for Amazing. I argue that OKRs can unlock extraordinary results by encouraging ambitious goal setting. Stretch goals push teams beyond their comfort zones and often lead to innovative solutions. I draw on examples from Google, Intel, and other organizations to demonstrate how stretch OKRs can drive breakthrough performance. I also caution that stretch goals must be chosen wisely and balanced with operational realities. I discuss the importance of establishing a culture that embraces risk and celebrates both successes and “good fails.
Key concept: Superpower #4 - Stretch for Amazing
OKRs motivate us to excel by doing more than we thought possible. By testing our limits and affording the freedom to fail, they release our most creative, ambitious selves.
13. Stretch: The Google Chrome Story
This chapter details how Google’s Chrome browser achieved market dominance through the strategic use of stretch OKRs. I share insights from Sundar Pichai, Google’s CEO, who led the development and launch of Chrome during his tenure as VP of Product Development. I detail how the Chrome team used OKRs to set ambitious goals, navigate challenges, and overcome setbacks. I emphasize the importance of aligning objectives with the company’s long-term vision, fostering a culture of innovation, and continuously reassessing and adapting goals as circumstances dictate.
Key concept: The relative weighting of these two baskets [committed and aspirational OKRs] is a cultural question. It will vary from one organization to the next, and from quarter to quarter.
14. Stretch: The YouTube Story
This chapter recounts the story of YouTube’s explosive growth under Susan Wojcicki’s leadership. I detail how YouTube set a monumental stretch goal of reaching a billion hours of daily watch time — a tenfold increase — within four years. I explain how the company used OKRs to focus its efforts, measure progress, and overcome challenges. I highlight the importance of choosing the right metrics for success, aligning goals with the company’s values, and cultivating a culture that embraces ambition and accountability.
Key concept: Big Rocks Theory
Say you have some rocks, a bunch of pebbles, and some sand, and your goal is to fit as much of everything as you can into a wide-mouth, one-gallon jar. If you start with the sand, and then the pebbles, the jar will run out of room for all the rocks. But when you start with the rocks, add the pebbles, and save the sand for last, the sand fills the spaces between the rocks—everything fits. In other words, the most important things need to get done first or they won’t get done at all.
15. Continuous Performance Management: OKRs and CFRs
This chapter introduces the concept of Continuous Performance Management (CPM) as a modern alternative to traditional annual performance reviews. I argue that OKRs, when paired with ongoing Conversations, continuous Feedback, and frequent Recognition (CFRs), create a powerful system for motivating employees, driving performance, and fostering personal growth. I discuss how CFRs provide the human voice for OKRs, transforming a data-driven process into a dynamic and engaging system for workplace communication.
Key concept: CFRs (Conversations, Feedback, Recognition)
16. Ditching Annual Performance Reviews: The Adobe Story
This chapter showcases Adobe’s transition from traditional performance reviews to a system of Continuous Performance Management called “Check-in.” I detail how Adobe, under the leadership of Donna Morris, abolished annual reviews and stack rankings in favor of regular check-in conversations and ongoing feedback. I discuss the benefits of decoupling compensation from goal-setting, emphasizing the importance of intrinsic motivation and personal growth.
Key concept: Check-In
Adobe’s new approach to continuous performance management, focused on regular feedback and dialogue, rather than annual reviews.
17. Baking Better Every Day: The Zume Pizza Story
This chapter explores how Zume Pizza, a robotics company revolutionizing the food industry, leverages OKRs to manage its complex and fast-growing operations. I detail how Zume’s founders, Julia Collins and Alex Garden, used OKRs to align their team, clarify priorities, improve communication, and achieve remarkable results in a short period. I highlight how OKRs can be used as a training tool for executives and managers, helping them develop better decision-making skills and become more effective leaders.
Key concept: Baking on the way
Zume’s key technology, where robots automate pizza-making tasks and pizzas are baked en route to the customer in delivery trucks, allowing for incredibly fresh and fast delivery.
18. Culture
This chapter discusses the critical link between OKRs and organizational culture. I argue that OKRs cannot thrive without a supportive culture that values transparency, accountability, and collaboration. I explain how OKRs and CFRs can be used to strengthen existing cultures and drive positive change. I also emphasize the importance of leadership commitment and role-modeling for creating a high-performing culture.
Key concept: In the high-stakes arena of culture change, OKRs lend us purpose and clarity as we plunge into the new. CFRs supply the energy we need for the journey.
19. Culture Change: The Lumeris Story
This chapter presents the story of Lumeris, a company transforming healthcare by transitioning from volume-based “sick care” to value-based care. I detail how Lumeris initially struggled to implement OKRs due to a lack of trust and a passive-aggressive culture. I explain how Andrew Cole, Lumeris’s former head of HR, led a cultural transformation before successfully relaunching the OKR program. This story highlights the critical importance of addressing cultural barriers and fostering buy-in before deploying OKRs.
Key concept: “What’s in this for me?”
This was the unaddressed question everyone at Lumeris was asking about OKRs. It speaks to the need to clearly articulate the benefits and value proposition of OKRs for individuals and teams.
20. Culture Change: Bono’s ONE Campaign Story
This chapter shares the story of how Bono, the lead singer of U2, has used OKRs to drive positive change through his ONE Campaign, a global movement to combat extreme poverty and preventable disease. I explain how Bono, a self-described “factivist,” embraced the data-driven approach of OKRs to focus ONE’s efforts, measure progress, and hold the organization accountable. I detail how OKRs enabled ONE to adapt to changing circumstances, pivot its strategy, and ultimately become a more effective force for global good.
Key concept: “factivism” (fact-based activism)
21. The Goals to Come
This concluding chapter reflects on the power of OKRs and CFRs to drive positive change in all walks of life. I envision a future where structured goal-setting and continuous communication become more widely adopted, leading to greater productivity and innovation. I urge readers to embrace the OKR system, to experiment with it, and to adapt it to their own unique needs and circumstances.
Key concept: Ideas are easy; execution is everything.
Essential Questions
1. What are Objectives and Key Results (OKRs), and how do they work?
Objectives and Key Results (OKRs) is a goal-setting system focused on achieving ambitious goals by defining clear Objectives (the WHAT) and measurable Key Results (the HOW). Objectives should be significant, concrete, action-oriented, and inspirational, while Key Results must be specific, time-bound, aggressive yet realistic, and measurable and verifiable. The OKR system emphasizes transparency, accountability, alignment, and stretch goals to drive superior performance and innovation.
2. What are the four “superpowers” of OKRs, and why are they important?
The four superpowers of OKRs are: 1) Focus and Commit to Priorities: OKRs force us to choose what truly matters and align our efforts accordingly. 2) Align and Connect for Teamwork: Transparency in OKRs enables everyone to see how their work contributes to shared goals, fostering collaboration and innovation. 3) Track for Accountability: OKRs are living, breathing organisms that require continuous tracking, measurement, and reassessment. This ensures goals stay relevant and progress is monitored. 4) Stretch for Amazing: OKRs encourage us to set ambitious goals that push our limits and unlock our full potential.
3. What is Continuous Performance Management (CPM), and how does it relate to OKRs?
Continuous Performance Management (CPM) is a modern alternative to traditional annual performance reviews. It involves ongoing conversations, continuous feedback, and frequent recognition (CFRs) to motivate employees, drive performance, and foster personal growth. OKRs serve as the framework for these conversations, providing clear targets and measurable milestones to discuss and track progress. By decoupling compensation from goal-setting, CPM allows for a more open and collaborative environment where employees feel comfortable taking risks and striving for ambitious goals.
4. How does organizational culture impact the successful implementation of OKRs?
Organizational culture is the foundation for OKR success. A culture of transparency, accountability, and collaboration is essential for OKRs to take root and thrive. Leaders must model desired behaviors, communicate the value of OKRs to their teams, and foster an environment where people feel safe to take risks and learn from their mistakes.
5. What are the broader implications of OKRs, and how can they be applied in the context of AI and technology?
OKRs have wide applicability across various industries and sectors. They can be used by individuals to pursue personal goals, by teams to align efforts and achieve shared objectives, and by organizations to drive overall strategic alignment and performance. In the context of AI, OKRs can provide a valuable framework for managing complex projects, tracking progress, and fostering innovation. However, they need to be adapted to the unique characteristics of AI development, such as high uncertainty, rapid iteration, and evolving metrics.
Key Takeaways
1. Focus and Commitment to Priorities are Essential for Success
OKRs provide a powerful framework for prioritizing work, especially when facing numerous competing demands. By setting a limited number of Objectives, usually 3-5, and defining no more than 5 Key Results per Objective, teams can focus their time and energy on the most impactful work. This avoids the trap of spreading resources too thin and ensures progress on mission-critical initiatives.
Practical Application:
In an AI product development team, a team leader could define an ambitious Objective like “Develop a state-of-the-art AI model for natural language understanding.” Key Results could include “Achieve a 90% accuracy rate on benchmark dataset X by Q3” and “Publish a research paper on the model’s novel architecture by Q4.” These measurable and time-bound Key Results ensure the team stays focused and accountable for achieving the ambitious Objective.
2. Transparency and Alignment Foster Teamwork
Transparency in OKRs enables everyone to see how their work connects to the company’s broader goals, fostering a sense of shared purpose and alignment. This can dramatically improve communication, break down silos between departments, and unlock collaborative potential. When people can see the bigger picture and how their contributions fit in, they are more likely to be engaged and motivated.
Practical Application:
An AI team developing a new chatbot could use OKRs to break down silos between engineers, product designers, and UX researchers. They could co-create OKRs that ensure all teams are working in sync towards a common goal, such as “Launch a chatbot that achieves a 90% user satisfaction rating by Q4.” This shared understanding of goals and progress would foster better collaboration and ensure a more cohesive product.
3. Continuous Tracking and Measurement are Crucial for Success
Unlike traditional goal-setting, OKRs are living, breathing entities that require continuous tracking and reassessment. This involves setting clear metrics for success, monitoring progress regularly, and making adjustments as needed. This ensures that goals stay relevant and teams can adapt to changing circumstances.
Practical Application:
AI engineers can use OKRs to track the performance of their models. For example, an objective could be “Improve the accuracy of our image recognition model.” Key Results could be “Increase precision by 5% by the end of the quarter” and “Reduce false positive rate by 2% within the next month.” These measurable targets allow for objective assessment of progress and provide a basis for making data-driven decisions about model improvement.
4. Stretch Goals Can Unlock Extraordinary Potential
Stretch goals, or aspirational OKRs, push teams to achieve more than they thought possible. By setting goals that are slightly out of reach, organizations can unlock their full potential, drive innovation, and foster a culture of continuous improvement. However, stretch goals must be balanced with operational realities, and it’s important to celebrate “good fails” to encourage risk taking.
Practical Application:
In the field of AI safety, teams could set stretch goals like “Develop a framework for ensuring the ethical and responsible use of AI in healthcare.” While achieving this goal in its entirety within a quarter might be challenging, the effort itself would push the team to explore new ideas, collaborate with experts, and make significant progress towards advancing AI safety.
Suggested Deep Dive
Chapter: Chapter 17: Baking Better Every Day: The Zume Pizza Story
This chapter is particularly relevant to AI product engineers as it explores how Zume Pizza, a company heavily reliant on AI and robotics, has successfully implemented OKRs to manage its complex operations and achieve impressive results. It offers insights into how to use OKRs to drive innovation, manage cross-functional dependencies, and navigate rapid growth, all of which are relevant challenges in the field of AI.
Memorable Quotes
Chapter 1 - Google, Meet OKRs. 16
Ideas are easy. Execution is everything.
Chapter 1 - Google, Meet OKRs. 17
An OBJECTIVE, is simply WHAT is to be achieved, no more and no less.
Chapter 2 - The Father of OKRs. 39
“Output will tend to be greater,” Grove wrote, “when everybody strives for a level of achievement beyond [their] immediate grasp. . . . Such goal-setting is extremely important if what you want is peak performance from yourself and your subordinates.”
Chapter 4 - Superpower #1: Focus and Commit to Priorities. 57
“The art of management,” Grove wrote, “lies in the capacity to select from the many activities of seemingly comparable significance the one or two or three that provide leverage well beyond the others and concentrate on them.”
Chapter 12 - Superpower #4: Stretch for Amazing. 139
Thousand percent improvement requires rethinking problems, exploring what’s technically possible and having fun in the process.
Comparative Analysis
“Measure What Matters” provides a compelling and practical framework for goal setting that aligns with the emphasis on data-driven decision-making and rapid iteration prevalent in the AI and technology fields. While other notable works in the field of goal setting, such as Jim Collins’ “Good to Great”, emphasize the importance of ambitious, long-term “Big Hairy Audacious Goals (BHAGs)”, Doerr’s OKR system provides a more granular, actionable approach, enabling teams to break down audacious goals into achievable, measurable milestones. This aligns with agile methodologies commonly employed in AI development, where rapid iteration and continuous improvement are paramount. Moreover, Doerr’s focus on transparency and alignment resonates with the collaborative nature of most AI projects. Unlike traditional, top-down management approaches, OKRs empower individual contributors, fostering a sense of ownership and accountability that can accelerate innovation. However, “Measure What Matters” could benefit from a deeper exploration of how OKRs can be adapted for complex AI projects that involve high degrees of uncertainty and require frequent course correction. It could also delve into how OKRs can be integrated with other agile frameworks, like Scrum, and tailored for different stages of the AI product development lifecycle.
Reflection
“Measure What Matters” is a compelling read for anyone seeking to bring greater focus, alignment, and accountability to their work. Doerr’s passion for OKRs is infectious, and the book is packed with real-world examples that showcase their transformative power. However, it’s important to approach the book with a critical lens. While Doerr presents a strong case for OKRs, he doesn’t delve deeply into their potential drawbacks or implementation challenges. For instance, overly ambitious stretch goals can lead to burnout or create a culture of fear, particularly if failures are not handled constructively. Moreover, the book could benefit from a more nuanced discussion of how OKRs can be adapted for different organizational contexts and work styles. It’s not a one-size-fits-all solution, and what works for Google may not be appropriate for every company or team. Despite these caveats, “Measure What Matters” offers a valuable roadmap for improving goal setting and driving operational excellence. Its principles are broadly applicable, and its emphasis on transparency, alignment, and accountability resonates with the values of modern workplaces, particularly those engaged in rapidly evolving fields like AI and technology.
Flashcards
What does an Objective in an OKR define?
The “WHAT” - what you want to achieve.
What do Key Results in an OKR define?
The “HOW” - measurable milestones that demonstrate how you will achieve the objective.
What are the four superpowers of OKRs?
Focus and Commit to Priorities, Align and Connect for Teamwork, Track for Accountability, and Stretch for Amazing.
What does CFRs stand for?
Conversations, Feedback, and Recognition
What is a BHAG?
A large, ambitious goal that serves as a unifying focal point of effort and galvanizes people.
What does “a.m.b.” stand for in the context of OKRs?
It stands for “as measured by” and is used to make the link between objectives and their key results explicit.
What is the OKR system, and what companies are known for using it effectively?
A data-driven goal-setting system that was instrumental in the success of Intel and Google.