Measure What Matters by John Doerr [Book Summary & PDF]

This book will help any organisation or team aim high, move fast, and excel. It’s a book for managers who want to lead their teams better & scale, as well as for entrepreneurs who seek the right metrics to grow their business.

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INTRODUCTION

Who is this book for?

This book will help any organisation or team aim high, move fast, and excel. It’s a book for managers who want to lead their teams better & scale, as well as for entrepreneurs who seek the right metrics to grow their business.

About the author

John Doerr is an American investor and venture capitalist at Kleiner Perkins. He is the author of Measure What Matters, a book about OKRs that led Google & Intel to massive success. For 2019, his net worth increased up to $7.7 billion, being the 215th in the Billionaires 2019 list. He serves on the board of the Obama Foundation and ONE.org.

In this summary

Measure What Matters is about using Objectives and Key Results (OKRs), a revolutionary approach to goal-setting, to make tough choices in business. Through OKRs, companies can align their teams towards common goals, propelling the company to success. Let’s see how this can be achieved!

BOOK SUMMARY

1. OKRS

“Organise the world’s information and make it universally accessible and useful.”

This was Google’s initial mission, when they started with Search. For them to make a real impact, however, they had to try and fail fast, track their progress, and measure what mattered. After all, “Ideas are easy. Execution is everything.”

That’s where John Doerr came in, introducing the OKRs (short for Objectives and Key Results), a collaborative goal-setting protocol for companies, teams, and individuals. OKRs ensure that a company focuses its efforts on the same important issues throughout the organisation.

An Objective is simply WHAT is to be achieved. Objectives are significant, concrete, action-oriented, and (ideally) inspirational.

Key Results benchmark and monitor HOW we get to the Objective. Effective KRs are specific and time-bound, aggressive yet realistic. Most of all, they are measurable and verifiable. It’s not a key result unless it has a number. In other words, you either meet a Key Result’s requirements or you don’t; there is no gray area.

Objectives are the stuff of inspiration and far horizons. Key Results are more earthbound and metric-driven. They typically include hard numbers for one or more gauges: revenue, growth, active users, quality, safety, market share, customer engagement.

An effective OKR system links goals to a team’s broader mission, lending purpose, alignment, clarity, and job satisfaction to the entire organisation.

As for Google? Eric Schmidt credits OKRs with “changing the course of the company forever.”

Here’s a few key lessons about OKRs:

  • Less is more. A limit of three to five OKRs per cycle leads companies, teams, and individuals to choose what matters most.
  • Set goals from the bottom up. To promote engagement, teams and individuals should be encouraged to create half of their own OKRs, in consultation with managers.
  • Stay flexible. If an Objective no longer seems practical or relevant as written, Key Results can be modified or even discarded mid-cycle.
  • Dare to fail. While certain operational Objectives must be met in full, aspirational OKRs should be uncomfortable and possibly unattainable. to push organisations to new heights.
  • Be patient; be resolute. Every process requires trial and error. An organisation may need up to four or five quarterly cycles to fully embrace the system, and even more than that to build mature goal muscle.

Here’s an example OKR from Zume Pizza:

OBJECTIVE: Delight customers

KEY RESULTS

  1. Net Promoter Score of 42 or better.
  2. Order Rating of 4.6/5.0 or better.
  3. 75% of customers prefer Zume to competitor in blind taste test.

2. OKR SUPERPOWERS

Superpower #1 – Focus & Commit to Priorities

“It is our choices . . . that show what we truly are, far more than our abilities.” – J.K. Rowling

Measuring what matters begins with the question: What is most important for the next three (or six, or twelve) months? No one individual – or company – can “do it all.”

Successful organisations focus on the initiatives that can make a real difference, deferring less urgent ones. Their leaders commit to those choices in word and deed. By standing firmly behind a few top-line OKRs, they give their teams a compass and a baseline for assessment.

If you ask your team, will they be able to identify the top priorities of the company? For superior performance, top-line goals must be clearly understood throughout the organisation.

The author suggests that quarterly OKRs are best suited to keep pace with today’s fast-changing markets. A three-month horizon curbs procrastination, boosts focus, and leads to real performance gains.

For smaller, fast-growing startups, OKRs help founders keep firing themselves from jobs they did in the beginning. Initially many founders handle accounting, payroll, admin etc., which drain a lot of time. OKRs help founders focus on product, strategy, and team management, the big-picture objectives. In other words, they keep them away from micromanaging.

Finally, to inspire true commitment, leaders must practice what they teach; they must model the behaviour they expect of others by committing to OKRs publicly and visibly.

Superpower #2 – Align & Connect for Teamwork

The founder and CEO of Box said:

“At any given time, some significant percentage of people are working on the wrong things. The challenge is knowing which ones.”

In larger organisations, it’s common to find several people unwittingly working on the same thing. A lack of alignment, according to a poll of global CEOs, is the number-one obstacle between strategy and execution.

With transparent Objectives, OKRs expose redundant efforts and save time and money. In an OKR system, the most junior staff can look at everyone’s goals, on up to the CEO. Critiques and corrections are out in public view.

Transparency seeds collaboration. Colleagues can see when someone needs help and offer support. 92 percent of the US working adults said they’d be more motivated to reach their goals if colleagues could see their progress.

Public goals are more likely to be attained than goals held in private. When people see how their goals are connected with their colleagues’ goals, they can contribute more meaningfully to the company’s success and see the overall consequences of their actions.

Healthy organizations encourage some goals to emerge from the bottom up (bottom-up OKRs foster engagement and innovation), while other goals get defined by the company’s leaders (top-down alignment brings meaning to work, authority, and long-term vision).

In other words, a healthy OKR environment strikes a balance between alignment and autonomy, common purpose and creative latitude.

“Connected goal-setting is critical to enabling employees to do the best work of their lives.” – Brad Smith, Intuit CEO

Superpower #3 – Track for Accountability

“In God we trust; all others must bring data.” – W. Edwards Deming

Unlike traditional, “set and forget” business goals, OKRs are living, breathing organisms driven by data: they can be tracked and revised or adapted as circumstances dictate.

But if all OKRs are public in a general-purpose software (say, Google Docs), who would have the patience to search out connections or alignment? It’s not scalable.

Likewise, without frequent status updates, goals become irrelevant. At quarter’s end (or worse, year’s end), we’re left with on-paper, zombie OKRs devoid of meaning.

Fortunately, more and more organisations are adopting robust, dedicated, cloud-based OKR management software, where users can navigate a digital dashboard to create, track, edit, and score their OKRs, as well as see their connections with others’ OKRs.

Such platforms make everyone’s goals more visible, drive engagement, promote internal networking, and save time, money, and frustration.

Most importantly, frequently tracked OKRs speak to something powerful: the intrinsic value of the work itself. People crave to know how they’re progressing and see it visually represented, down to the percentage point.

Periodic check-ins – preferably weekly – are essential, too. Without them, the executive has no way of knowing what matters and what’s noise.

Tracking OKRs can stop you from persisting in the wrong direction. Feel free to end an obsolete Key Result or Objective midstream. Just make sure you notify everyone depending on it and reflect on what you’ve learned.

Finally, objective grading, continuous reassessment, and reflection will help you reveal information hidden inside the numbers that you couldn’t reveal otherwise.

Superpower #4 – Stretch for Amazing

OKRs motivate us to excel by doing more than we’d thought possible. Aspirational goals draw on every OKR superpower:

  • Focus and commitment are a must for targeting goals that make a real difference.
  • Only a transparent, collaborative, aligned, and connected organisation can achieve so far beyond the norm.
  • Without quantifiable tracking, how can you know when you’ve reached that amazing stretch objective?

We can learn a lot from Google: they divide their OKRs into two categories.

  1. Committed Objectives: they are tied to Google’s metrics, such as product releases, bookings, hiring, customers. Management sets them at the company level, employees at the departmental level. These committed objectives (sales & revenue goals) are to be achieved in full (100 percent) within a set time frame.
  2. Aspirational Objectives: they reflect bigger-picture, higher-risk, more future-tilting ideas. They originate from any tier and aim to mobilise the entire organisation. By definition, they are challenging to achieve. Failures – at an average rate of 40 percent – are part of this territory.

Leaders are forced to ask the following question: What type of company do we need to be in the coming year? Agile and daring, to crack a new market – or more conservative and operational, to firm up our existing position?

In pursuing high-effort, high-risk goals, employee commitment is essential. Stretch your team too fast and too far, and it may snap. Leaders must convey two things: the importance of the outcome, and the belief that it’s attainable.

Starting with a modest stretch, over time teams and individuals gain experience with OKRs, and their Key Results become more precise and more aggressive.

3. CONTINUOUS PERFORMANCE MANAGEMENT & CULTURE

Individuals cannot be reduced to numbers. If a conversation is limited to whether you’ve achieved the goal or not, you lose context. You need continuous performance management to explore critical questions:

  • Was the goal harder to achieve than you’d thought when you set it?
  • Was it the right goal in the first place? Was it motivating?
  • Should we double down on the two or three things that really worked for us last quarter, or is it time to consider a pivot?

Continuous performance management is implemented with an instrument called CFR, which give OKRs their human voice:

  • Conversations: an authentic, richly textured exchange between manager and contributor, aimed at driving performance.
  • Feedback: bidirectional or networked communication among peers to evaluate progress and guide future improvements.
  • Recognition: expressions of appreciation to deserving individuals for contributions of all sizes.

Conversations

Five critical areas emerge from conversation between managers and contributors:

  1. Goal setting and reflection. The discussion focuses on how best to align individual Objectives and Key Results with organisational priorities.
  2. Ongoing progress updates. The brief and data-driven check-ins on the employee’s real-time progress, with problem solving as needed.
  3. Two-way coaching. It helps contributors reach their potential and managers do a better job.
  4. Career growth. It develops skills, identifies growth opportunities, and expands employees’ vision of their future at the company.
  5. Lightweight performance reviews. A feedback mechanism to gather inputs and summarise what the employee has accomplished since the last meeting.

Feedback

Today’s workers want to be ‘empowered’ and ‘inspired,’ not told what to do. They want to provide feedback to their managers, not wait for a year to receive feedback from their managers. They want to discuss their goals on a regular basis, share them with others, and track progress from peers.

In Adobe, individuals want to know how they’re doing while they’re doing it, and also what they need to do differently. Contributors get highly specific performance feedback at least once every six weeks. This way, everybody knows where they stand and how they’re contributing value to the company.

Recognition

Modern recognition is performance-based and horizontal. Here are some ways to implement it:

  • Institute peer-to-peer recognition. When employee achievements are consistently recognized by peers, a culture of gratitude is born.
  • Establish clear criteria. Recognise people for actions and results: completion of special projects, achievement of company goals, demonstrations of company values.
  • Share recognition stories. Newsletters or company blogs can supply the narrative behind the accomplishment, giving recognition more meaning.
  • Make recognition frequent and attainable. Hail smaller accomplishments, too: that extra effort to meet a deadline, that special polish on a proposal, the little things a manager might take for granted.
  • Tie recognition to company goals and strategies. Customer service, innovation, teamwork, cost cutting – any organisational priority can be supported by a timely shout-out.

To sum up, OKRs are clear vessels for leaders’ priorities and insights. CFRs help ensure that those priorities and insights get transmitted. But goals cannot be attained without a medium: an organisation’s culture.

Culture is “a set of values and beliefs, as well as familiarity with the way things are done and should be done in a company.”

An OKR culture is an accountable culture. You don’t push toward a goal just because the boss gave you an order. You do it because every OKR is transparently important to the company and to the colleagues who count on you. It’s a social contract, but a self-governed one.

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CONCLUSION

Key Takeaways

  • Ideas are easy; execution is everything.
  • An Objective is simply WHAT is to be achieved. Key Results monitor HOW we get to the Objective.
  • An effective OKR system links goals to a team’s broader mission, alignment, and clarity to the entire organisation.
  • OKRs have 4 superpowers: 1. focus & commit to priorities, 2. align & connect for teamwork, 3. track for accountability, and 4. stretch for amazing.
  • Continuous performance management is implemented with CFR: Conversations, Feedback, Recognition.
  • Goals cannot be attained without a medium: an organisation’s culture.

Further Reading

Radical Candor By Kim Malone Scott. Kim Scott teaches her vital new approach to effective management, the “Radical Candor” method, with lessons distilled from her experience at Apple and Google.

Guidelines is my eBook that summarises the main lessons from 33 of the best-selling self-help books in one place. It is the ultimate book summary; Available as a 80-page ebook and 115-minute audio book. Guidelines lists 31 rules (or guidelines) that you should follow to improve your productivity, become a better leader, do better in business, improve your health, succeed in life and become a happier person.

Action steps

  1. Visit the book’s website for additional resources.
  2. Read aspirational stories of how others set their OKRs.
  3. Download Google’s OKR Playbook to learn from the organisation that used OKRs to 10x their growth.
  4. Download the complete book on Amazon.

This summary is not intended as a replacement for the original book and all quotes are credited to the above mentioned author and publisher.