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Superpower #3: Track for Accountability

In God we trust; all others must bring data.

—W. Edwards Deming

One underrated virtue of OKRs is that they can be tracked—and then revised or adapted as circumstances dictate. Unlike traditional, frozen, “set them and forget them” business goals, OKRs are living, breathing organisms. Their life cycle unfolds in three phases, which I’ll consider in turn.

The Setup

While general-purpose software can get an OKR process up and running, there’s a catch: It doesn’t scale. When one Fortune 500 company recently tried to ramp up its goal-setting cadence, it hit a wall. All of its 82,000 contributors had dutifully recorded their annual objectives in Microsoft Word files! A move to quarterly OKRs would have generated 328,000 files per year. They’d all be public, in theory, but who would have the patience to search out connections or alignment? If you share a goal that nobody sees, is the system truly transparent?

In 2014, when Bill Pence came to AOL as global chief technology officer, top-line company and division goals were presented on a spreadsheet and rolled down from there. “But they never really had a home, where they connected on a daily basis with people,” Pence says. Without frequent status updates, goals slide into irrelevance; the gap between plan and reality widens by the day. At quarter’s end (or worse, year’s end), we’re left with zombie OKRs, on-paper whats and hows devoid of life or meaning.

Contributors are most engaged when they can actually see how their work contributes to the company’s success. Quarter to quarter, day to day, they look for tangible measures of their achievement. Extrinsic rewards—the year-end bonus check—merely validate what they already know. OKRs speak to something more powerful, the intrinsic value of the work itself.

As the bar for structured goal setting rises, more organizations are adopting robust, dedicated, cloud-based OKR management software. The best-in-class platforms feature mobile apps, automatic updating, analytics reporting tools, real-time alerts, and integration with Salesforce, JIRA, and Zendesk. With three or four clicks, users can navigate a digital dashboard to create, track, edit, and score their OKRs. These platforms deliver transformative OKR values:

• They make everyone’s goals more visible. Users gain seamless access to OKRs for their boss, their direct reports, and the organization at large.

• They drive engagement. When you know you’re working on the right things, it’s easier to stay motivated.

• They promote internal networking. A transparent platform steers individuals to colleagues with shared professional interests.

• They save time, money, and frustration. In conventional goal setting, hours are wasted digging for documentation in meeting notes, emails, Word documents, and PowerPoint slides. With an OKR management platform, all relevant information is ready when you are.

At AOL, CEO Tim Armstrong felt the company’s goals were “too disconnected,” Bill Pence recalls. “They weren’t linked together; they didn’t cascade up and down. They just didn’t stay tethered to the employees and the work they were doing through the year.” In 2016, Armstrong brought in a dedicated platform and rolled out OKRs. The upshot, Pence says, was radical transparency, real-time connection, and a company that coordinated operations as a matter of course.

OKR Shepherd

For an OKR system to function effectively, the team deploying it—whether a group of top executives or an entire organization—must adopt it universally. No exceptions, no opt-outs. Yes, there will be late adopters, resisters, and garden-variety procrastinators. To prod them to join the flock, a best practice is to designate one or more OKR shepherds. For years, that role in Google’s products department was filled by senior vice president Jonathan Rosenberg. Here is one of Jonathan’s classic communiqués, with the laggards’ names deleted to protect the guilty:

Midlife Tracking

As the Fitbit craze attests, people crave to know how they’re progressing and see it visually represented, down to the percentage point. Research suggests that making measured headway can be more incentivizing than public recognition, monetary inducements, or even achieving the goal itself. Daniel Pink, the author of Drive, agrees: “The single greatest motivator is ‘making progress in one’s work.’ The days that people make progress are the days they feel most motivated and engaged.”

Most goal management platforms use visual aids to show progress toward objectives and key results. Unlike steps on Fitbit, OKRs don’t require daily tracking. But regular check-ins—preferably weekly—are essential to prevent slippage. As Peter Drucker observed, “Without an action plan, the executive becomes a prisoner of events. And without check-ins to reexamine the plan as events unfold, the executive has no way of knowing which events really matter and which are only noise.”

As noted in chapter 4, the simple act of writing down a goal increases your chances of reaching it. Your odds are better still if you monitor progress while sharing the goal with colleagues—two integral OKR features. In one California study, people who recorded their goals and sent weekly progress reports to a friend attained 43 percent more of their objectives than those who merely thought about goals without sharing them.

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OKRs are adaptable by nature. They’re meant to be guardrails, not chains or blinders. As we track and audit our OKRs, we have four options at any point in the cycle:

• Continue: If a green zone (“on track”) goal isn’t broken, don’t fix it.

• Update: Modify a yellow zone (“needs attention”) key result or objective to respond to changes in the workflow or external environment. What could be done differently to get the goal on track? Does it need a revised time line? Do we back-burner other initiatives to free up resources for this one?

• Start: Launch a new OKR mid-cycle, whenever the need arises.

• Stop: When a red zone (“at risk”) goal has outlived its usefulness, the best solution may be to drop it.*

The point of a real-time dashboard is to quantify progress against a target and flag what needs attention. While OKRs are primarily a positive force for more, they also stop us from persisting in the wrong direction. As Stephen Covey noted, “If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster.” Late-in-game surprises are less likely when you track your OKRs for continuous feedback. Good news or bad, reality intrudes. In the process, “people can learn from failure and move on, perhaps turning some aspect of the setback into the seedling of a new success.”

When Remind’s school-messaging platform prototyped the company’s first revenue-yielding service, a peer-to-peer payment system, it was a total flop. “No one used it,” says Brett Kopf. “It didn’t solve a clear problem. We immediately altered the goal to build an event-driven system, where the teacher could say, ‘I’ve got a field trip next week. Are you coming, yes or no? And do you want to pay?’ That changed everything. It started driving and growing like crazy.”

Whenever a key result or objective becomes obsolete or impractical, feel free to end it midstream. There’s no need to hold stubbornly to an outdated projection—strike it from your list and move on. Our goals are servants to our purpose, not the other way around.

One proviso: When an objective gets dropped before the end of the OKR interval, it’s important to notify everyone depending on it. Then comes reflection: What did I learn that I didn’t foresee at the beginning of the quarter? And: How will I apply this lesson in the future?

For best results, OKRs are scrutinized several times per quarter by contributors and their managers. Progress is reported, obstacles identified, key results refined. On top of these one-on-ones, teams and departments hold regular meetings to evaluate progress toward shared objectives. Whenever a committed OKR is failing, a rescue plan is devised. At Google, the frequency of team check-ins varies with the business needs of the moment, the gap between predicted outcomes and execution, the quality of intragroup communication, and the group’s size and location(s). The more dispersed the team’s members, the more frequently they touch base. Google’s benchmark check-in cycle is monthly, at a minimum, though goal discussions there are so pervasive that formal meetings sometimes go by the boards.

Wrap-up: Rinse and Repeat

OKRs do not expire with completion of the work. As in any data-driven system, tremendous value can be gained from post hoc evaluation and analysis. In both one-on-ones and team meetings, these wrap-ups consist of three parts: objective scoring, subjective self-assessment, and reflection.

Scoring

In scoring our OKRs, we mark what we’ve achieved and address how we might do it differently next time. A low score forces reassessment: Is the objective still worth pursuing? If so, what can we change to achieve it?

On state-of-the-art goal management platforms, OKR scores are system-generated; the numbers are objective, untouched by human hands. (With less automated, homegrown platforms, users may need to perform their own calculations.) The simplest, cleanest way to score an objective is by averaging the percentage completion rates of its associated key results. Google uses a scale of 0 to 1.0:

• 0.7 to 1.0 = green.* (We delivered.)

• 0.4 to 0.6 = yellow. (We made progress, but fell short of completion.)

• 0.0 to 0.3 = red. (We failed to make real progress.)

Intel followed a similar formula. You may recall the OKR for Operation Crush, the company’s push to reclaim the microprocessor market. Here are Andy Grove’s actual marching orders from Q2 1980, as endorsed by his executive team (with end-of-quarter grades in brackets):

And here is how these scores were determined:

• We completed three of five benchmarks for an 0.6, a borderline green.

• We did indeed repackage the 8086 family, under a new product line called iAPX. So that’s a perfect 1.0.

• Production of the 8MHz part, set for early May, was a fiasco.* Because of problems with the polysilicon, the target had to be pushed to October. That’s a zero.

• As for the arithmetic coprocessor, the goal was to ship 500 parts by June 15. We wound up shipping 470—which computes to 0.9, another green.

Altogether, we averaged 62.5 percent (or a raw score of 0.625) on our KRs for this objective, a respectable grade. The Intel board judged it below expectations but not too far below, because they knew how aggressively management set our goals. As a rule, we’d enter a quarter knowing we wouldn’t achieve all of them. If a department so much as approached 100 percent, it was presumed to be setting its sights too low—and there would be hell to pay.

Self-assessment

In evaluating OKR performance, objective data is enhanced by the goal setter’s thoughtful, subjective judgment. For any given goal in a given quarter, there may be extenuating circumstances. A weak showing by the numbers might hide a strong effort; a strong one could be artificially inflated.

Say the team’s objective is to recruit new customers, and your individual key result is fifty phone calls. You wind up calling thirty-five prospects, for a raw goal score of 70 percent. Did you succeed or fail? By itself, the data doesn’t afford us much insight. But if a dozen of your calls lasted several hours apiece and resulted in eight new customers, you might give yourself a perfect 1.0. Conversely: If you procrastinated, rushed through all fifty calls, and signed only one new customer, you might assess your performance at 0.25—because you could have pushed harder. (And on reflection: Should the key result have prioritized new customers, rather than calls?)

Or say you’re a public relations manager, and your team’s key result is to place three national articles about your company. Though you get only two pieces published, one is a cover story in The Wall Street Journal. Your raw score is 67 percent, but you say, “I’m giving us a 9 out of 10, because we hit that one out of the park.”

Googlers are encouraged to use their OKRs in self-assessments—as guides, not as grades. As Shona Brown, former SVP of business operations, explained it to me, “It wasn’t that they got a red or yellow or green, but here was a list of what they’d delivered on that was above business as usual and connected to the overall goals of the company.” The point of objectives and key results, after all, is to get everyone working on the right things.

Table 10.1: Scoring and Assessment Variations

OKR	Progress	Score	Self-assessment
Bring in ten new customers.	70%	0.9	Due to a slump in the market, the OKR was significantly tougher to achieve than I’d thought. Our seven new customers represented an exceptionally good effort and outcome.
Bring in ten new customers.	100%	0.7	When I reached the objective only eight weeks into the quarter, I realized I’d set the OKR too low.
Bring in ten new customers.	80%	0.6	While I signed eight new customers, it was more luck than hard work. One customer brought in five others behind her.
Bring in ten new customers.	90%	0.5	Though I managed to land nine new customers, I discovered that seven would bring in little revenue.

Invariably, some people will grade themselves too harshly; others may need to be challenged. In either case, an alert facilitator or team leader will jump in and help recalibrate. In the end, the numbers are probably less important than contextual feedback and a broader discussion within the team.

Where OKR scores pinpoint what went right or wrong in the work, and how the team might improve, self-assessments drive a superior goal-setting process for the next quarter. There are no judgments, only learnings.

Reflection

OKRs are inherently action oriented. But when action is relentless and unceasing, it can be a hamster wheel of grim striving. In my view, the key to satisfaction is to set aggressive goals, achieve most of them, pause to reflect on the achievement, and then repeat the cycle. Learning “from direct experience,” a Harvard Business School study found, “can be more effective if coupled with reflection—that is, the intentional attempt to synthesize, abstract, and articulate the key lessons taught by experience.” The philosopher and educator John Dewey went a step further: “We do not learn from experience . . . we learn from reflecting on experience.”

Here are some reflections for closing out an OKR cycle:

• Did I accomplish all of my objectives? If so, what contributed to my success?

• If not, what obstacles did I encounter?

• If I were to rewrite a goal achieved in full, what would I change?

• What have I learned that might alter my approach to the next cycle’s OKRs?

OKR wrap-ups are retrospective and forward-looking at the same time. An unfinished objective might be rolled over to the next quarter, with a fresh set of key results—or perhaps its moment has passed, and it is appropriately dropped. Either way, sound management judgment comes first.

And one more thing. After thoroughly appraising your work and owning up to any shortfalls, take a breath to savor your progress. Throw a party with the team to celebrate your growing OKR superpowers. You’ve earned it.