Table of Contents

• Introduction
• A Brief History of OKRs
• What Are OKRs?
• OKR Cycles
• Radical Transparency
• Align for Teamwork
• Examples of OKRs
  • Company-Level OKR
  • Engineering Team OKR
• Challenging Goals Drive Performance
• Focus and Commit to Priorities
• Track for Accountability
• Stretch for Amazing
• What Are CFRs?
• Culture
• Potential Challenges and Pitfalls
• Personal Anecdotes
• Conclusion

Introduction

As a full-stack engineer, I always seek ways to streamline processes and maximize impact. In this quest, I finally read John Doerr's Measure What Matters: OKRs and was blown away by the power and simplicity of Objectives and Key Results (OKRs) to transform how companies set and achieve goals, including large corporations like Google and Adobe and startups like Remind and Nuna.

Inspired by this framework, I've even adopted OKRs to manage my personal and professional goals—as the CEO of my life, if you will.

In this article, I distill the key concepts from Doerr's book, focusing on how OKRs and their complementary practice, CFRs (Conversations, Feedback, and Recognition), empower teams to deliver exceptional results.

While I'm no OKR expert, I hope this summary is a helpful starting point for your exploration. Any errors or omissions in my interpretation are solely my own and do not reflect Doerr's work.

Understanding OKRs and CFRs can revolutionize your approach to work, whether you're a seasoned tech lead or an individual contributor.

So, let's get to it.

A Brief History of OKRs

The roots of OKRs can be traced back to the 1950s when Peter Drucker introduced the concept of Management by Objectives (MBOs) in his seminal work, The Practice of Management. MBOs quickly gained traction in the corporate world, with companies like Hewlett-Packard embracing the framework.

In 1971, Andy Grove, then executive vice president of Intel, took MBOs to the next level with his adaptation, Intel Management by Objectives (iMBOs). Grove's system refined the MBO process, emphasizing measurable results and regular check-ins.

Enter young John Doerr, who experienced the power of iMBOs firsthand during his summer internship at Intel in 1975. Doerr was so impressed by the system's effectiveness that he later coined the term "OKRs" (Objectives and Key Results) and successfully implemented them in the desktop division at Sun Microsystems. When Doerr joined venture capital firm Kleiner Perkins in 1999, he introduced the OKR framework to numerous startups they funded, including a little-known search engine called Google.

The rest, as they say, is history. OKRs have since become a cornerstone of Google's culture and have been adopted by countless other organizations worldwide, from tech giants to non-profits.

What Are OKRs?

"OKRs have such enormous potential because they are so adaptable. There is no dogma, no one right way to use them." (Doerr, 2018, p. 246)

OKRs stand for Objectives and Key Results, a data-driven goal management process for setting, communicating, measuring, and achieving goals—a process aimed at operating excellence.

• Objectives: An objective is qualitative and defines what to achieve—the direction. Objectives should be aggressive yet realistic, concrete, action-oriented, and inspirational. They can be long-lived, rolled over for a year or longer, and typically have five or fewer key results. Achieving an objective must provide clear value for the company.

• Key Results: A key result is quantitative and defines how to achieve our objectives—the measurable outcomes. Key results should be specific, unambiguous, and measurable, usually including hard numbers, e.g., revenue or customer engagement. They must be time-bound, with deadlines no later than the end of the cycle. Completing all key results should fulfill the objective; otherwise, we designed a poor OKR in the first place.

Effective OKRs capture the most important goals and how to achieve them rather than smaller tasks.

Companies should invest in software to manage OKRs properly.

OKR Cycles

Companies typically set shorter-term, quarterly OKRs at the beginning of each quarter (or weeks before it) and longer-term annual OKRs at the beginning of each year (or weeks before it), running them in parallel. Early-stage startups may operate in shorter timeframes, e.g., monthly cycles.

Radical Transparency

"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." (Doerr, 2018, p. 116)

Every individual, team, and department should have public OKRs that are clearly written and accessible to everyone in the organization. This radical transparency fosters a shared understanding of priorities and encourages open communication about progress.

Align for Teamwork

Effective OKR processes are collaborative, blending top-down and bottom-up approaches. Executives set top-level OKRs that align with the company's mission and strategy. These objectives cascade down through the organization, with managers and individual contributors creating roughly half of their OKRs to execute those top-level objectives while developing original insights.

That balance prevents a rigid top-down approach that could stifle innovation and motivation. It compels individuals to consider the business, fosters collaboration between teams and departments, and creates strong alignment across the company, connecting everyone to the same meaningful objectives.

"According to the Harvard Business Review, companies with highly aligned employees are more than twice as likely to be top performers." (Doerr, 2018, p. 78)

Employees are highly motivated when they help set their goals, when their goals are public, and when they understand how their efforts contribute to the company's goals. They feel empowered to decline tasks unrelated to their OKRs, devoting most of their time to the company's most important tasks.

Examples of OKRs

To illustrate how OKRs work in practice, let's consider two examples:

Company-Level OKR

Objective: Increase user engagement on our flagship product by 20% by DATE HERE.

Key Results:

1. Improve average session duration by 10% by DATE HERE.
2. Increase daily active users by 15% by DATE HERE.
3. Launch two new features based on user feedback by DATE HERE.

Engineering Team OKR

Objective: Streamline the onboarding process for new users by DATE HERE.

Key Results:

1. Reduce the average time to complete onboarding by 50% by DATE HERE.
2. Increase the first-week retention rate of new users by 10% by DATE HERE.

Challenging Goals Drive Performance

Specific, challenging goals drive performance more effectively than easy or vaguely worded ones. (Edwin Locke, psychology professor at the University of Maryland.)

OKRs should push teams and individuals beyond their comfort zones. If you can fully execute every OKR on time or in advance, you're likely not pushing yourself hard enough.

However, companies should separate OKRs from performance reviews and bonuses to prevent conservatism and sandbagging.

Focus and Commit to Priorities

"A few extremely well-chosen objectives impart a clear message about what we say 'yes' to and what we say 'no' to." —Andy Grove.

Successful companies focus on a vital few strategic OKRs, and their leaders publicly commit to their objectives, modeling expected behaviors and bringing everyone on board.

Mid-cycle projects and ideas unrelated to current OKRs should be set aside for evaluation during the next cycle's planning.

Track for Accountability

Teams should meet regularly to revisit OKRs throughout their life cycle, discuss progress, address challenges, adjust key results, measure success, and fail fast.

OKRs can be modified or discarded mid-cycle if they stop making sense, and new OKRs might be designed to keep supporting the current objectives.

At the end of each cycle, teams review and score OKRs, reflecting on what worked and what didn't, celebrating achievements.

Stretch for Amazing

"If you set a crazy, ambitious goal and miss it, you'll still achieve something remarkable." —Larry Page.

OKRs can be divided into two categories: committed objectives (operational goals) and aspirational objectives (stretch goals).

Committed objectives: These are tied to essential metrics and should be fully achieved within a set timeframe. (Doerr, 2018, p. 135)

Aspirational objectives: These reflect bigger-picture, higher-risk ideas and may not always be entirely achievable. However, they should inspire innovation and push organizations to new heights.

"To succeed, a stretch goal cannot seem like a long march to nowhere. Leaders must convey two things: the importance of the outcome, and the belief that it's attainable." (Doerr, 2018, p. 141)

BHAG (Big Hairy Audacious Goal) and landmark OKRs are other popular names for aspirational objectives.

Depending on the moment, a company might have no or a few aspirational objectives. An iconic example of an aspirational goal is NASA's 1960s moon mission.

What Are CFRs?

Companies find annual performance reviews costly and are replacing them with continuous performance management through CFRs (Conversations, Feedback, and Recognition), complementing OKRs by enhancing transparency, accountability, and teamwork, embodying all the interactions that tie teams together. Side by side, they form a complete delivery system.

"Ten percent of Fortune 500 companies have already ditched the old once-a-year performance review system, and their numbers are growing." (Doerr, 2018, p. 177)

• Conversations: Continuous peer-to-peer conversations between managers and contributors go beyond goal achievement, addressing progress, development needs, and new ideas, thereby increasing employee engagement.

• Feedback: Continuous feedback provides specific performance insights on a monthly or even weekly basis, vastly improving growth opportunities compared to annual reviews. (Doerr, 2018, p. 187)

• Recognition: Continuous peer-to-peer recognition through expressions of appreciation fosters a culture of gratitude and acknowledges achievements of all sizes.

Culture

Authentic conversations, constructive feedback, and recognition make challenging OKRs flow throughout a company, building a positive, accountable culture where everyone takes pride in their contributions.

"Chiefs of large companies are turning to OKRs and CFRs as tools for culture change." (Doerr, 2018, p. 212)

Potential Challenges and Pitfalls

While OKRs and CFRs offer a robust framework for goal-setting and performance management, they are not without challenges. Some common pitfalls to watch out for include:

• Lack of commitment from leadership: For OKRs to be successful, leadership must fully embrace and champion the process.
• Neglecting CFRs: Without regular conversations, feedback, and recognition, OKRs can become meaningless checklist exercises.
• Setting unrealistic objectives: Overly ambitious OKRs can demotivate teams and lead to burnout.
• Low-value objectives: OKRs should deliver clear business value; otherwise, there is no reason to expend resources on them.
• Insufficient key results: Writing key results that are necessary but insufficient delays or prevents achieving objectives.
• Sandbagging: Teams meeting all their OKRs without entirely using their resources are likely not stretching themselves beyond their comfort zones.

Personal Anecdotes

As a full-stack engineer, I've experienced firsthand how a lack of clear goals and alignment can lead to frustration and wasted effort.

In one project, our team spent weeks building a feature that ultimately didn't align with the company's strategic priorities. With OKRs, we could have identified this misalignment early on and pivoted to a more impactful initiative.

Another common challenge is the dreaded "feature creep," where a project's scope expands beyond its original objectives. OKRs can help prevent this by providing a clear framework for prioritizing features and ensuring everyone is focused on the most critical goals.

Conclusion

As John Doerr eloquently puts it, "Ideas are easy. Execution is everything." OKRs and CFRs provide a powerful framework for turning ideas into tangible results. By setting ambitious goals, tracking progress transparently, and fostering a culture of continuous feedback and recognition, teams can unlock their full potential and achieve extraordinary outcomes.

If you're ready to transform how your team sets and achieves goals, I highly recommend reading Measure What Matters: OKRs by John Doerr. It's a treasure trove of insights and practical advice that can revolutionize your approach to work.

Let me know in the comments below how you like it and if you've tried implementing OKRs and CFRs on your team. I'd love to hear about your experiences and lessons learned!

Related posts

• What is a product specification?
• How to report bugs effectively?

Bibliography

• Doerr, J. (2018). Measure What Matters: OKRs. 2nd ed. Portfolio/Penguin.