How Strongly I Recommend: 6/10
How Likely I Will Gift It To Somebody: 4/10
What is the book about? (summary)
The book is about OKRs (Objective and Key Results) developed by legends at Intel. OKRs are effective business measurement systems to improve performance and job satisfaction, resulting in better company achievements.
The book first explains the OKRs and talks about its superpowers: focus and commitment, teamwork, accountability, and having stretch goals. Then it ties OKRs to individual performance, career growth, and company culture to close the loop.
In short, having transparently defined three-to-five objectives and each objective with 3-5 key results provide everyone clarity around the most important thing for the company. Once the goal is clear, people can align their own teams around the goals to achieve better results. When the teams cannot reach their key results, they mark them as yellow (at risk) or red (cannot achieve). The difference between OKRs and other goal systems is reds and yellows are welcomed in OKRs. If all OKRs are green, it shows they were not great OKRs. OKRs should stretch the goals and the team but still be attainable.
All these work-around OKRs cannot succeed without having great personnel management and strong leadership. When compensation is tied to feedback and achievements (OKRs), the culture won’t allow OKRs to thrive. The compensation has to be separated from OKRs and how much the teams achieve OKRs. Individual performance feedback cycles should be shortened and also disconnected from compensation. Managers must have one-one-one conversations with their direct reports to track their career progress, help them unblock and move forward at their work, and bi-directionally coach each other. This culture will build trust and transparency at work. Once we have the environment right, OKRs can thrive.
The Review
OKRs are great on paper. And the book is enthusiastically written. There is a lot of marketing within the book to sell the idea. Although the idea is simple, the application takes a lot of time and effort. As also explained in the book many times, every company will apply OKRs a bit differently than each other, and it’s okay. There is no right way to use OKRs; everyone must adapt to themselves.
However, reading this book cover to cover is a waste of time. I’m glad that I skimmed most stories instead of reading them. Stories showed me that the marketing of OKRs is strong in this book. The language is like fuck-up night: we failed, but hook how we got it right. I understand why these stories are there, but anyway.
OKRs are not a silver bullet, and it’s impossible to apply 100% correctly, much like any other metric system. Building the OKR culture demands much more work than using OKRs.
Another problem comes up if the company is really big. The coordination work and team alignment becomes messy, and more than one team will be working on the same or similar projects to contribute to company-level OKRs. Identifying these cases is possible, but eliminating them or making two teams work together is challenging. Therefore, I would say OKRs are more suitable for smaller companies. Yet, they have their place in big companies, too; I just don’t keep my expectations too high and use them as a tool to understand what’s important and what has priority.
Who Should Read It?
Anyone who works with OKRs or wants to work with OKRs.
Why should you read it? (Why I recommend it)
I don’t recommend reading this book cover to cover. If you’re curious about OKRs, take this book and skim over it. Once you understand what the OKRs are about, only read the book if you are sure you’ll implement it. Even then, don’t read cover to cover. Just get your hands dirty with OKRs and read the book for certain points (you can use the table of content and index at the back to find what you’re looking for).
Chapter Notes (Summary by Chapter)
Introduction
OKRs are not a silver bullet. If you have strong leadership, creative culture, and sound judgment, OKRs can only lift you up.
Goal setting is not new, but studies have found that when the goals are not used well, they are recipes for disaster. However, once the goals provide clarity and are clear and freely shared with everyone, they create job satisfaction and motivation.
So, What is OKR?
OKR stands for Objective and Key Results.
Objective: What will be achieved: concise, clear, action-oriented, and inspirational. Destroys fuzzy thinking and execution. Key Results (KRs): Answers the question, “How do we know we reached the objective?” It is measurable, time-bound, aggressive, and realistic. There’s no grey area in KR; you achieve it or not. If all KRs are completed, the objective is achieved.
There shouldn’t be more than three to five OKRs at the company level; less than five OKRs are always better. OKRs shouldn’t be top-down but bottom-up. There shouldn’t be any dictating: after agreeing on an objective, key results should become contracts between people.
Company and teams should be flexible: if the environment changes, OKRs can charge as well. People should be open to failure. OKRs are a tool, not a weapon. Everyone (especially leaders) should be patient; adapting to OKRs and leveraging them takes time and practice.
How do OKRs Help Teams?
OKRs have four superpowers that help any team increase performance and bring trust.
Focus & Commit to Priorities
OKRs provide focus and commitment to the right priorities. To figure out the priority, leaders should ask, “what are the most important things we have to focus on in the next three months?” The answer will be the objective.
A leader’s job is to make the most important thing—the objective—clear and communicate it with everyone clearly. Everyone in the company must clearly understand the top-level leadership’s perspective—goals and what they mean. Leaders have no chance but to repeat and communicate both what is important and why that objective is important until everyone gets it. (commitment)
Key Results are the measurable part of OKRs. They are the measurement against the objective. They can be defined yearly at first when organizations transition from hierarchical goals to OKR goal setting. Also, there is no one-size-fits-all approach; every company is different, and everyone can define their OKRs in a different cadence. Keep OKR cycles short to keep receiving feedback on long-term goals. As there is no one-size-fits-all timeframe, experiment with cadence and find your own rhythm. The aim is to get early feedback on the goals. Therefore, monthly, 6-weekly, or quarterly OKRs are usually good ideas.
There should be three to five key results for each objective, and we need to be careful about them. Some KRs can be taken alone and optimized while keeping the quality out of sight. Therefore, KRs should have matching quality KRs. For example, if one of the KRs is to have 30 sales calls in a month, there should be a matching quality KR that will indicate the quality of these sales calls.
Moreover, focus means fewer OKRs; the number of OKRs should be minimum. When there are many OKRs, nobody understands what matters the most. That’s why saying no, having fewer OKRs is better to focus everyone and have them commit to the OKRs.
Commitment means leaders must ensure people understand what the OKRs are and why they are there (instead of other OKRs that are left out). Leaders must also follow up with people (sometimes even chase them) so that everyone not only creates their own OKRs but also keeps them up-to-date and uses them daily. One way is making OKRs public: even the individual OKRs the leaders have on their own.
Align and Connect for Teamwork
Transparent OKRs create alignment. When goals are hidden, people don’t know the most important objectives, and they work on the wrong things. That’s the worst thing that can happen to any business.
Having visibility prevents people from going off-track. The most important becomes visible. While defining ours, we need a healthy mix of a top-down and bottom-up approach. There is no one way to implement the mix; it will be based on trial and error in the process. If we only follow the top-down OKR setting, we break agility and flexibility, and it becomes difficult to connect cross-department work and make front-line contributors speak up. This micromanagement shuts down ideas and feedback that should flow from first-line contributions to leadership. When there is a healthy level of bottom-up, people become more engaged and align their OKRs to very top-level OKRs. They bring feedback that makes us more adaptive to changes happening around business. This way, people can also achieve their goals already aligned with top-level OKRs. So, everyone wins.
Moreover, since the OKRs are transparent, departments and teams can check what others are doing, offer help, or identify whether they are working on the same thing and decide to abandon or merge. Transparent OKRs help teams to foster better collaboration.
Track for Accountability
OKRs bring accountability. Scoring OKRs publicly and telling everyone how much the OKRs are achieved (or at risk) brings accountability into the game. Scoring OKRs are usually measured by how much is achieved in the KR, but no mathematical rule exists. Scoring the OKR as 0.9 out of 1.0 while completing the target by 70% is possible. That judgment makes the scoring effective. It’s not about how much we reached the target; it’s about the quality and effectiveness (as it’s also mentioned before, quality is important). We can reach the target 100%, but if the results are ineffective, we can rate it by 0.7 out of 1.0.
Accountability also has another side: reflection. This judgment element and also alignment in an action-oriented OKR system demands reflection. After every OKR cycle, we need to look back and ask ourselves what contributed to our success and what obstacles we’ve seen. If we would rewrite the goal, what would we change, and what did we learn that can change our approach in the next cycle? This reflection will help in every OKR cycle to get better at not only defining the goals but learning how we work, our delivery speed, and our missing capabilities.
Stretch for Amazing
OKRs shouldn’t be comfortable to reach and not easy to complete. The well-chosen metrics and high-quality OKRs ensure we look at the right thing. However, we also need to understand and make it clear how we look at that thing. “OKRs should be uncomfortably exciting.” They shouldn’t be kept conservative. They should stretch to a level where the goal is still attainable, but it pushes everyone to their limit. They should create excitement in people, and the team should clearly follow them. If they are too stretched, the team loses their belief and trust in leadership. An OKR can be 70% reachable; in certain situations, we can consider it successful if it’s reached 70%.
The leaders should be comfortable with having yellow or red OKRs in their OKR list and should never hesitate to stretch the goals (while being informed by their people and ensuring the goal is still attainable).
Continuous Performance Management: OKRs and CFRs
CFR stands for Conversation, Feedback, and Recognition.
Having yearly performance cycles doesn’t really work because most of the actions have passed, and the feedback doesn’t provide value. Many people get good performance reviews but not good enough compensation. The whole process creates disappointments, and people leave the company. The main problem is that the feedback is not timely and tied to compensation. We need constant Conversation, consistent and timely Feedback, and Recognition of great accomplishments.
The first action is disconnecting performance review feedback from compensation. The compensation changes should occur once a year (or every six months), while feedback and recognition should be part of daily work. It all starts with one-one-one conversations between the manager and the direct report. Research shows that regular (weekly or bi-weekly) one-on-one meetings save time for the direct report (each hour saves two weeks from employees). These meetings should be aimed at the direct report. It’s their meeting, not the manager. The manager should talk to the max. 10% of the time. These meetings should be used for goal setting and reflection, ongoing progress updates, two-way coaching, career growth, and lightweight performance reviews.
As we ditch yearly performance reviews, we need consistent positive and negative, timely, specific, and clear feedback. It should be 360: between manager and direct report, between peers, and between cross-collaborations.
The last missing part is recognition; we need to recognize smaller achievements—shout-outs of simple things—so that people get pride in their work. It contributes to team performance as a positive reinforcement. The recognition shouldn’t always come from the manager but also peer-to-peer. There can be stories in recognition, too; they provide authenticity and relatedness. Recognition should be frequent, authentic, and tied to company goals and strategies.
Culture
The culture of the company is crucial to make OKRs work. If people’s hearts are not in the right place, if there isn’t trust and transparency, and if accountability and responsibility are not present with vulnerability, then nothing will work. Use CFRs to build the culture, positivity, enthusiasm, and daily improvements. Promote peak performance and stretch thinking with collaboration. Only then start using OKRs to boost the performance.
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