Identity & Culture
Out-Behave to Outperform
situational“Dov’s big idea is that companies that “out-behave” their competition will also outperform them. He identified a value-driven model, the “self-governing organization,” a place where long-term legacy trumps the next quarter’s ROI. These organizations don’t merely engage their workers. They inspire them. They replace rules with shared principles; carrots and sticks are supplanted by a common sense of purpose. They are built around trust, which enables risk taking, which spurs innovation, which drives performance and productivity.”
▸ 3 evidence highlights
Operating Principle
Reflection Cycles Beat Relentless Execution
situational“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.””
▸ 3 evidence highlights
Implementation Tactic
Big Rocks Fill the Jar First
situational“company. He used a metaphor called the Big Rocks Theory, which was popularized by Stephen Covey. Say you have some rocks, and 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.”
▸ 3 evidence highlights
Decision Framework
Pulsing Captures Culture in Real Time
situational“feedback. One frontier is pulsing, an online snapshot of your workplace culture. These signal-capturing questionnaires may be scheduled weekly or monthly by HR or made part of an ongoing “drip” campaign. Either way, pulses are simple, quick, and wide-ranging. For example: Are you getting enough sleep? Have you met recently with your manager to discuss goals and expectations? Do you have a clear sense of your career path? Are you getting enough challenge and motivation and energy—are you feeling “in the zone”?”
▸ 3 evidence highlights
Structural Vulnerability
Zombie OKRs Die Without Weekly Check-ins
situational“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.”
▸ 3 evidence highlights
Implementation Tactic
Subjective Self-Assessment Rescues Raw Scores
situational“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?)”
▸ 3 evidence highlights
Implementation Tactic
The OKR Shepherd Forces the Flock
situational“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: From: Jonathan Rosenberg Date: Thu, Aug 5, 2010 at 2:59 PM Subject: Amidst boundless opportunities, 13 PMs whiff on OKRs (names included) Product Gang, As most of you know, I strongly believe that having a good set of quarterly OKRs is an important part of being successful at Google. That’s why I regularly send you notes reminding you to get them done on time, and why I ask managers to review them to make sure all of our OKRs are good. I’ve tried notes that are nice and notes that are mean. Personal favorites include threatening you with Jonathan’s Pit of Despair in October 07 and celebrating near perfection in July 08. Over time I iterated this carrot/stick approach until we reached near 100% compliance. Yay! So then I stopped sending notes, and look what happened: this quarter, SEVERAL of you didn’t get your OKRs done on time, and several others didn’t grade your Q2 OKRs. It turns out it’s not the type of note I send that matters, but the fact that I send anything at all! Names of the fallen are duly noted below (with a pass given to several AdMob employees who are new to the ways of Google, and to many of you who missed the deadline but still got them done in July). We have so many great opportunities before us (search, ads, display, YouTube, Android, enterprise, local, commerce, Chrome, TV, mobile, social . . .) that if you can’t come up with OKRs that get you excited about coming to work every day, then something must be wrong. In fact, if that’s really the case, come see me. In the meantime, please do your OKRs on time, grade your previous quarter’s OKRs, do a good job at it, and post them so that the OKR link from your moma [intranet] page works. This is not administrative busywork, it’s an important way to set your priorities for the quarter and ensure that we’re all working together. Jonathan”
▸ 3 evidence highlights
Strategic Maneuver
Two Baskets: Committed vs. Moonshot
situational“Two OKR Baskets Google divides its OKRs into two categories, committed goals and aspirational (or “stretch”) goals. It’s a distinction with a real difference. Committed objectives are tied to Google’s metrics: product releases, bookings, hiring, customers. Management sets them at the company level, employees at the departmental level. In general, these committed objectives—such as sales and revenue goals—are to be achieved in full (100 percent) within a set time frame. Aspirational objectives reflect bigger-picture, higher-risk, more future-tilting ideas. They originate from any tier and aim to mobilize the entire organization. By definition, they are challenging to achieve. Failures—at an average rate of 40 percent—are part of Google’s territory. The relative weighting of these two baskets is a cultural question. It will vary from one organization to the next, and from quarter to quarter. Leaders must ask themselves: 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? Are we in survival mode, or is there cash on hand to bet big for a big reward? What does our business require, right now?”
▸ 3 evidence highlights
Mental Model
All Green Means You Failed
situational“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.”
▸ 3 evidence highlights
Relationship Leverage
Sacred One-on-Ones as Culture Infrastructure
situational“Every two weeks, each person at Zume has a one-hour, one-on-one conversation with whomever they report to. (Julia and I converse with each other.) It’s a sacred time. You cannot be late; you cannot cancel. There’s only one other rule: You don’t talk about work. The agenda is you, the individual, and what you are trying to accomplish personally over the next two to three years, and how you’re breaking that into a two-week plan. I like to start with three questions: What makes you very happy? What saps your energy? How would you describe your dream job?”
▸ 3 evidence highlights
Implementation Tactic
Sell Your Reds, Don't Hide Them
situational“Shortly after arriving, Art held a full-day, off-site business review for the Lumeris leadership team. Now it’s on the company’s monthly calendar. When our top-line OKRs are projected on a screen, it’s clear to see which leaders are making their objectives. Art doesn’t like yellows, so every OKR is either green (on track) or red (at risk). There’s no bell-curve ambiguity, no place for problems to hide. The reviews run for three hours, with a dozen senior executives taking their turn. Little time is spent on people’s greens. Instead, they “sell” their reds. The team votes on the most important at-risk OKRs for the company as a whole, then brainstorms together as long as it takes to get the objectives back on track. In the spirit of cross-departmental solidarity, individuals volunteer to “buy” their colleagues’ reds.”
▸ 3 evidence highlights
Capital Strategy
Internal Turnover Beats External Attrition
situational“For a service business, nothing is more valuable than engaged employees who feel they can make a difference and want to stay with the organization. Turnover is costly. The best turnover is internal turnover, where people are growing their careers within your enterprise rather than moving someplace else. People aren’t wired to be nomads. They just need to find a place where they feel they can make a real impact.”
▸ 3 evidence highlights
Mental Model
10x Reframes the Problem, 10% Optimizes It
situational“The way Page sees it, a ten percent improvement means that you’re doing the same thing as everybody else. You probably won’t fail spectacularly, but you are guaranteed not to succeed wildly. That’s why Page expects Googlers to create products and services that are ten times better than the competition. That means he isn’t satisfied with discovering a couple of hidden efficiencies or tweaking code to achieve modest gains. Thousand percent improvement requires rethinking problems, exploring what’s technically possible and having fun in the process.”
▸ 3 evidence highlights
Risk Doctrine
Manager-to-Leader Transition Blindspot
situational“Early on in your career, when you’re an individual contributor, you’re graded on the volume and quality of your work. Then one day, all of a sudden, you’re a manager. Let’s assume you do well and move up to manage more and more people. Now you’re no longer paid for the amount of work you do; you’re paid for the quality of decisions you make. But no one tells you the rules have changed. When you hit a wall, you think, I’ll just work harder—that’s what got me here.”
▸ 3 evidence highlights
Strategic Maneuver
Divorce Compensation from Goal Scores
situational“A data-driven summary of what someone has achieved can be a welcome antidote to ratings biases. And since OKRs reflect a person’s most meaningful work, they’re a source of reliable feedback for the cycle to come. But when goals are used and abused to set compensation, employees can be counted on to sandbag. They start playing defense; they stop stretching for amazing. They get bored for lack of challenge. And the organization suffers most of all.”
▸ 3 evidence highlights
Structural Vulnerability
Stretch Snaps If Imposed from Above
situational“Stretch Variables To succeed, a stretch goal cannot seem like a long march to nowhere. Nor can it be imposed from on high without regard to realities on the ground. Stretch your team too fast and too far, and it may snap. In pursuing high-effort, high-risk goals, employee commitment is essential. Leaders must convey two things: the importance of the outcome, and the belief that it’s attainable.”
▸ 3 evidence highlights
Strategic Maneuver
Watch Time Not Views: Pick the True Currency
situational“When users spend more of their valuable time watching YouTube videos, they must perforce be happier with those videos. It’s a virtuous circle: More satisfied viewership (watch time) begets more advertising, which incentivizes more content creators, which draws more viewership. Our true currency wasn’t views or clicks—it was watch time. The logic was undeniable. YouTube needed a new core metric.”
▸ 3 evidence highlights
Mental Model
Lateral Linking Beats Cascading Down
situational“Having goals improves performance. Spending hours cascading goals up and down the company, however, does not. . . . We have a market-based approach, where over time our goals all converge because the top OKRs are known and everyone else’s OKRs are visible. Teams that are grossly out of alignment stand out, and the few major initiatives that touch everyone are easy enough to manage directly.”
▸ 3 evidence highlights
Competitive Advantage
Transparency as Peer Accountability Engine
situational“Research shows that public goals are more likely to be attained than goals held in private. Simply flipping the switch to “open” lifts achievement across the board.”
▸ 3 evidence highlights
Mental Model
CFRs Are the Sinews, OKRs Are the Bones
situational“That transformational system, the contemporary alternative to annual reviews, is continuous performance management. It is implemented with an instrument called CFRs, for: 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 improvement Recognition: expressions of appreciation to deserving individuals for contributions of all sizes”
▸ 3 evidence highlights
Strategic Pattern
Stretch OKRs Trigger Infrastructure Resets
situational“Susan: Aspirational goals can prompt a reset for the entire organization. In our case, it inspired infrastructure initiatives throughout YouTube. People started saying, “If we’re going to be that big, maybe we need to redesign our architecture. Maybe we need to redesign our storage.” It became a prod for the whole company to better prepare for the future. Everybody started thinking bigger.”
▸ 3 evidence highlights
