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JASON SCOTT: Hello, everyone.
My name is Jason Scott, and I am leading Google's Startup
Developer Ecosystem here in the United States.
But today, I'm going to take you through OKRs
and why objectives and key results
are so near and dear to my own heart.
So a little bit about me--
I've spent a lot of time in startups and venture
here at Google.
And the one saving grace always for me and my team
was having clear, measurable objectives and key results that
really teased out and pulled out the most in terms of the impact
that we were able to have on ourselves and on our startup
ecosystem, but also provided clarity for all of us.
And so I'm hopeful that, through this workshop today,
each of you will give OKRs a try, whether you've tried them
before or not, and hopefully pull away
a couple of tips and tricks that might help you along
in your journey.
So the OKR methodology-- for those of you who don't know,
OKRs stand for Objectives and Key Results.
And they've been part of Google since the beginning.
And they've been a great way for our teams to really, again,
maintain that focus, but also optimize our productivity.
And so taking you through who and why around OKRs--
the who-- who's your audience for OKRs?
For us, these can be your advisors--
so really helping your advisors, if you're a startup founder,
know how to help you and when to help you
and how to really focus their time.
Of course, you and your teams--
so not just you as a leadership team, but also
all of the teams throughout your organization,
really helping them understand why their work is important
and how it aligns your overall company objectives and goals.
But also, one that people often forget is your investors.
Many of you probably send monthly, quarterly investor
updates.
And it's really awesome, similar to your advisors,
as an investor to receive a list of, hey, here
are the things that the company has found important
and are prioritizing for this period.
And here are ways that I can focus my help for them,
bring out my Rolodex and connect them with someone,
or also bring out my experience and really
support them in a specific way.
And when you're setting the why of OKRs,
think about the discipline of your thinking.
So OKRs really are about allowing for your team
to have disciplined thinking around specific goals
that they want to accomplish.
It allows you to communicate accurately as a leader
and really say, hey, these are the things that are important,
and here's how we're going to measure the success
in achieving those things.
Similar to that, establish clear indicators
for measuring progress.
And so there's no ambiguity around how
we're going to measure our success
and did we achieve this objective.
And then, of course, focusing your efforts.
Many of you, potentially CEOs and CTOs and CXOs
across your organization, you probably
are known, as many of us are, for chasing
bright and shiny objects and maybe
causing a little bit of distraction amongst your team.
So OKRs can really be a way for you
to not just focus your own efforts,
but focus the efforts of your team around clear objectives
that you set earlier in that quarter or in that half
and make sure that you maintain that focus
throughout the period.
So objectives-- if you're setting an objective,
the one thing you should always know is that objective should
answer--
what are you trying to accomplish?
They should be meaningful.
They should really be inspiring.
So think about your new intern, fresh out of undergrad
or university, has never had a job before-- they should know
why the work that they're doing is meaningful
and what is the purpose behind it
and what is the impact that you as a company
and their work as an individual is having on the world.
They should be ambitious.
I tell all of my founders that if your OKRs do not
make you feel uncomfortable and if you feel that you can
confidently say, hey, we can achieve this this quarter,
then you're not setting ambitious enough goals
for the time period.
You should really set goals and OKRs that
make you feel somewhat uncomfortable
and make you question-- can we do this?
And then, lastly, the objective itself should be qualitative.
You don't want to put a roof on an objective because--
who knows?
You're still running an experiment
to understand-- what are your bounds?
What is your team capable of?
And so the last thing you want to do
is unintentionally sandbag your objective
and set an objective that your team knocks out of the park.
You want to make sure that you set an objective that
has more of a North Star and is a directional versus having
a quantitative ceiling to it.
So for those of you who like formulas like myself,
there's a simple, foolproof formula
that I always tell my founders.
If you're having trouble writing your first objective,
follow this formula, and I haven't yet
seen someone fail at it.
The formula itself will answer-- what do you want to do?
And it will be a broad, qualitative goal.
But it takes a very simple format.
You're going to have a verb.
You're going to have the what that that verb's acting on.
And you're going to say the why.
Why is this important?
Why is this, out of all the things that we can be doing,
a top 2 to 3 priority for our startup?
An example is "increase."
So that's your verb.
What are you going to increase?
The number of legacy customers migrating from on-premise data
centers to public cloud.
And the why-- why is it important?
In order to improve reliability.
This is clear, this is concise, and everyone understands
what your North Star is and why it's a top 2 to 3
priority for your company.
On the key results, however, they
should be quantifiable, measurable milestones.
They should lead to an objective, unambiguous grading.
And so last thing you want is some sort
of ambiguity within how are we going to measure the success,
or did we achieve this.
They should clearly make the objective achievable
or be your best hypothesis for this experiment.
So if you're thinking of your OKRs as an experiment,
like what are we capable of, what
levers will lead to growth for our company,
then they should be your best guess, your best
hypothesis in answering-- are we clearly making
this objective achievable?
And then, lastly, we all fell victim to this.
Your OKRs, and your KRs specifically,
should never be a list, a to-do list.
They should never be tactics.
They should be focused on the impact.
They should be focused on the metric, the high-level metric,
the top-level metric that will lead
to answering the question-- did we achieve this objective?
So bringing back our formula--
again, your key result is a quantitative statement
that measures the achievement of the objective
and will really answer the question-- how will we know
when we've met our objective?
So simple, foolproof formula there.
You're going to, again, have a verb, so
in this case "increase" again.
What are you looking to increase?
Public cloud-only customers.
But the one difference here is you're
going to have a threshold.
You're going to say--
where did we start, and what is the level of stretch
that we're trying to get to?
And so, in this case, from x to y, from 350 to 600.
Why is it important?
Well, a couple things-- one, you always want to be explicit
around where you're starting because--
you're in a startup.
You're in a company.
Things change.
People move.
People inherit OKRs all the time.
They come in in the middle of the quarter.
They come in for an internship.
And so you want that clarity to save you time.
The last thing you want is for someone
to have to ask a question like where did we start
or where are we coming from and what is our baseline.
Two, you always want to show that level of stretch
because you always want to then return to yourself
and say-- how does this make me feel?
How uncomfortable am I right now?
Do I think this is a little bit-- causing
a little bit of discomfort?
Are we able to achieve this clearly,
or is this going to be a stretch goal for my team?
Because ultimately, you want to make sure
that you are stretching your team
and, again, seeing what your team can accomplish.
You never want to stand back.
So defining your OKRs--
I often start with myself, honestly.
And I think our personal OKRs-- we're coming
right out of the New Year.
New Year's resolutions can oftentimes be OKRs.
And so I'll use a common example just to make it simple for you
because OKRs should be simple and you should never
feel caught up in the complexity of semantics or word choice.
You should really focus on what you're trying to achieve
and how you're going to measure the success of that.
And so-- very simple sentence, if you like the sentence
structure.
I often say "I will," so what is my objective,
and then how will I measure it?
So I will achieve blank, as measured by x.
And those x is your key result. And then this
makes sure that you don't include
what we call our activities or our initiatives,
our to-do list, in the objective or the key result.
So an example-- playing off of New Year's resolutions--
I will-- what's my objective?
Get back into shape in order to be healthier for my longevity,
as measured by a decrease in body fat from 5% to x.
I left off the x in this case because no need
to know where I'm starting from in this case.
But you always want to have a baseline where
you're trying to get to--
I'm sorry-- a baseline, and also where
you're trying to get to-- so in this case,
decrease in body fat of 5%.
And then your activity-- your to-do list-- one of the ideas
could be run 5 kilometers every week.
But what you aren't doing by including your to-do list
separately is limiting people's options
on how they're going to achieve the objective.
Because there are a million different ways
that I can creatively achieve my key
result if you are not being prescriptive
around the to-do list and the action
and the activity around that.
So bringing it back to startups, you can say--
hey, we really need to increase our--
improve our customer experience in order to drive retention
and increase our NPS.
And so an example could be--
I will improve our customer experience
in order to drive retention of those customers,
as measured by an increase of our NPS, our Net Promoter
Score, from 70 to 80.
And that could be your key result.
The activity-- one of the activities
could be implement an in-app live chat.
But see-- what I didn't do by not being prescriptive
around that activity is that I allowed
for my team, my reports, to figure out how
they want to increase our NPS.
Because what we really care about is increasing our NPS.
We don't really care about creative ways to do that,
as long as those are sustainable, legal,
and ethical.
However, you want to leave some room for your employees
to be able to be creative and have
that autonomy and that agency in figuring out
how to achieve that KR.
So overview-- again, if you forget everything
that I said before, make sure you just remember this slide.
Your objectives are going to answer
what do you want to accomplish.
They're going to be qualitative.
And they're going to be ambitious, meaningful,
and inspiring, again, for that fresh-out-of-university new
hire that you hired last week coming in to their first job.
And a pro tip--
you always want to watch out for weasel words
in your objectives.
Weasel words are defined as words that are
ambiguous in what they mean.
Because the last thing you want to do
is introduce an OKR, an object, that introduces the ambiguity.
So when I ask you-- when I see a founder including words
like "efficient" or "effective" or "sustainable," I
always ask them-- what do you mean by that?
How do you measure efficient?
How do you measure effective?
How do you measure sustainable?
Let's be as specific as possible in what we're trying to achieve
and what that North Star really is.
On the key results side, again, you
want them to be observable, quantifiable, and lack
ambiguity in terms of the outcome
and how you're going to measure the achievement
of that outcome.
And they should ultimately answer the question--
how do we know if we've succeeded
in achieving our objective?
Or what is our best hypothesis in this experiment of OKR
that will answer that question?
And a pro tip--
many of you, particularly in technical roles,
will have milestone KRs.
We call them milestone KRs.
Maybe we want to launch this app or we
want to release this push notification.
What I will ask you to really think about
is how can you remove the binary outcome
and introduce something that is going to measure
the quality of that output.
Because if you just say release a push notification--
I as a new hire could say, OK, I can do that.
I can do that today, actually.
But what you really want to also do--
what you're trying to drive is maybe
your customer satisfaction.
Or maybe you're trying to drive downloads.
So your KR should really be that measurable outcome of success,
not just the binary action that you're trying to achieve.
Then lastly, make sure that you are scoring your OKRs.
And a lot of people sometimes set it and forget it.
So never fall victim to that.
And most, most importantly, which we haven't touched on,
OKRs should always be not directly connected
to individual performance, performance evaluations,
compensation conversations, because--
think about this logic again.
We'll take the example of the fresh-out-of-university student
that you just hired last week.
If you told me--
set your OKRs, and those OKRs will
be what we look at for your end-of-year performance review.
Then, ultimately, I'm going to set OKRs
that I know I can achieve.
And I'm going to set OKRs that I know I can actually knock out
of the park.
And so, ultimately, that eliminates the drive
within that individual to really set
things that are stretch goals for themselves.
And so what you really want to instill in people is this--
hey, we're setting these OKRs because we
know that they are stretch.
And we know that we are going to test
how much can we really achieve and what can we really
do as a team.
We're not going to sandbag.
And so, of course, the sweet spot
that I say for scoring of your OKRs
is in that 60th to 70th percentile.
That's when you know that, if you're
scoring kind of in the 0.6 or 0.7
on your quarter or half OKRs, then you
know that you're stretching your team enough where they still
feel like the work they're doing is meaningful and important,
but, at the same time, not going to remove their motivation
by setting something that is a little bit too out of reach
to achieve from the start.
And, of course, how you're setting OKRs--
just make sure you don't have too many objectives.
You can never have more than two or three priorities,
I would say, as a company-- or as a top priority.
At that point, it doesn't become a top priority.
As a bigger company, maybe three to five, but as a startup,
I would say two to three.
Work bottom up and top down.
OKRs should really have that buy-in from everyone.
And everyone should feel like they have some agency in that.
And, honestly, as a leader, you don't
know what your blind spots are.
So you want to make sure that you allow for other people
to set what they think their objectives
and key results should be.
And then you have that reconciliation conversation,
where you align and understand what blind spots they have,
in terms of maybe investor conversations or leadership
conversations, and what blind spots have
because you're not in the day-to-day weeds.
And then, of course, leadership buy-in is key.
If you as a leader don't believe in OKRs,
there's no way that your team is going to believe in OKRs.
And avoid the common pitfalls of miscommunications of stretch
goals, business-as-usual OKRs, if there are things that
you're just actively, passively measuring always--
I test you to really think of what is important now
today as something that is not just a passive KPI that we
always measure, but something that truly
is an important, relevant, timely objective
that we have for this quarter or this half.
Avoid sandbagging, which we've talked about,
and low-value objectives.
And then, of course, avoid insufficient key results.
Allow for a few different ways, potentially,
to achieve that objective.
And, most importantly, if you remember nothing else,
make sure your OKRs are ambitious,
make sure they're measurable, and make sure
they're transparent.
And if you're continuously getting a 1,
you're not crushing it.
You are sandbagging.
And I will always ask you--
can you do more?
And could we have done more?
Thank you.
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