Rick Klau, Google: OKRs (Objectives and Key Results) - How Hyper-Growth Startups Stay Focused

all right everyone good morning thank you so much for coming out to our first session of the day here in Anderson I'm really excited to introducing our first speaker rick Clow rick leads the partnerships team at GV where he connects the largest companies in the world to G V's portfolio he was previously a product manager at Google where he led product initiatives on blogger Google+ and YouTube his professional experience includes leadership roles at several software and internet startups he was an early employee at Feedburner where he ran the publisher services team until Google acquired the company in 2007 outside of his love for technology Rick is also a political junkie he lent he has lent technology advice to three u.s. presidential campaigns ran the campaign blog for President Barack Obama in his 200 2004 Senate race and ran product strategy for and managed Google's presence at the Democratic National Convention in 2008 everybody welcome Rick thanks Eric and apologies for you know not being dressed up I was telling Jeff just before this I'm in the midst of moving and all of my stuff is in boxes I have no idea where my good clothes are but I had this on for Game four I figured it was available where for Game five hopefully will close out strong tonight so I'm here to talk about a topic that is largely an accident that I'm the guy to talk about and that's a little embarrassing given the actual subject which is all about sort of picking your spot and delivering on your goals so I'm gonna tell you a little bit about why I'm the one talking about objectives and key results and then walk you through some of the things I've learned working with startups in my role at GV over the last five years and then some of the time I spent at startup as prior to that my hope is that I've got just a handful of slides let's make this as conversational and interactive as possible I would like for us to answer your questions more than I get to the end of my slides that's always for me and accomplishment so let me just walk you back a few years and explain the accident so in my first role at Google Ventures I ran something called startup lab not unlike what true University is doing over the course of two days we did and through these periodic workshops that we would do for startups in the Google Ventures portfolio and over a series of a couple of months a number of startups in our portfolio were asking us about not necessarily for objectives and key results okay ours was not really a well known topic at the time but kind of broadly how do we set goals how do we keep the teams aligned how did Google do this in the early days and we GB knew that the answer to that was always the same which was well Google used something called objectives and key results a topic that had been introduced by John Doerr from kleiner perkins back when Google was less than a year old and that continued and really helped set the stage in the foundation for how Google kept its teams aligned and grew and managed through this hyper growth phase from 1998 all the way through to at the time to 2012 was when I gave the talk so my role in running the startup lab at GV was to go and find the right person to come and give a talk about whatever the subject was so if it was about how to build and scale your product teams I got Ken Norton at the time of p.m. Google before he came over and joined me at Google Ventures if it was crisis communications I would get somebody from the SRE team at Google to talk about you know when when Gmail went down what do you do how do you manage internal communications and get somebody from the comms team to talk about how you set expectations on the outside for okay ours it was such a mundane topic that it didn't feel like I should waste the bullet on somebody important to come and talk about okay ours so I just said well look I'll do it and at the time we were just doing these privately you know in rooms about 1/10 of the size of this and then we would livestream them to people in the portfolio then we made the video public and the funny thing happened first of all if I'd known that anybody was going to have watched this video two things one I would have made the slides look a hell of a lot better and two I would have made it really short instead it was an hour and a half long and and then you see here as of last night it's been watched over three hundred thousand times YouTube gives you this really handy analytics interface that you can see that I have wasted seven years of humanity having people listen to me talk about okay ours and I am now adding to that waste of humanity by all of you times an hour so I apologize in advance so one of the things I have decided to do is that instead of being the accidental okay our guy where I just sort of backed into this as the look I'll do it because I don't want to waste anybody importance time and now four years later I have worked with hundreds of startups all over the world many in our portfolio but also all over the globe where they look we watched your YouTube video we now want to do this we have some questions and now I'm the guy who has talked about this and worked with a lot of teams to try and work through a number of issues that they've had so two things one I'm actually setting a goal at the outset right which is important talk about why in a moment and two instead of really boring slides like the ones that I used the last time I'm giving you my vacation pictures of national parks I have visited over the last several years so that at the very least you have something pretty to look at while I drone on about goals and objectives and key results so my goal is I want all of you to actually commit to using this or something like it within your own companies for at least two quarters and that's a really important aspect of this it's not something you just try after a month give it up and move on so let's talk about what ok ours are first of all and then I'm going to talk about a few of the things that I think are the common objections that I hear from startups about why they shouldn't or couldn't do them and then I'm going to talk about a few of the things about what makes the work inside of startups and hopefully we'll get questions and make this interactive so first and foremost ok arts objectives and key results they are two components they are goals that you are setting within your organization that are set quarterly and we can talk about everybody wants to think that maybe their time period might be different but we'll talk about that and these goals create alignment across the organization now many of you are hearing that and looking at that and saying well gee that seems pretty simple and that's actually one of the benefits is that this is really really simple in fact one of the ironies of becoming the OKR guy through this video and then having a lot of people reach out to me is that it's actually you can overthink this it's actually pretty simple too at the top say ok this is what we're gonna do and then these are the these are the metrics that are gonna tell us how we got if we got there and then amazingly enough you actually do get alignment from that we'll talk about how that happens in a moment ok ours this is super important and this really shocked me in my first days at Google now nine years ago ok ours are public within the organization when I say public I mean public within the company you're not putting this on the company blog or tweeting out you know your company's goals because sometimes these are competitive advantages right the milestones that you want to set for your organization everyone in the company needs to know what those goals are and I say this took me by surprise when I joined Google I joined in June of 7 so almost exactly nine years ago and the first day got my laptop got my training got my login and was stunned that I had access to basically every single piece of internal information at Google I could look at query volume by company country I could look at what Gmail's daily active user numbers were I could see what Larry and Sergey ok ours were and it had a really amazing impact I was sure by the way they'd made a mistake and that they turned it off the next day so I was in a hotel room and I didn't go to bed because my guy god I get as much as I can before they turn this off by sharing this inside the organization you are communicating to the company what actually matters most to the founder to the CEO to the leadership team and then out and it trickles out let's talk real quickly about what okay ours are not probably the single biggest mistake I see companies make is that in their minds okay ours are really a to-do list I walked into one of our portfolio companies about a year and a half ago and I said no yeah yeah we've already got something like okay ours and it's right here and on the whiteboard was literally a checklist and it was the quarters to-do list for the entire team and I said okay well so how do you know at the end of the quarter when all of those things are checked off that any of it mattered they said well but that's this is what we want to do this is at the end of the quarter if we've done all of that it'll be great well how will you know and they didn't have an answer for that however at the end of a quarter where they checked ten of the twelve things off it felt a lot like progress but they had no way to know if those were the things that actually matter so it's critical that when you think about okay ours in setting these goals and then finding the key results that define success for those goals that you are not treating this as a shared company-wide to-do list another really important mechanism and this is more for companies as they mature and get a little bit bigger and you start doing more formal performance review processes companies often try and combine these things that if an employee says I will do X I'll grow the products usage to a million seven day active users and then they got to 600,000 that's 60% of the goal so if our it's Bonus Time and we look at your okay ours for the last year well you got sixty percent of the way there so 60% of your bonus here you go well this creates a really odd dynamic within the company which is you want people to be shooting for the stars right google talks a lot about moonshots and thinking ambitiously well you can't expect your employees to set really ambitious goals if you are penalizing them if they come up at all short all right if you get to 60% of a million you get to six hundred thousand seven day active users and you were at ten thousand the year before that's astoundingly great but if the employee wants their bonus which presumably they do they're gonna set very realistic very achievable goals so you want to decouple the process of setting goals and measuring success from the performance review process now they can be an input but you cannot have them just be the same thing and then finally you don't want to tell people how to do a thing you want them to tell you you want to tell them what you expect them to accomplish and that's a really important distinction okay ours are a great way to define what success will look like but then leave it up to the team to get creative so let me dig into this a little bit when I when I talk about an ambitious aggressive goals I'll give you an example I was running blogger this was several years ago and we were having an issue we were noticing that latency outside of North America was a tremendous issue anybody coming in from Asia in particular we're seeing not just millisecond delays but often seconds of delays in loading pages we know speed is a feature at Google so we had a theory that if we could reduce latency we would increase pages in Asia and that would drive increased traffic and engagement across the product now the traditional way to set goals is to say we want to make this ten or twenty percent better because that feels achievable at the beginning of a quarter you can get incrementally better but the okay our way of thinking is instead to say what would really aggressive makes me feel uncomfortable success look like and then we'll work backwards to try and figure out how to get there so our okay are for that quarter for blogger was to reduce latency by ninety percent which was not technically possible by just doing incremental progress we knew it no matter what we could we could multi-home the the places where the the data actually lived we could tune the database calls we could do things that would make it incrementally better but no amount of one two five ten percent benefit would get us to ninety percent so we set the goal without any idea how we'd accomplish it but we knew if we could get to ninety percent it would be fantastic by not telling our engineers how to actually get that ninety percent number it freed them up to think creatively about what they might be able to do that would achieve really ridiculous success and in this particular case pong came up with a then crazy idea which was to serve all of bloggers just doing over a billion pages a day way back when out of RAM which was a really expensive surprisingly difficult thing to do but he's like I think if I can do that then it'll fix our latency problem and he did and he was right and we didn't reduce latency by ninety percent we reduced it by about 96 percent so the mistake you make if you set goals and be very specific about what you expect the team to accomplish is that best you will only get that much if instead you free the team up to think very creatively with a very aggressive goal you're giving them room to get creative and it's important not to use okay hours as the how instead it's it's what do you want to accomplish so one mistake I made in the video I that if you do go back and watch and at least use the YouTube you know watch it at double speed so you don't take an hour and a half is that I talked about setting individual okay ours ignore them just think about setting at the company level and in it the department level or the team level I we can talk more about that but I think just for purposes of this let's just say ignore the individual levels and think about it the company level and at the team level now I'm gonna tell you a quick story you heard from Eric I came to Google through the Feedburner acquisition Dick Costolo was my boss he was the CEO at feedburner at the time then went on to run Twitter for a while biggest lesson I took away from feedburner has to do with this in it and it's what are we not doing I was head of publisher service as a feed burner my job was to go out and get all the feeds and so feed burner syndicated RSS content whether that was for news sites blogs podcasts and it was my job to work with publishers to then take their feeds in and syndicate them and build an ad platform on top of it in an early trip to New York City I had a meeting with American Express who was not what you would think of as a traditional news publisher but they wanted to work with Feedburner and even better they wanted to pay us about 30 grand a month to take their RSS content that they were using for email marketing and then syndicate that out now feedburner at the time had zero dollars of revenue so I thought coming back from New York I was a conquering hero right I've got a six-figure deal this is fantastic and dicks immediate response was no that's not the business that we're building until we know whether the business we're building works or not we shouldn't distract ourselves with this other thing okay ours are a way for you to say what you are doing but by definition anything that is not an objective for the company in that quarter you are not committed to right this is a way to give your team permission to say look we have agreed these are the things we want to try and accomplish this quarter so anything now on the list we are not focused on it doesn't mean it's a bad idea it just means it's not something we're focused on right now okay here are a few reasons why this won't work here are some objections I'm going to anticipate some of you have had one you're too small all right if you're an early team you're three five ten people this is just weighing you down it's just it's gonna be it's gonna be too much work I've seen teams of three four and five benefit from this if only to have the conversation early on about what are those one two or three main goals that you're trying to achieve is remarkable if you don't actually have the forcing function of what is it you're trying to accomplish everyone has subtly different definitions of what it is they're trying to do or assumptions baked into well I and my team are gonna do this and I just I assume that you're working on that thing that's going to help me and if you don't actually have the conversation that bubbles it up you may find that you are working on very different projects okay we'll talk about the quarterly cadence I've had a lot of teams insists that they need monthly I even had one that they said oh we need to set our goals weekly this is where I think it's a difference between what are we going to do to make progress over the next week the next month versus what do we really want to accomplish in some period of time the reason I like the quarterly cadence is that it gives you an appropriate amount of time to work on something sufficiently ambitious to then give the team room to experiment and iterate if you're setting goals on a monthly basis it's just a few weeks it's hard to see major milestone accomplishments in you know two three four weeks that said I've seen some teams work at this pace think on the it's a marathon not a sprint theory it can be hard to sustain that amount of major progress over that short a period of time and then I hear this a lot the you know well this is just process this is you know Dilbert TPS reports that sort of thing remember at the very beginning I said this you don't you don't want to overthink this this should just be maybe a couple hours total in a given quarter this is not very heavyweight and I'm going to talk very tactically about how to think through what an objective is and what key results are I just wanted to set a foundation here but it really is not process I've seen people build out Gantt charts and big complicated spreadsheets I think that's way too much thought going into this at a CEO in our portfolio actually asked me about this he was worried about what if I say to my team we're going to accomplish X and we don't like won't I look wrong incompetent when I look like I don't understand what it is we're building actually that's not been my experience if anything transparency builds confidence among the team that you're willing to experiment and accountability to the results is equally important that the team feels like look everyone is equally accountable and we're owning up to both our successes but our failures okay key results so let me take a step back you've set as a team one two or three no more than three high level objectives and these are goals that should be ambitious that define what tremendous success would look like for your organization in that quarter what you want to avoid our key results so the key results are just the numbers that reflect the accomplishment of that goal okay if you don't use numbers and you don't use metrics and you use more binary terms like decide on what we're going to do with v2 of the product or launch the next generation of our interface or improve something right make Gmail better oh now you're introducing subjectivity into the evaluation of whether or not you actually made any progress your goal should be that you could grab somebody off the street sit them down and say three months ago we all agreed that we were going to get Gmail to a billion 30-day active users and the person off the street that's Abel okay so that's what you said the beginning of the quarter what you get like we got six hundred million okay you got sixty percent introducing objectivity into the evaluation of whether or not you achieved that objective takes politics and favoritism and negotiation out of that accountability everyone agrees look look we're gonna look at metrics the metrics are going to drive whether or not we believe that we achieved the objective that we set out to do my partner at I mentioned earlier Ken Norton at G V talks about this a lot that when he would be setting okay arse for his teams he would get in the habit of just simply asking and then what the team would say we want to do X and say all right well and then what and keep asking to tease out what is the thing you're trying to actually accomplish what is the what is the the big idea and at the end of that process you will likely have identified the thing you actually care about so don't say you want to launch a product you're launching a product presumably because there's either a new market segment you're trying to tackle or there are usability issues with the prior version that you're trying to fix or there's engagement issues that you're trying to improve whatever the case is you're gonna tease that out and then you want to find the numbers that reflect whether you accomplished that or not okay when okay ours are actually working inside of your organization first and foremost failure becomes it's a feature it's not a bug all right I've seen people talk about in Silicon Valley we celebrate failure I I don't I don't feel good when I fail but I do learn from it and I do like seeing teams that see failure as a successful outcome in that it becomes data that informs future decision-making you said you were gonna do X you didn't actually do X what did we learn as a result of that well that's useful information because that will inform our future okay ours where we can say look at least given similar circumstances when we tried that before it didn't work and here's what we think we learned as a result of that so you embrace failure you learn from it you don't stigmatize it I've talked to people since I joined Google who marvel at the fact that every quarter Larry and Sergey now now sundar at Google stand up in front of the company and say okay here's here were the ok hours for last quarter and I'm gonna give each individual owner across divisions and they're gonna say how they did on those ok ours and when they really failed they got a zero we'll talk about scoring in a moment they owned up to it and they explained what they learned that they didn't know at the beginning of the quarter and then how that informs the next set of objectives are they punting or are they taking what they learned and making adjustments in calibrating to what they can accomplish in the next quarter when I say okay always give you superpowers I'm really thinking about two specific things here one is as a team you learn how to predict the future and that's a pretty powerful feeling within a start-up all right you're trying to will something into existence you are trying to create something that does not exist today in setting in okay are at the beginning of a quarter you are saying we are going to accomplish something we are going to do something and if it's sufficiently ambitious if it's really aggressive going into that quarter you should have a pit in your stomach because you don't know how you're going to do that thing right rational sensible normal people ie those who don't work at startups would look at that objective and say there's just no way Facebook could do that in a week Google tried that and it didn't work I heard apples got a thousand people trying to do that but you look at that and as a team you all say yeah you know what we think if enough things go our way we could do that and the first time the team sets their mark and looks out 90 days and says we believe we can do that and then at the end of the quarter you look back and you did you feel invincible and the team gets this sense of accomplishment from having pulled off something highly improbable and then believes they can do it again and it becomes a muscle that you start exercising and you do it again and again and again so the other and this is particularly for the founder of CEOs in the room you get the ability to be in every single room where every decision is made without actually being in the room and here's what I mean by that when you set your objectives at a company level you are saying for this quarter the most important thing for us as a company one two three and here are the numbers that are going to reflect what successfully accomplishing those objectives look like and then each of your team members product engineering ops finance whatever else depending on how large you are listen to those one two or three objectives and then within themselves say okay for me on product here's what I believe the product team's three objectives need to be and by extension four through 12 are the things we're not going to be focused on and the same happens for engineering the same happens Rob's and there's a calibration now that has happened so now fast forward two three four weeks into the quarter and product is hung up on some question that they're trying to wrestle with without the CEO being in the room everyone at that table knows what is most important to the company for that quarter everyone at that table knows exactly what the founder and CEO is trying to accomplish and is most focused on that quarter so as they're hashing out do we do X do we do Y there is agreement there is a fluency in what the company has committed to that they can now start to say well if the founder was in the room how would she look at this decision to make and 90% of the time given consistency of what those objectives are in the understanding of those objectives and an understanding of what metrics we care most about you're going to know what she cares about you're going to know what she would do yeah you're right now that's not a hundred percent of the time but you've just done is eliminate 90% of the escalations to the CEO in the room at the time that the decisions being made and now the founder and CEO gets time back where she can be out raising the next round can be working scaling up engineering or whatever it else whatever else it is that she's focused on for that quarter I'm gonna pause there I realize I did not go into the tactical of how do you actually set ok hours up and I'm happy to do so I always know getting room some people have already worked with okay ours others haven't I wanted to give you a broad sense of why I think these matter now I want to pause and see what questions do you have about what I've talked about at the high level do you want to go deep do you do you want to try and apply to your own circumstances let me know what questions can I answer all the way back yeah yes yes this is the squirrel syndrome right where somebody sees a squirrel run by a squirrel and they go and do that and then they stopped paying any attention to their okay ours so I'll repeat the question because I think we're videotaping here so the question is been in situations before where teams start working on the thing that they think is most important that was not what was agreed upon at the beginning of the quarter and now you you you get out of alignment and then is there a reckoning or a calibration that happens at the end of the quarter so let me take a step back I'm gonna come back to that because we I'll give you an example from a company in our portfolio CEO asked me to come in she had me meet with all of her direct reports company at this point was probably about 200 employees and we went it took about three hours they had nothing like okay ours in place and they had the exact situation that you're describing where each team was doing what they felt was most important in that particular period of time with no affordance for engineering really needs me to focus on this because if my product team doesn't focus on this then engineering is going to have code without you know we're not going to ship because product is off you know doing PRDS for some other thing that doesn't connect to where the engineers are spending their time so I went around the room and I asked all of the direct reports I got up on a whiteboard about this size actually and said all right everybody tell me what are the most important things the company is working on right now and in about 15 minutes we had 14 most important things so then I handed out post-its to each of the people I think there were seven not counting the CEO and I gave him each three post-its and I sorry you get to vote on those and pretty quickly three got the most votes so that means 11 mattered to one person in the room were two people but not really anybody else so the first question I asked to that room was okay would you rather know today that in 90 days four through 14 aren't gonna happen or would you rather be surprised at the end of the quarter when you think that this really matters to the company and then at the end of the quarter it really didn't get very far all right the CFO by the way one of her comments was margin she really wanted to see margin improvement and that got one vote all right I looked at her and I said do you would you like to know now that 90 days from now you will have made no progress on margin or do you want to be shocked 90 days from now and she said well I'm gonna be pissed I said no no I'm not saying you shouldn't be pissed but would you rather be pissed now and then have 90 days to get over it or would you rather find out in 90 days that you know it just didn't come together and she sort of reluctantly agreed that yeah it's probably better to know now because she can then focus her time and energy elsewhere second part of that gets back to your question which is by getting that alignment early each of those teams are tacitly promising each other that yeah this these are the things that are important for my team to work on because everyone else has some dependency so in that exercise we got to the three and the company all some more eagerly than others agreed yep those are the those three things if we can do those three things as a team we will crush it said all right great hold the VP of engineering up all right those are the three things that your CEO and all of you have agreed matter most to the company now as a VP of engineering what are you working on what is what is your team most focused on this quarter in he had about eight Thanks all right cross off the things that don't connect to those three and kind of grudgingly started crossing them off got it down to three and then a really terrifying thing happened he goes I forgot and he grabbed the marker and he wrote number nine Europe and I looked what the hell does that mean I guess we have to launch in five countries because we found out a competitor is planning on launching in Europe as well so we want to make sure we get out first and I looked at everyone else in the room I said okay we're in ninety minutes into this meeting that we've been talking about the most important things to the company and the first time I've heard the word Europe is when the VP of engineering tells me he's got two engineers working on Europe doesn't sales need to be involved New York oh yeah yeah operations have to like light up offices yeah yeah sure won't the CEO be in Europe most of the quarter doing press calls and prep yeah oh my god it hadn't occurred to any of them that Europe was one of those three priorities so we had to stop Syd the VP of engineering down go back and say okay which of those three isn't happening because you need everyone focused on Europe only at that point did that alignment happen where the team actually all understood what everyone else was working on and at one point customer support and operations said well you know what if Europe really is critical and I need to probably get local specialists up and running and trained in whatever languages it is that we're launching well then that thing that I promised probably isn't gonna happen I said that's awesome again better that you know it now then later so the way okay ours work is that you set your goals at the beginning of the quarter look stuff happens you may four weeks in realize there is no way we're gonna hit that goal rather than continue to tilt at the windmill for 12 weeks stop take the zero admit to the rest of the team it's not gonna happen because the sooner you know the better you are now you can take those resources and throw them at something else maybe you can double down and that team can say look instead of doing three things we're gonna do two and that's gonna increase the likely that we're gonna achieve those two the key here back to your question about what happens when teams sort of derail sometimes stopping a thing is is a great outcome because again it's just not gonna happen but that needs to be communicated right the rest of the company needs to know that product is now no longer focused on achieving that thing and there needs to then be a conversation about okay now that we've freed up some amount of time and effort and attention where are we going to focus that on the things that matter most to the company it is most common that that de railing happens at the team level if that's happening at the company level frequently I think that's a bigger problem that help see a question here and then I'll come to Joe yeah yeah so it's a great question and the question is there's the there's some element of you got to keep the lights on right and the trash still needs to get emptied and things just need to be functioning for the company to be a going concern and if that's not really one of the three most important things at a company level how do you account for that the best answer to that actually came from one of our portfolio CEOs who the light bulb went on and her comment to me was I see this as a way of the team doing warm-ups right so to take taken it might be the finance team right or it might be the ops team or it might be that whomever in her opinion at some point everyone's number is gonna get called right that there will be a quarter where our support is abysmal e awful and that has become the biggest impediment to us growing or it has become such a problem that attrition now is destroying the company we no longer have predictable insight into what our revenue is going to be at that point I can't have that be the first quarter that the support team has thought about how to use okay ours right instead this becomes a way for each team to think about in a given quarter they might not be working on something that is critically important among the top three things that the CEO is most focused on but they are absolutely trying to improve their own operation within their department and the better acclimated they are to understanding what matters most to the company and and how to set unusually aggressive goals the better able they will be when their number gets called so it takes a little if I'm running an inside sales team yeah the CEO might be most focused on launching in Europe to take a real example and my inside sales team might not be relevant cuz we haven't launched and there's not much for me to do but maybe I could find a way to reduce time from initial call to meeting to quote to close maybe I can decrease that by 90% now if I can do that we're gonna get a lot more money coming out the other side or we might see that there's a real breakdown in that funnel that we're calling the wrong people and that information will be really useful to marketing and the outside sales team and to the leadership who are having me call the wrong customers and maybe that's because we have a fundamental misunderstanding about who benefits from using our product so it should be a feedback loop I had somebody a company that has a retail component where they said well I can see how ok ours would apply to engineering operations you know the leadership team but I wouldn't ever share this with the people in the stores I thought that was kind of weird and I said well why is well they're I mean they're ringing up products and they're checking people out but that's not really you know they're not connected to the big picture of what the company is trying to accomplish I thought well actually they might be the most connected and they might be the ones to find the major disconnect between what you all think you're doing and what the customers are actually experiencing and at the very least you need to have that communication from leadership through to everyone else in the company because it might be that person at the checkout counter who has the insight that says you know we could we could automate that or I even constantly getting people coming in and asking why don't we sell X and you said that our biggest goal for the quarter is to develop this new line of revenue well I had 14 people in the last three days asked me about this maybe is that something we're thinking about if you don't have that communication and those people in the just functional roles aren't included in what the CEO and leadership are most focused on you won't get the benefit of that two-way signal yep yeah right that's exactly right so the repeat the question is in setting the goals part of the success is articulating what that goal is and what the metrics are that follow and you're absolutely right we then drilled down like launching in Europe why not launch in Asia right well maybe maybe Brazil why is why is it that Europe matters and how will you know if you accomplished what you cared about right it's one thing to say well we want to launch because the competitor we heard about is gonna launch in Europe but maybe you want to let them launch in 19 more countries and spread themselves too thin and destroy margins well you shore up the business at home and I think this the conversation that actually followed that was to go back to the three cross one off put Europe on and then talk about what does Europe mean and how will you know if it was worthwhile and there it was in this particular case getting to customer milestones and attrition related to because it they they had a model working pretty well in the United States to then see if they could mimic what they'd done in the United States in Europe and only then did they actually have a goal that they could then connect to what those other teams were working on and with metrics right so this goes back to Ken Norton's coming about you keep asking and then what and then what and then what and so we started with launch era and then what well we'll have five countries with teams you know in place and then what well we'll get to a thousand customers in each locale and then what well we'll get repeat business from those initial customers above our US threshold of 70% repeat engagement then we had something we could focus on and then you know you go back to Europe and say no no it's not launch in Europe its launch in five markets where our attrition rates meet or exceed our US targets by this number and then the team suddenly goes oh how are we gonna do that and that's when you know you've got something that everybody looks at and says well we can't just incrementally like launch a website and think that that'll be fine and that was when we finally had something tangible that they could work with over here back there and then I'll come down here great question tips on managing the cadence of communication within the quarter I think this is as much a company and cultural question I don't know that there's a right or a wrong answer I know in my particular case if I was leaving GV tomorrow and starting a company I don't think I'd do daily ok our updates because if I've set a sufficiently ambitious goal I don't think 24 hours is really much opportunity to get much daylight between them at Google typically there's a mid-quarter check-in when teams hit sufficient milestones that generally gets communicated outward and a little interesting historical footnote so I mentioned John Doerr at the beginning John as a partner at Kleiner Perkins who I'm sure many of you know John was the first institutional investor in Google back in the day and has been on the board at Google for the last 18 years John brought ok ours from Intel ok ours were invented by Andy Grove or at least popularized by Andy Grove in the 60s but they only existed this was fascinating I went back and read Andy grosse book where he talks about Oh carries and they get about a paragraph so you know Andy on a paragraph I wasted seven years of humanity I think Andy's getting a lot more leverage out of his paragraph than I do out of my power and a half ok ours existed purely as a communication vehicle for middle managers that was it there was no sense of ambition ever there wasn't they weren't trying to shoot for the moon it was just middle managers who knew what their people were working on communicating out to the rest of the company the this is our alignment this is how we know that we're working on the right things they didn't have email right they didn't have any easy way to communicate out so ok ours became the vernacular that they used inside the company Google at mid-quarter check-ins with periodic updates at milestones if you're working on a more compressed timetable where you're setting monthly goals and you might do it weekly but again I think you run the risk of simply reinforcing that you haven't yet accomplished something which can start to feel kind of defeatist yeah why three objectives this is you know the Monty Python the three shall be the number not two and less from two you go to three and not for the reason is I I have this fight with most companies I talked to because they're certain that they really need four or five no one ever has too few right they always have more than they think I'll let them have I think it's that you get clarity from constraint I think you get you there is a discipline that gets instilled when you agree to only focus on a few things and remember I said early on about the you know it's it's the permission to not work on things part of the benefit there candidly so you're removing a lot of politics from me where people spend their time alright people don't feel like you're playing favorites if they come to you with a good idea and you say it is interesting let's revisit that next quarter instead of chasing the squirrel that just appeared so three is great two is even better right and if you can agree as a company that there is one thing as a company that matters most well maybe that is the way to go I find if you start spreading people's focus out over more than a few you are unlikely to make sufficient progress on sufficiently ambitious goals I think instead what you're gonna end up getting is you'll get a little bit of progress across a bunch of different things instead of really shooting for the moon and and getting there how're we doing on time it looks like we're doing doing okay here and there so the question is how do you keep alignment between the company and the team okay ours it's interesting this is an area where I've seen people have different opinions and I think this may be also somewhat cultural within the company I there are companies where it is very much a bottoms-up process and and the leaders then try and divine from what the team's believe are most important you know what's the thread that connects these or I'm going to pick and choose that is not my style I would much rather know that if I'm the founder that I am sufficiently connected to what is most important for the company that I can clearly articulate what those one two or three things are tell you them the most nervous I've ever been walking into a portfolio company they asked me to come in and sort of help them kickoff okay ours the CEO was not able to make the meeting probably was a sign that I should have paid a little more attention to but all of the CEOs direct reports were in the room I'm sorry it's okay you know he's not here great we'll keep going if he was here what would he say the two or three most important things to the company are and I got shrugs okay a little worried that the lieutenant's can't articulate what the general is most focused on again that was maybe sign number two so let's go around you know instead of as a group how about you know across the teams you tell me if you were the CEO what would you be most focused on and I have wildly different answers that was a problem because that company really didn't know what it wanted to be it was instead just sort of let's just make everything better instead of consciously articulating this is the thing we want and then we're gonna do everything we can to marshal all of our resources to achieve that thing so in terms of how to clearly how to keep them in alignment generally speaking the company ok ours aren't gonna change mid-quarter right they may change quarter to quarter in fact I think it's often good that they do you don't want these roll over ok ours that are always the same but then the team level commitments need to keep their eye on what that North Star is and understand that they are often but not always focused on initiatives that are connected to what the company has articulated matters most so question is I talked about milestones when do you know how to communicate them how do you know what they are is it project management or planning planning exercise and if you only get 60 or 90 percent of a metric the last part you said is that in achieve milestone so I'm really glad you asked because one of the things that I spent more time in the video talking about but I'll reinforce here when Google grades at the end of every quarter ok ours it's on a zero to one scale zero made no progress whatsoever one you knocked it out of the park if you are always getting ones you are not a rock star you are a sandbag er okay the expectation is that the sweet spot for really killing it is 60 to 70 percent 0.6 to 0.7 now when I was getting ready to do that video I went back and I looked at every quarter okay are every quarters okay ours that I had individually formed and the teams that I had been a part of and it was kind of staggering that I would look at in any given quarter and I think my worst quarter from a numbers point of view was about a point five five and my best quarter was like a point seven two now this is sort of like whose line is it anyway the numbers don't really matter that much except as a directional indicator of are you in that sweet spot where are you always hitting one which is actually a bad sign not a good sign where are you always hitting zero are you always saying you know I'm gonna get to the moon and you're lucky if you get to free model like that might be a problem that you need to really better understand I don't see this as a project management challenge because the okay ours are explicitly not telling you how to go from a tizzy instead you're giving the team Liberty to figure out what are you gonna try how are you gonna get there but within that they are then going to build their own plans for how to actually execute to get there I think the milestones will vary based on you know what are the goals that are being set and what what are the dependencies across teams all right if product hits some major milestone that engineering needs to know about or that ops or finance we need to know about you generally want to over communicate and let the team then selectively filter right this is where I wish I'd had slack back in the day because I we have companies in our portfolio who have an okay our channel in slack where it's just sort of the running commentary um we tried this we didn't make that we're you know we have an in site that we think we might be getting close to breaking out and it's this and if I really want to dig in I can I no matter where I am in the company I can do that I can look in I can follow it I can I can reach out I will also say that for me as a p.m. at Google okay ours were a fascinating way that when I was gonna go with hat in hand to another team at Google and asked for help okay ours were a great way for me to figure out how to craft my request in a way that was relevant to things that they care about they don't care about me and my project they care about what things they've committed to so I can better understand okay what are the metrics that they're focused on what are they watching is anything that I'm asking for connected to that because if it is I'm gonna lead with that and that was a great way of me making sure that I was in alignment with them and vice-versa versus just saying hey I need you to do a thing I've been ignoring over here go ahead yeah yeah so good good question so rephrasing company your prior company where there had been several attempts at rolling out okay ours differing understanding of what that meant so that teams were kind of doing their own thing and it becomes hard if your definition of okay ours is different from the CEOs and is different from your peers in different groups that's probably pretty destined to fail if everyone can you know use their own definition of what it is the company's trying to do this should be scaffolding or a framework that the company all understands we are defining these are the objectives that we care most about as a company and then as a leadership team we're gonna sit around the table we're going to agree based on those what things we are focused on I you know the exercise I was talking to you about where I was facilitating a team the Europe team that is often how I've seen it work very well get all the ideas up on the board give out post-its let people vote get a visual pretty quickly if the votes are very evenly distributed that's maybe not a bad thing but it is at least indicative that you don't have consensus right you don't have a quorum and there needs to then be a frank conversation about how to get from 14 to 3 and get agreement on why those three are the three that matter most and then maybe it's that will to you know tackle the next three in an ex quarter but I think everyone needs to have an understanding of what it is and and that shouldn't be that hard but this is an area where you don't get the the the groundswell grassroots everybody just tries to make things better like you all need to agree on a definition and and a framework and and then hold yourselves to it whether that's the CEOs job whether there's an ops person who will take responsibility for meaningfully embracing a common approach it is this for me is how many of you know the term bike shedding right so okay so a proc probably an apocryphal story but I think if you go to bike shed org there's a great listing and it was a power plant Board of Directors meeting and they had two agenda items in the meeting room and one was where is the next nuclear facility gonna be and the other was do we or don't we build a bike shed for the employees who live in the employer housing you know a couple miles away and no one around the table fully appreciated all of the issues in the you know six foot tall stack of papers that had been delivered to the board in support of the nuclear facility decision so they all tried to look like they belong in the room and gave it you know asked the right question or two but then put that one to bed and then everyone could easily understand all of the issues to be talked about with the bike shed is a concrete is it would does it have a tin roof is it painted if it painted what color is the bike shed the answer is it doesn't matter just pick one and then build it and move on any one of any number of equally valid options are great just pick one so that to me feels a little bit like a bike shed kind of question that's even become shorthand for many of the teams that I was on if you start rattling on a question where like there are six equally valid options I don't care pick and then agree that you've all picked it and move on but I it's a common problem where no one wants to be seen as the imposer of process so it's like just pick whatever you think works well no this is a case where everybody sort of needs to agree that we're gonna speak English at meetings you know one get to show up and speak whatever language you want it's gonna make it harder yeah probably time for one last question right where are we out of time we're out of time all right listen thank you all very much [Applause]

Channel: Nurafni Eka Agustina

Views: 10,287

Keywords: Talk, Business & Tech, OKR, OKRs, Objectives and Key Results, Rick Klau, Rick, Klau, OKRS - How Hyper-Growth Startups Stay Focused, Objectives & Key Results, How Hyper-Growth Startups Stay Focused, Google, GV, Google Ventures, Startup, Hyper-Growth Startup, OKR Startup, Rick Klau OKR, Rick Klau OKRs, GV Objectives and Key Results, OKRs Startup, Google OKR, Google OKRs, Google Objectives and Key Results, Google Objectives & Key Results, OKR Rick Klau, OKRs Rick Klau, Rick Klau Google

Id: 6iFPyyXlQSw

Length: 63min 22sec (3802 seconds)

Published: Sun Mar 29 2020