Ally.io Marketing Manager Marilyn Napier recently chatted with Rick Klau, who you may know from the Youtube video, “How Google sets goals: OKRs.” Rick spent more than 13 years at Google, most recently as a senior operating partner for Google Ventures. Before joining Google, Rick was the VP of Publisher Services at FeedBurner, which later was acquired by Google. He has a wealth of knowledge on objectives and key results (OKRs) that he generously agreed to share with us. The conversation below has been condensed. If you want to hear more, watch the full talk here.
Rick: The first time using them was right after FeedBurner got acquired. So I joined a business development team and was told, okay, it’s about to be a new quarter so one of the first things we need you to do is draft your OKRs. I had no idea what the acronym meant. I’d never seen anyone talk about the process. And honestly, having worked at startups previously, there was not exactly a discipline or a framework that we were using to establish goals. It was a “do the things that need doing” and periodically check in to see if there are better things to do.
So my first introduction was very much a dive into the deep end of the pool, figure it out as I went, largely by observing the immediate team around me and trying to distill what seems to define the people who are doing it. What are the common characteristics? They were committing to a few things. They were ambitious. There were metrics associated with the few goals they were committing to, and it seemed at the outset, they were setting themselves up for failure because several of the things seem pretty likely to not happen. Like it just seemed like it was outside the realm of probability, if not possibility. And it was, of course, as I came to better understand OKRs in the years that followed, were exactly the things that made them critical to Google’s success over time.
Rick: I think it’s table stakes. If you don’t have leadership not only understanding what these are about, but agreeing that they’re important and conveying that to the entire organization…I think if you’re not set up to fail, I think you’re at least adding a considerable amount of headwind to the organization.
I think a lot of it feels a lot like learning a new language. If the company is committing to OKRs as a framework, but only in the product work, well, then product has learned how to talk about the stuff that they do or don’t do. And no one else in the company understands when they’re saying no, they’re not saying no because they don’t like you, they’re saying no because they’ve agreed to focus on a handful of higher value, more impactful things.
If the entire company is speaking that language, that is a much easier conversation to have. And it’s easier to interpret what you’re hearing when another group is answering your question, which is I need you to focus on X and product says actually, we’re allocating our resources on these other things so that’s not going to get our attention this quarter.
It is so much easier if the CEO has communicated to her team how important this is and how universally it needs to be understood and adopted across the company. I just think she’s setting up the company for a much higher likelihood of success.
Rick: I think first and foremost, don’t assume you’re going to get it right the first time. Looking back three months later, if you’ve determined that a quarterly cadence is the appropriate amount of time, that first quarter might feel a little uncomfortable, but one of the best things that a CEO can do is demonstrate to her team that no one is getting a scarlet letter because they got a zero on an OKR. No one is getting punished. There’s no stigma that will follow that team. We’ve learned something. We now know a little bit more than we knew before. That’ll help the next set of predictions we make about the outcomes we can accomplish, or potentially we’ve learned about where there are headwinds to the team/to the company that we didn’t know about. And now we know about them. So we’re smart.
The other thing I think I wish I could go back and edit out of the OKR video, I mean, I’d make it a lot shorter now that I know that so many people watched it. But the thing I would change and I didn’t know at the time, but that I’ve learned now having had conversations with hundreds of startup founders and leadership teams, is that particularly for the scenario you outlined, which is the CEO or the team starting out with OKRs, and trying to give it a go, don’t worry about individual OKRs. It almost doesn’t matter what the size of the company is. Focus on setting a handful of objectives at the company level, the fewer, the better. Companies always tell me they need four or five or six. I always try and tell them they’ve only got three, two would even be better than three, but then translate that from the company level to the team level, don’t go any further, until, to go back to my example of learning a language, until you’ve developed a fluency in how to communicate with each other about what it is you’re doing and what you’ve agreed to not do. Ultimately, I think that’s arguably even more important than the things you have committed to. Trying to translate that into individual commitments, I think is going to be both hard and not that much more productive.
If you happen to get it right early on, I think the better thing to do is get the organization right as a whole executing a little bit more nimbly, communicating with each other. Well, I’m starting to see some predictions of the future come true. Right? Nothing feels better as a team than predicting an unreasonable outcome and then doing everything in your power to make it happen. And then looking back and saying, wow, we did that. That was because we made it happen. It wasn’t inevitable only after that point.
And that might be two, four, eight quarters. Then I think you’ll start to see some individuals in the organization start to say, okay, this is maybe a useful way for me to think about stretching outside of what I’m already committed to within my team. Maybe I’ll learn a new language right.
At Google, in a lot of cases, the way people used individual OKRs was a way of stretching beyond the commitments they’d made. To up-level their capacity to take on future commitments. So it was almost like investing ahead of when you need the skill to know that you’d be capable of stepping up when needed. But I think if a company tried to do all of that at once, I think it will feel a lot harder and there will be a lot more reasons for people to look at this and say this isn’t helping me. It’s making it feel like it’s harder to accomplish.
Rick: Yeah, I think so. There was a moment for me when I was part of the team building what became Google+ and Sergey was in basically every major strategy meeting for a number of months. And then at some point his focus shifted. Google X was starting to stand up on its own at that point. And so he wasn’t at as many of those meetings, but what became clear to me was that because OKRs were so ingrained in how the organization operated, we all knew fairly completely how Larry and Sergey thought about decision-making and it didn’t mean that they were unnecessary. They were, of course, absolutely critical, throughout Google’s evolution. But what it meant was when any of us had decisions to be made, four of us might be around a table and there would be a spirited discussion and then most of the time, it was as if we could channel them into the room and say, well, if they were here, this is what they would say. And more often than not, you’d get to some consensus because you already had that framework that had been communicated the prior quarter and the quarter before that about what was actually most important and how to measure whether we had the outcome that we wanted.
So that didn’t eliminate every escalation that needed to go to them, but probably about 90% of the time our team and literally every other team that was having similar discussions and decisions to be made, could make them on the spot as if Larry and Sergey had been in the room, but without needing them to be in the room. So the speed that gathers as we got better at channeling them and agreeing on yeah, well, on this particular decision that we have to make, we think the outcome would be greater if we did A versus B, it means that 90% of those potential decisions aren’t sitting in their inboxes waiting for their feedback.
Rick: I would love to tell you that I knew this from day one. I think it took years of conversations that happened relatively organically after the video started taking off. And it’s counter-intuitive, but the most valuable part from my point of view about OKRs is not about what is in the OKR, it’s what’s not in the OKRs. Yes, you’ve committed to a few goals. Yes, you’ve defined the metrics that if you’ve successfully achieved those goals, this is what that success will look like. But it’s what you’re giving yourself permission to say no to and to say no without it feeling political or feeling like somebody is playing favorites.
Oh, well, you said no to her idea, but you said yes to my idea, like that for me is the key, because oddly enough, when you give your teams permission to say no to good ideas, they’re not going to stop thinking about the good ideas, but they’re going to start to understand that there’s a time and place to contemplate them. Let’s not distract ourselves just because someone had a good idea on a Tuesday standup meeting, but let’s finish the stuff we said we were going to do. We might not succeed at all of it. In fact, we probably won’t, but we’ll have learned more and more. You can encode that. That becomes part of the institutional memory at the organization on top of which I will know the next time I have a good idea, and someone quickly says no, it’s not because the idea wasn’t good or I’m not good. There is no faster way to kill momentum or initiative at a company than to disincentivize creativity amongst the team.
If you don’t have something like OKRs in place that makes it easy and comfortable and apolitical for those “no’s” to come, then people start to get frustrated because they don’t understand how decisions get made. They don’t understand why their stuff never seems to rise above the fold and teams will suffer.
For me, the lens I look for when talking to a company for the first time, what have you said no to and not only what have you said no to in the past, but how do you say no in the moment? Do you have a process by which you can get to that quickly? So you avoid chasing every squirrel that goes by your window.
There’s a lot of other components that are, I think, pieces of what makes the OKR framework so powerful, but if I had to pick one, it’s what have you said no to and how do you signal that.
Rick: It’s funny, I don’t know. When I finally shared my news publicly a few weeks ago, a number of people reached out to me privately saying, okay, so what’s the other side of that discussion? Like you must have something teed up. Actually, for the first time in my career, I took my own advice.
For the last probably eight to 10 years, anytime anybody has asked me for career advice, I’ve told them, don’t decide to take the next job or not take the next job, take the time so that you’ve evaluated a number of possible paths. So when you’ve committed to one, it wasn’t just a binary yes or no to that one, but it was compared to all of the other possible options. It was the best option for you for what you were seeking to do. And in this particular period, and now probably three months in, has been some of the most fulfilling set of conversations I’ve had. I’ve talked to nonprofits, I’ve talked to some venture-backed startups. I’ve talked to a couple of founders thinking about their next thing and wanting to bounce ideas off. Every week has been more invigorating than the last and I have no idea, when I’ve made that commitment, what it’ll look like…probably going to be a few more months.
I’m still treating this like a full-time job, but one of the most fun periods of time I’ve had in my career, which has been just delightful. The only risk is that I’m going to have too much fun doing this and not want to commit. I think I’m so focused on impact and outcomes and wanting to be part of a team that’s capable of producing out-sized results, and the only thing I miss in this period is that I am just me. There is no team, and I’ve been privileged over the last, you know, 20 years to be part of some pretty extraordinary teams. So that’ll be what pulls me to the next thing. Just trying to be very patient.
Rick: This will feel like you all set me up for the plug, but I have had conversations over the last maybe month with a number of startups who’ve reached out, wanting, you know, now that they know I’m no longer inside of GV, they want to know if I can use some of my free time to chat with them. And I just had this conversation late last week with a CEO at a startup who was asking about as they deploy OKRs, what tools should they use. And I’ve long been of the mind that you never start with the tool before you get the framework or the process determined. But what I’ve now seen just in three straight conversations over a couple of weeks is a number of cases where trying to go the DIY route, either in Google Slides or Sheets, I had somebody trying to do it in Asana, creates friction where you’re already fighting against what feels intuitive. Right. Let’s just do the good things. Let’s check back in at the end of the month, at the end of a quarter. So learning how to say no to lots of good ideas, learning how to get alignment across teams, all of that stuff is hard. Lacking a common platform while you try to do that makes it harder.
So while I would never tell you, pick a tool and you’ll get it right, and it’ll be easy, what I’ve increasingly figured out is that for these teams that are getting started, committing to something, ideally something that is purposely built for this initiative, at a minimum, increases the likelihood of success. So when you’re looking for how do we set the team up for success? How do we eliminate the obvious obstacles or hurdles that would potentially get in our way? One of the reasons I’ve been thrilled to chat with you and Vetri over the last month or two, it’s seeing that there are tools that just did not exist eight years ago when I recorded that video that I think make it that much more likely that there’s just a tremendous amount of potential to get unlocked, which is exciting.
So I’m like you, telling me, you’re excited about where I’m heading. It’s been fun to get to know you all and see where this is heading, because I think what you are able to enable and accelerate for companies bodes really well for those companies that are willing to make that investment. So, I’ll leave it there.
Thank you Rick for an insightful conversation! If you want to learn more about OKRs, go here.
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