Goal Setting The Google Way
Restored from the Empower Network archive (2011–2017), lightly edited to meet our current advertising standards. Views are the original author’s.
How Google Sets Goals Using Objectives and Key Results
Have you ever stopped to wonder how a giant internet company like Google goes from strength to strength? Simple, it sets goals!
When Rick Klau joined Google following its acquisition of FeedBurner in June 2007, it coincided with the first day of a new quarter at the company. Rick was asked by his new boss at Google to draft his OKRs so he could review them.
“I had no idea what he was talking about,” said Rick, and no doubt many other people would be similarly befuddled.
OKRs are Objectives and Key Results and like many companies in Silicon Valley Google uses them to ensure it hits its targets in a simple, straightforward and transparent way.
They were developed by Intel and popularised by venture capitalist John Doerr. The idea is that a company, department, team, or employees set not just their objectives, but identify the key results for hitting those objectives. It means goals are clear and measurable.
Rick says “I’ve now gone through the process of setting my OKRs 24 times, and each time I marvel at what an effective mechanism they are for focusing my effort as well as aligning my work with the company’s objectives.”
How OKRs Helped Google Grow
In the late 1990s when Google was just a fledgling business, John Doerr presented OKRs to the company’s leadership. It’s been used ever since and has been instrumental in Google’s phenomenal growth.
The video shows a portion of John’s original deck, then describes how Google has implemented them over the years. Rick also shares a few of his own OKRs when he was a Product Manager on Blogger.
So what are the benefits of OKRs?
- It disciplines thinking allowing major goals to surface
- It helps with accurate communication and lets everyone know what is important
- It establishes indicators for measuring progress
- It focuses effort and keeps large or small organisations in step with each other
How do you implement OKRs?
Teamly.com, which uses OKRs, suggests: first, set your Objectives; these should be significant, should communicate action, and should be supported by the organisation as a whole.
Second, for each Objective, write down your Key Results; this is how you’re going to accomplish your goals. These few key points should be aggressive yet realistic, measurable, and time related.
An objective or goal might be to increase sales by 25% in the next quarter. To do that, a company would have to take certain steps to ensure its objective is met:
Objective:
- Increase sales by 25% in the next quarter
Key Results:
- Hire two new experienced sales people
- Introduce new more effective sales collateral
- Increase conversion rate on visits to website by 10%
Teamly.com suggests that an organisation should only work on a maximum of five objectives per company, department, team, or person, and there should be a maximum of four Key Results per Objective.
While OKRs must be mutually agreed upon by managers and employees, they need stretch people to the point where they feel uncomfortable.
OKRs should be outcome based not task based, and the analysis should often reveal a completion score of 60-70% as a 100% success rate would indicate the OKRs were too easy. Google uses a 0.0–1.0 scale to grade each result at the end of a quarter. Its “sweet spot” for an OKR grade is 0.6–0.7; if someone consistently gets 1.0, their OKRs aren’t ambitious enough.
It’s important not to punish low grades, but see them as data to help refine the next quarter’s OKRs.
Finally OKRs should be reviewed regularly, and only those Key Results that are still relevant should be carried forward.
Goal setting and OKRs are important in any business. Hopefully Google’s approach will help establish yours.