John Doerr on OKRs and Measuring What Matters

Summary

In this insightful discussion, venture capitalist John Doerr, Chair of Kleiner Perkins and author of 'Measure What Matters,' shares his expertise on the transformative power of OKRs (Objectives and Key Results). He explains how OKRs, a system pioneered by Andy Grove, foster focus, alignment, and commitment within organizations, contrasting them with traditional goal-setting approaches. Doerr emphasizes the importance of ambition in setting goals, the balance between risk-taking and necessary caution in various sectors, and how OKRs, when integrated with a strong culture and leadership, can propel teams to achieve extraordinary outcomes.

Takeaways

• 📘 John Doerr, Chair of Kleiner Perkins, is renowned for backing successful tech firms like Google and Amazon, and has introduced the OKR system to many startups.
• 🎯 OKRs, or Objectives and Key Results, is a goal-setting system developed by Dr. Andy Grove, emphasizing execution and differing from traditional management by objectives.
• 🛠 The OKR system is characterized by its simplicity, scalability, and focus on both 'what' needs to be done (objectives) and 'how' it will be achieved (key results).
• 🔑 OKRs offer five key advantages: exceptional focus, alignment, commitment, tracking, and an encouragement to stretch and take risks without tying goals to compensation.
• 🌟 John Doerr's book, 'Measure What Matters,' discusses the impact of OKRs on culture and performance, highlighting their importance beyond just business applications.
• 🚀 The OKR system promotes ambition, with leaders like Larry Page and Jeff Bezos advocating for setting goals that are bold and may seem out of reach, to drive innovation.
• 🤔 The balance between ambition and practicality in goal-setting is crucial, especially in high-stakes fields like healthcare, where risk-taking must be carefully considered.
• 🤝 A successful OKR implementation requires a CEO's personal commitment, transparent communication of goals, and integration into the company's culture and operations.
• 🔄 OKRs are not a standalone solution; they work best when paired with strong leadership, a supportive culture, and continuous feedback mechanisms like CFRs (Conversations, Feedback, and Recognition).
• 💡 The separation of intrinsic and extrinsic motivation is vital in OKRs, with the system fostering a culture where individuals are driven by personal objectives rather than just bonuses.
• 🌱 A strong culture, defined by clear mission and value statements, is essential for the effective use of OKRs and for guiding employees in making decisions that align with organizational goals.

Q & A

Who is John Doerr and what is his role in the venture capital industry?

John Doerr is the Chair of the venture capital firm Kleiner Perkins. He is a highly successful venture capitalist who has backed some of the most successful technology firms, including Google, Amazon, and others.

What is the significance of OKRs according to John Doerr?

OKRs, or Objectives and Key Results, is a goal-setting system invented by Dr. Andy Grove. According to John Doerr, it is a simple yet powerful system that has been instrumental in the success of companies like Intel and Google.

How does John Doerr describe the traditional management by objectives system?

Doerr describes traditional management by objectives systems as annual, retrospective, and backward-looking. They are often tied to top-down, hierarchical goals and are not very effective, which even led to Peter Drucker souring on them.

What are the five key advantages of using OKRs as mentioned by John Doerr?

The five key advantages of using OKRs are exceptional focus, high degree of alignment, uncommon degree of commitment, the ability to track progress, and fostering a culture of stretching and risk-taking without being tied to compensation.

What is the relationship between ambition and goals in the context of OKRs?

In the context of OKRs, ambition is highly valued. John Doerr cites Larry Page and Jeff Bezos as proponents of setting ambitious goals, even if there is a risk of falling short, as this can still lead to extraordinary achievements.

How does John Doerr view the balance between risk-taking and necessary caution in organizations?

Doerr acknowledges that the need for risk-taking versus caution varies by industry and organization. He discusses the importance of having a risk-taking culture in some contexts, like Amazon's growth, but also recognizes the need for caution in high-stakes environments like healthcare.

What is the importance of leadership commitment in the successful implementation of OKRs?

Leadership commitment is crucial for the success of OKRs. The CEO or leader must be personally invested, writing down and publicly reviewing their OKRs, integrating them into the organization's language and rhythm, and using them as a basis for communication and feedback.

What is the role of CFRs in conjunction with OKRs?

CFRs, or Conversations, Feedback, and Recognition, are the 'twin sister' to OKRs as described by Doerr. They represent the ongoing dialogue, feedback, and recognition that are essential for aligning with and achieving OKRs, fostering a culture of continuous performance management.

How does John Doerr address the common practice of tying goals to compensation?

Doerr argues against tying goals directly to compensation. He suggests that doing so can make organizations risk-averse and conservative. Instead, he advocates for intrinsic motivation and the importance of setting and owning goals that are transparent and self-graded.

What cultural attributes does John Doerr believe are important for the successful use of OKRs?

Doerr believes that a strong culture with clear, actionable, and long-lived mission and value statements is crucial for the successful use of OKRs. These cultural attributes provide the 'why' behind the work and guide behavior and decision-making.

How does John Doerr discuss the application of OKRs beyond business, such as in nonprofits?

Doerr discusses the application of OKRs in nonprofits by emphasizing the importance of setting clear and measurable objectives that align with the mission. He highlights the need to avoid over-institutionalizing causes and to maintain the audacity of goals and impatience for results, as exemplified by the Bill and Melinda Gates Foundation.