The OKR Episode (With WorkBoard's Deidre Paknad)

Welcome to Build, this is Maggie. Do you have goals at work? Do you struggle with them? Do you think that they're too complicated, maybe a waste of time? Or do you struggle to get your team aligned on them? I have been obsessed with goals for a long time now. As if you're a listener, you probably know. So I tried to find the source. I went to Daedrey Paknad, the co founder and CEO of Workboard, which is an OKR software company with customers like Microsoft, Cisco, Zora, Workday investors like Andreessen Horowitz. Diedri was also previously a VP at IBM. She's been the CEO of multiple other startups and basically she's the authority in how to get your team aligned around goals. So today we get into the why voc pitfalls, how to get your team excited about them. Basically everything that you need to know to be successful at goals. I hope you enjoy it. Deidre, welcome to the show. Thank you for joining me.

Oh, I'm happy to be here.

Awesome. So I have been on this year long journey to bring goals to drift and I'm really excited to talk to you because you got so into this problem that you started a company around it. So I would love to hear from you a little bit about what got you so fascinated by OKRs specifically and the origin story of Workboard.

Yeah, awesome. So IBM bought my last company and it this sort of this transition of going from a stand startup company where everyone is really mission aligned and metric aligned and all really actually focused on the same things and going in the same direction in part because we weren't that big of a company and we were mostly in a few offices as opposed to everywhere in the world. To the IBM environment where I was running a much bigger business. It was global, there was a lot more layers. I was trying to drive the same kind of mission and metrics alignment the same momentum for growth in a much bigger environment. And I found that it was so much more difficult and that frustration about wait, if, if everybody doesn't understand where we're trying to go and they don't feel really connected to it and needles we're trying to move, we aren't going to grow as fast. And then I started realizing I wasn't going to accomplish that with PowerPoints.

How did you make it happen at IBM in an environment that's that big? It seems from the outside looking in that it would be sort of a herculean task to bring structure to that.

Kind of first like large companies and I work with a lot of Large companies right now, they have a process or a practice, if you will, to clarify what the strategic priorities are to drive alignment and to drive accountability around them. They have a ready emotion around that. But that motion is, it's literally thousands of pages of PowerPoint decks, especially in a big company. Right. If you want to see business unit strategies, it's like the pile of PowerPoint is so high you couldn't ever really digest it. And of course it's, it's completely stale by the time you see it. And so it's these big decks, it's these all day meetings where you go through and agree and then every month you have another all day meeting where you're trying to figure out where you are and then status reports in the middle and kings calls. It's just incredibly manual effort where it's people and decks and meetings and you're always chasing your own facts. Right. You're always behind the facts. I thought the huge opportunity was, okay, wait. This is a business process. Every company needs get aligned on the strategic priorities, decide what success is and how we're going to measure and drive the results and the risks as fast as we can so we can drive growth as fast as we can. And instead of that process being the most opaque, the most manual, the most labor intensive, that process at every company should be the best process. It's like the one your board cares about. Right. Is everybody headed in the right direction and how are you doing on the strategy? We should be able to know the answer to that in one second, not one month.

Yep.

And so we looked at it and said this is actually a process that we should make automated, reliable, data driven, transparent. Right. It should be at least as reliable data driven as like our help desk ticketing process.

Yeah, absolutely. It's interesting because I think all of the things that you said about how the decks piling up and all the work, I think I have felt that at a 300 person company. So it's interesting to me. How did you figure out how to distill the process down to actually make it doable in a way that felt right for the scope of the thing you were trying to do?

I think part of it is looking at, to me, it's just sort of like what you do, if you're thinking about I'm going to make software, which is certainly what I have a career around.

Right.

The process look like, how should it look? What would be ideal? Where's the friction now? What's the medium now? What is the latency, if you will? In that process and where's the edge of it? And so one of the things that breaks is that I'll call it the trickle down effect. So if you're in a company like IBM, you're using decks and tracker sheets to do this through, like five or six layers. It'll take you, just because of the tools you're using, just the medium. It'll take a whole quarter just to have it trickle down. Because the decomposition from the team at the top to five layers down is, in a sense, it's explosive. Right. Where if the team at the top, the leader has 10 directs, and those 10 directs have 10 directs, and then those 10 directs have 10 more directs. Right. The volume is increasing as you go sort of through the org. And so the plate of spaghetti is getting bigger and messier. Right. And we're doing this process because we want to be aligned, but as the volume and the plate of spaghetti gets bigger, it gets harder and harder to be aligned. We're all wrapped up in not being able to see through anything other than, like our wad of spaghetti. And I think in this particular lateral alignment, not vertical alignment, but lateral alignment is where all the juice is. And that's impossible in the medium of it's a PowerPoint or it's spreadsheets and. Or Google sheets and Google trackers.

Right.

Either way, lateral alignment's almost impossible there. The people have to work too hard to go find what the other teams to the left and the right are really working on. So they don't. Right. So we do the effort, but we don't actually get the magic from the effort. Right. And then I look at that as a data problem. So I've got a workflow problem and I've got a data transparency problem. I need to rationalize the linkages between the objectives and key results at the top, in the middle, and in the wide part of the organization, so that each person, instead of having to look at the whole pile of spaghetti and figure it out, sees just the parts of that meal that are good for them. That's perfect for software.

Yeah. I'm nodding along here saying, oh, yeah, that's exactly how I would break that problem down. That makes sense. I'm sitting here thinking, okay, PowerPoint has all of our Google Slides, has all of our goals in it, and even at a small company, it can be challenging to go in. And even though it's just one place to go in and what other people are doing. So how do you help teams figure out that lateral alignment? Because I think that's really interesting. I've never heard anyone talk about the fact that it's not just managing up to your leadership team, but it's also managing across and making sure other people know what you're working on.

I think actually for CEOs in particular, they're really aware of how powerful lateral alignment is. And in the business that drift and workboard are in, lateral alignment is actually the secret to high gross retention, high ARR growth and high net retention. Right. Which means lateral is what sales is. Selling is the same thing marketing is. Marketing is the same thing product is building is the same thing that our services team is deploying and driving value around. And where we get like high churn is sales sold anything to make their number. And marketing is messaging something over here. And product is building what they think is cool unrelated to what marketing and sales are doing. And services is just hitting a checklist to get it done fast. The customer never got the value the sales team promised them in the first instance. And maybe product was never even building that value because it was kind of going its own way. That scenario is common everywhere. And then if you have. You're a company that has 10,000 products. Imagine. Anyway, so when we think about how do you get lateral alignment, A couple things we see that really are a big enabler. You and I talked about this a little bit before. But the first is okrs at the team, not at the individual. And the first alignment is a team of people agree on what it is they're trying to achieve and how they're defining success. And individual okrs often are a way of reinforcing low alignment on the team. Every man for himself. Everybody's broken into their own little thing. And so the First1team okrs within the canonical team. The second, much more powerful in a lot of our big customers use big enterprise use this really powerfully is setting OKRs not on a functional team at all, but with the group of people who need to come together to make something happen. And that might be a pod or a squad. It may be a go to market team that includes a revenue lead, the success lead, the marketing lead. Right. And they're together deciding, well, what are we trying to accomplish on this product or on this launch or on this new foray into a new part of the market or the world. And then how are we defining success? Right? And not thinking about okrs as if they must sit at an individual owner or they must sit at a functional or hierarchical team. That locking is really powerful. We see a real performance difference in we'll call those dynamic teams. So teams that are cross functional, non hierarchical, those teams on their OKRs on average do 10% better in a quarter than functional teams. And it just gives a first clue about like, well if we really bring the right people together who are highly dependent on each other and they have shared understanding, well, they just achieve more collectively.

Yeah, that's ringing true for me. I'm the product I work on is sort of a newer product from Drift and I have some shared. Not the individual goals aren't shared, but kind of a shared set of goals which you could probably are probably in a similar format to okrs with sales and marketing and customer success and myself. And I think we have this little sort of team that we're working together every week to see how we're doing on our product. And I've definitely the amount of focus that we've had because we really clarified exactly what our targets are and we check in on them every week and we talk about, okay, are we getting it done? What's happening? What are we learning? Is this reasonable? I feel like in this one little example I'm kind of living that thing that you're talking about.

Yeah. And it's your focus week to week with those same stakeholders. That's where real results and velocity really come from. Every single week you have an opportunity to refocus, double down, solve, remove the risk, triage. Right. You're not waiting a month or half the quarter. Sort of the Google old school will check in midway through the quarter. It's like only if you have all the money and time in the world will you do that. Yeah. This week over week, focus with those same stakeholders on results you all agreed on. That's magic.

Yeah. So then how do you. I think I oftentimes when I'm having conversations like this, it sounds really great, but I think it can feel really impossible to get to a situation like this, especially if someone is exists inside of an org that doesn't work like this or isn't the person doesn't feel like they're in control of how the systems are set up. So how do you help people get there?

A couple ways. One is it depends who it is. Right. So on the one hand I think even if you were a team of five people, I think the value of spending two hours and even if it took you 20 hours to agree on what it is you're trying to achieve together, to get clear with each other on how you're defining success, like what outcomes you're trying to create those 20 hours leveraged against the 500 hours you all have in the quarter are so well spent. Right? Because we both know you could spend 500 hours in the quarter on a set of assumptions about what mattered and can be horribly wrong.

I've definitely done that.

So even if you're a small team and the rest of your organization does not believe in clarity of purpose and alignment on impact as an individual team or as a person who owns your own career impact as a manager who wants to be great, it's worthy of the practice at larger scale like bigger companies. So for us, Cisco or Comcast or Microsoft, we have a OKR coaching service, right? Where literally we'll have coaches who come in and help facilitate the OKR setting. So the working session where all the teams are going to meet and decide, okay, what is it we're trying to achieve, what are objectives, what are the results we're trying to create? We have a coach in the room helping people have good conversations that include trade offs, which is fundamentally a part of this dialogue. Right. That help them think about outcomes, not just deliverables and that help them genuinely get aligned and then identify who do they need laterally to tie off with. And it's just the coach can help bring that conversation a smarter conversation faster. So you get higher integrity okrs the first go round. And I think it does one more thing for managers, especially managers in the middle who haven't been managing or leading for a long time, is the coach lets the manager be in the meeting, listening, thinking, being present. And coach makes sure that the other team members are sharing the authorship because bottom line, they also share ownership. If the manager's got the pen and they're at the whiteboard, it looks a lot more like dictation creates a different outcomes than the team collectively got. Really got on the same page, made the hard calls and loves where they landed. Then you've got way more momentum going into the quarter. So the coaching service for us is particularly if you're trying to get 500 teams aligned in a quarter, it makes a lot of difference. And then we have a coaching school. So people inside organizations who want to build their skill and be their internal coach can just get deep in what alignment looks like. What really how to measure everything. When people tell you you can't measure what we do, what they're really saying is I don't know how.

Yeah, yeah, you can definitely measure it. It's interesting. I spent this past quarter, the engineering director that I work with, we spent a lot of Time back and forth, having like a really intense in depth discussion about not even just the KPI or the measurement we were going to use, but about our statement of our. We say goals and the statement of our goals and if we got that right and the magnitude of what we wanted to change. And I think other people thought that we kind of spent too long on that. But I think that that was probably the most critical time I spent because then we knew that we both were bought into exactly what we were going to try to get done. And we have stayed aligned on that throughout the quarter. And I think that alignment, I would have invested twice as much. I think looking back, I think that's.

Totally the right call. Some people definitely get frustrated, think the words don't matter. And when you step back for a second, think, wait, wait, we're communicating as leaders, of course the words matter. And if we're not clear on our intention, we shouldn't jump to what we can measure. We don't know what measure or why. I think of it as messy work, right? Because you have to actually work at it and it requires like brain work. And sometimes people are uncomfortable with doing that messy work. Once you do it and you see the outcome on the other side, it gets way easier. But I think spending time on what the intention is, the statement is fundamental. And then when we agree on what our intention is, then we can start to talk about how we would know we were succeeding at that. One of the mistakes we see teams make on OKRs and is the objective the statement, your goal right at the top. And then a set of key results are the measures of success. And they'll assume that the next layer just picks up one result, one metric, and then that becomes their objective or their goal. And I think what you lose there is you lose what the intent was. Now you're just down to the unit, right? You're down to what I think of as the soulless number, the investment in being aligned on the intention. Before we start talking about the measurement, that investment needs to happen at every team, not just at the teams at the top, right? Every team, like, what are we really trying to accomplish? I don't think it's that. I think it's this other thing.

So how do you help people? Obviously we work in software. There are the stereotypical doubters on the team. How do you help coach people to get bought into this process? Because I think it's easy for me to say, okay, this is so important because I understand how important alignment is, because I need that in order to get things done, but from an individual contributor or maybe a lower level manager. How do you help them understand the value if they're sort of skeptical of the perceived time it takes to get this done?

Sometimes it's helpful to just sort of think like what we already know about adoption of our software products by our customers. Right? We don't expect every customer, every user to adopt at the same pace and in the same way on the same day. There's like a set of people who go first, a set of people who, when they see that the first crew got real value, then say, oh, that value is interesting, I need that value. I'll go. And then there's a set of people who need a lot more data, a lot more evidence, and they need a bigger data sample of people who previously succeeded. And then they'll decide to go. And it's literally the classic adopters curve.

I'm like sitting here with my mouth hanging open because as a product person, I cannot believe that I didn't even think about that. Of course, that makes so much sense.

When you think about it in that context. What's so liberating is you recognize that the early adopters create the fact base that allows more conservative people to follow, gives them more evidence of benefit, and then fast followers create yet more evidence of benefit that allows the mainstream people to follow, which creates yet more evidence which allows the more skeptical people to follow. You sort of believe in the physics of adoption. Then when you're trying to roll out something like this, you can't skip the step and go worry about the slow adopters because you can't convince them without evidence of benefit or value. So instead you focus your energy on your early adopters, your fast followers, and the benefit that they're getting, and you take that evidence and that data and you communicate the heck out of it. Because it creates the fact base that allows more conservative people who need to see it before they believe it. Right? It makes it possible for them to do that. And so don't waste any calories on people who don't get it yet. And really invest your calories on people who can consistently describe the value, the impact and the why and what's in it for them. My experience in particular in tech companies is if you do crummy okrs, nobody wants to do them if they don't have integrity, right? If they're totally processed, if they don't help people, and it sounds like your team, week to week, they're helping you do work that really matters to know that it matters and to your impact. I think lots of teams don't know what that looks like and it feels like a process for the sake of process and lots of teams do crummy okrs and it is just a process for a process. Right. And I'd that too if it were me. So, yeah, integrity of the OKRs themselves, of the goals and the metrics and then sharing what works, sharing what's in it for you as a member of a team and as a leader of a team. Like, how does this help you?

Yeah, yeah. I was going to say I think I had an example this happened this week that really made me obviously there. I sometimes feel hope I got this right. I hope this is the right thing. Some level of uncertainty. But there was a moment this week where a team said, we made a lot of progress on this one key result, or as we call them, sub goal. And we actually think that we need to refocus because we don't think that we picked the right frame for how we're going to approach our other goals. Looking at what our overall statement is that we had for the quarter. So we're trying to make our customers successful. They had kind of a proxy metric that was in between the end customer and what they were building and they said, you know what, we actually have been looking at that other, the top line goal and we think that there's a better way that we can be working because we want to more directly impact that number. And to me, that was a really good sign that the teams were using their goals or their okrs as a tool to think about. Are they getting the maximum impact? Are they focusing on the right stuff rather than kind of this like rigid framework that they couldn't deviate from?

Yeah, I love that. I think done well, the process causes that conversation to happen every quarter.

Right.

Really? Stop, think. Hey, are we measuring the right stuff? Is this, is this really where value is created? Are we. And I think if you build that muscle in that conversation in teams consistently come back with, actually, no, we need to move closer to here. This would give us better impact. Right. And whenever you can do that, I think you have a smarter, faster organization.

Definitely. And part of that was I'm kind of leading you on a, to my next question, which is about outcomes. Because I think part of what we did was we focused our, our mission for our product on an outcome for our customer. And that's been something that I've been talking to people about for a while and we had a brief conversation about it. But you said something that really interested me was that you said that a lot of new managers are uncomfortable debating outcomes with their teams. Can you tell me a little bit more about that?

Yeah, I think like the exact team and certainly senior leaders, they tend to talk about outcomes, right? The business outcomes, our ARR, our grr, our nrr, acv, right. They think in terms of measurements and improvements and they are spending dollars and allocating people and building products and driving training, all of those things to move the needle on ARR, acv, et cetera. But when you go to the director level and the rising managers, they're much more fluent and often more comfortable talking about their output. They have less familiarity talking about what are the outcomes that their output will drive. And that gap between output and outcome is another form of misalignment, Right. Because you and I both know we can do a ton of activity and it doesn't actually add up to value created and we're exhausted. We did it all. We were super busy, but it did to the results that we wanted at the next level in the company or that would actually move the company's growth forward. And so I think it's just acknowledging that if you rose up from the individual contributor forward and you start managing a team or your team lead and you're managing work. Right, which is what we're asking you to do. The focus day to day is often just on output. And there's again, back to the word coach, right. There's a conversation to be had and some coaching to be done to build really comfort with having a conversation around, well, wait a minute, if we did all that, like what. What outcome would it create? Like, what would be the result if we did that? And then the next conversation is, well, does that result actually add up to what the results are that we're trying to achieve at the company? Are the results aligned? And often they're not. Right. And there's this gap between we did a lot of work, but it didn't matter which, honestly, that doesn't feel very good. Did all this work? Didn't matter. And so I think of helping people see the difference between output, which is the work we do, and outcomes, which is the value the work creates or the value we intend for the work to create. And that changing the conversations. And what I like about key results is it's actually about quantifying the outcome, not listening to the output. It's a gear shift, Right. It's a shift in conversation.

Yeah. One of the things that I see a lot is that I often think that the hesitancy around that is a lot of times due to fear because you have that transition from, well, I'm used to just being able to say I did all the inputs correctly and maybe the outcome didn't happen, but I did my job to. As you grow in your role and in leadership, it doesn't really matter anymore and you're still accountable to those results and you can't really hide behind, well, I did all the stuff I said I would do, so I need to. I get a gold star.

Yeah, I think for some it is that for sure. And I've say this as CEO business leader. Right. I look at it as my job to make sure that managers in the company and in the team that we coach them in skill building to think through and help their teams get aligned on outcomes. And as managers, rising managers help them drive accountability for outcomes, which is actually the job. Leadership should be helping rising managers be good at this as opposed to expecting them to go from like awesome coder to now maverick manager who knows everything. Right. Our job to coach them up.

Yeah. Yeah. And I'm just thinking, I'm assuming that the OKRs that you have internally at Workboard must be perfect.

We're pretty, you know, wonky about this stuff over here. For sure. For sure.

Daedri, I could spend legitimately all day talking about okrs and goals. It's been something that I've been thinking about so much. But we are running out of time, so I want to ask you kind of one last question, which is I always ask people what they're reading or listening to that's helping them in their work or that's keeping them inspired. So I'd love to hear from you what you're reading or listening to these days.

I just finished Ben Horowitz's new book, which I love. I was a huge fan of his. Of the Hard Thing about Hard Things. Of course. Huge fan of There and then I have Sapiens next on my iPad, which is I've heard so many awesome things about the book and about its provocative way of thinking about how do we come together as people, how do we organize and coalesce, how do we communicate, how do we connect? So I'm super excited to crack that open actually, tomorrow morning on my trainer, my peloton thing.

Yes, I also have a peloton. I'm actually sitting right by it right now. Shout out. Awesome. Well, Deidre, thank you so much for coming on the show. I really appreciate you taking some time to chat about. Okrs and give us some knowledge on how we can be more outcome focused and do this process better.

Oh, absolutely. It was very fun. Love the topic and it was great to talk about it with you.

Yeah, thanks.