OKRs: Get Clear Goals With This Technique We Learned From Intel And Google (part 2)

Okay, so here's how OKRs help teams, right? Communication hub. Everyone has transparent visibility into everyone's contribution and impact. So all our okrs, we use a web platform called 7Geese7Geese.com it lets you put everybody's okrs on one giant engine and everybody can see everyone else's okrs. This philosophy actually started at Google. I was talking to a friend of mine who works at Google. He opened up his Google app internally for employees and he said, who do you know at Google? And I mention a name and instantly he's able to look at and show me what exactly they are working on. Right? So everyone can see everyone else's okrs. Now when you know someone's okrs as a leader, you can coach. Team leads can coach their team members on how to best contribute to business success. Coaching is very important. Google did a study and they found that the best leaders, the quality that made them best leaders is that they were coaches. They were coaching people and helping educate people to get better. Third, value, alignment, focus. Everybody can see how their contributions are valued and aligned to each other. And the cool thing about this is every now and then as you're doing this, you will realize that there are certain people on the team who are doing jobs which are no longer needed. When you have okrs as a philosophy, you can eliminate those. It doesn't mean eliminating the person. You would simply move them onto a role that is more aligned with the core purpose. Everyone get this. And number four, collaboration. Cross functional team collaboration now is brought to light and opportunities are highlighted. Teams now can see when they are contributing to a okr that's across multiple teams and they can collaborate better. So each, even an event like a fest is actually not put on by one team. You have Laura who is running our events team, but there are three or four other teams which are collaborating on a fest in unique ways and everybody can see that alignment. This is how we're able to execute on incredibly complex projects such as the 30 day university which is essentially a fest but spanning one entire month for 1,100 people. Now this is what happens when you bring in okrs. These are the big benefits and a lot of these come from measure. What matters first, focus and commit. Everybody now has focus. Everybody commits to their goals. So that focus and that commitment make you a more efficient organization. Number two, alignment. This is the best part. Everyone is aligned to everyone else. This is a really beautiful example from the book Measure what matters. Right? So what you're seeing over here is an example of an OKR from a team that's looking to win the Super Bowl. So the primary objective is win super bowl. And that is the head coach's primary objective. And he has three key results. The first one is passing attack amasses 300 plus yards per game. The second one is defense allows fewer than 17 points per game. And the third one is special team units rank in top three in punt return coverage. Now, you don't have to know American football. I have no freaking idea what that means. I wish Americans who wrote books would pick a game that's more friendly to the rest of the world, like basketball or tennis or monopoly. So now you have these three key results. Right? Now the head coach knows that he needs three people on his team to pursue each of these key results. And notice the head coach's key result becomes the objective of each of the three people on his team. So he hires an offensive coach whose objective is really the same as head coach. Key result number one, generate 300 yards per game passing attack. And that gets broken down into three steps. Can you guys see the elegance in this? Okay, does everybody get this process? Okay, so immediately you see a beauty here. If you are leading a team and you know what your three objectives are. Now the people on your team, each of them are working on one objective and they further take that and they break it down into three. Now measure what matters. John Dawa says you always pick between three and five. That's the sweet spot. If you go fewer than three, maybe you need to push yourself to think of a third one. If you go more than five, you've missed the point. You're lacking focus. Three to five is the sweet spot. Okay, so this way you're now creating teams which are super aligned, like ridiculously super aligned. And everybody knows what their goals are. So let's look at the defensive coach. He's working on the head coach's OKR2, which is defense allows fewer than 17 points per game. Now the defensive coach takes that, makes that his objective, sticks it in his wall or somewhere and breaks it down into his three key results. Allow fewer than 100 rushing yards per game. Increase number of seeks to three plus per game. Develop a pro ball cornerback, whatever the hell that means, right? And now he can execute on that. And maybe he might raise his hand and say, hey, I need a person working on my key result number three, because otherwise I'm going to miss the mark. And that's acceptable too. This is how healthy teams get built. Now the next tip is you want to stretch for amazing this was a very important thing introduced by Larry Page. So Larry Page is the founder of Google. A lot of people think that Google was started by Larry Page and Sergey Brin. But if you read the book in the plaques, what it says is that Larry Page was really the primary founder. Sergey Brin was a great supporter, but Larry Page was that visionary. Larry Page and I went to the same university, the University of Michigan. We both went to the same computer engineering school, and he was about four years more senior than me, so we never crossed paths. But Larry Page in the book in the Plex, speaks about how he learned to dream big. It was a course a summer program he took at Michigan called LeaderShape. I took that same summer program when I was 19 years old, so I know what he's talking about. It's a summer program that creates leaders who dream really big. And Larry Page credits leadership with changing the way he thinks about the world. I went through the same program and I can tell you it also gave me that concept of big vision. Now, Larry Page enacted this rule in Google, in all of your OKRs, 50% of your OKRs must be so bold that you don't know if you're going to succeed. So it looks like this. There are two types of OKRs, committed and aspirational. In Google, 50% of OKRs must be aspirational. And aspirational means these OKRs are so big, so forward thinking, that you have a 50% chance of failure. We adopted the same thing in Mindvalley. So let's first talk about the difference, because you're going to do this when you write down your company okrs. This is how you have a realistic business plan. But you're also pushing and stretching to do what might be massively big goals that are going to inspire and capture the imagination of people. So committed objectives are tied to Google's metrics. Product releases, booking, hiring customers, managers set them at the company level, employees at the department level. In general, these committed objectives, such as sales and revenue goals, are to be achieved in full within a set time period. Those are committed objectives. In Mindvalley, a committed objective is run AFES Bali, generate X number of tickets, X number of revenue, x NPS score. That's it. It's a committed objective. The team knows that they do this every year and these are the objectives that they have to hit. However, if we were just doing a fest every year, we eventually as a company would stagnate, we wouldn't be growing. So we set an aspirational objective and that is Mindvalley University City Campus so this is an aspirational objective. They reflect bigger picture, higher risk, more future tilting ideas. They originate from any tier and aim to mobilize the entire organization. By definition they are challenging to achieve. Failures at an average rate of 40% are part of Google's territory. So Google actually fails on 40% of its aspirational objective. I mean you'll remember Google Wave, it failed. Google Social Network, Google totally failed. But at the same time Google gave us Gmail, Google gave us YouTube. Right? If you are afraid to fail, you aren't going to make radical innovation. When we started Mindvalley University City Campus, Laura and Cardi who were collaborating with me to bring this sport, this was a crazy idea and there was a strong possibility of failure. And actually in Mindvalley, I can tell you it's around the same statistic. Roughly 40% of our crazy ideas fail. But if we weren't taking that risk to create crazy ideas knowing that it's acceptable to fail, we wouldn't be innovating. And that's a really important lesson. So you want aspirational objectives in the mix. 50% of your okrs must be aspirational. That's how we are able to create Mindvalley City Campus. That's how we're able to create these really bold things like the Quest app. Because failure becomes acceptable, failure becomes safe. In the company, okrs make failure safe. And as we go deeper, you're going to see why. Now the final thing is track for accountability. How do you track a person's movement towards an okr? Because you want to create an organization that's accountable. So this is what it looks like. This is a sample tracking sheet from Measure what matters, right? So an important thing about OKRs how do you make failure safe? Do not tie OKRs to compensation or bonuses. You completely separate them. You see, as soon as you tell your people that your okr, that their bonus or their comp is tied to their okr, what are they going to do? They're going to set achievable goals. You're going to create pressure. And so even at Google, at Intel, your okrs are not tied to your comp because they want people to stretch, they want people to risk. And failure shouldn't mean that you get demoted or that your salary gets cut. You want to make failure safe. So a really fascinating concept of okr, and this is how it's so different from the older school. Management by objective is that your people rate themselves. You do not grade them, they grade themselves on how they achieve their okr. So let's look at this example, right? So let's say you have four different salespeople and all of them had an okr to bring in 10 new customers this month. Now you can see all of them have graded themselves and they've written a self assessment. And in the progress bar, one person hits 70%, which means he brought in seven customers. One hit 100%, which means 10 customers. One hit 80%, one hit 90%. And they grade themselves on a scale of zero to one. Now notice, look at the first line. The guy who brought in 10 new customers. Sorry, the guy whose goal was to bring in 10 new customers, but he only brought in 7 or 70%. He gave himself a 0.9 score. And he explained why, due to a slump in the market, the OKR was significantly tougher to achieve than I thought. Our seven new customers represent an exceptionally good effort and outcome. So he gave himself a 0.9. Right. And you're allowing people to do that. Now look at the guy who actually hit 100%. That's row number two. You would think he'd give himself a 1.0, but no, he gave himself a 0.7. And he said, when I reached the objective, only eight weeks into the quarter, I realized I'd set the OKR too low. He was giving himself a lower score because he realized he had set a goal that was too small. That's a brilliant person. You want people like that. Number three, bring in 10 new customers. He hit 80%, so he brought in how many? Eight. He gave himself a 0.6, an unusually low score. And what he said is, while I signed eight new customers, it was more luck than hard work. One customer brought in five other behind her. Beautifully honest. Look at the final guy. He hit 90%, so he brought in nine customers. He only gave himself a 0.5. Though I managed to land nine new customers, I discovered seven would bring in little revenue. Again, honesty. See, when you give people the opportunity to self assess, if they lie, they are lying to themselves because they're grading themselves and so they're more honest. They are willing to take risks because they know that they are being rewarded for their overall character by the ability to dream big. Knowing that sometimes when you dream big, you are inevitably going to fail. And knowing that their salary isn't going to be docked, their bonus isn't going to be taken taken away, you're making failure safe.