OKRs and Culture

A company’s culture cannot be formed in a Powerpoint presentation. TriStrategist thinks that a company’s core quantitative measurement system can be one of the most important influencers of an established company’s culture, whether it is linked to goal setting, performance, compensation or time usage. For an established company, the influences to its culture from its founders’ glorious past or larger-than-life persona have already waned with time or scale. With effects subtle yet persistent, the company-wide “number” systems are usually interpreted by every employee in day-to-day job as “what are important” for the company and for individual’s success, and the closest reference to anything “objective” or “concrete”. Thus it’s consequential to get the measurement system right for a desired culture. For example, if a company’s most frequently visited number-entry system is a timesheet tool, then the company is surely not encouraging creativity, because creativity can never be tracked by hours. Usually the opposite effect is true.

OKRs(Objectives and Key Results), a simple quantitative goal-setting and measuring system, was introduced by Intel but made famous by Google. That’s how Google uses it to encourage its large pool of “smart creatives” (a term by Eric Schmidt in the 2014 book “How Google Works“) to think big, take risks and achieve results. OKRs can be applied to both individuals and teams. For example, “Increase customer traffic to the site by 20% by end of Q2.” is a clear goal and the progress can be measured and scored (1-100%) at the end of the time period. If anyone often scores 100% for all his/her goals, it could mean that the goals are set too low.

Google’s OKR implementation, as many other Google ventures, has its own characteristics and helped enhanced their desired cultural benefits when the company scales. Main ones are:

1. Link the big picture to concrete and measurable results. This is not the “Underpromise-and-Overdeliver’ type of the corporate game-playing. The precedence has to be set from the top on aiming at very ambitious goals towards the visions, but with deep thinking on measurable executions.

2. Transparency. All OKRs, from CEO to everyone else are published. Read one person’s OKRs can quickly understand what motivates him/her the most.

3. Alignment in a large and flat organization. Each quarter the top leaders will present and explain their well-established OKRs in a company meeting and grade themselves against the previous quarter OKRs. Failures are candidly discussed from the top. Everyone understands the shared stretch goals and priorities for the company and for the team.

4. Encourage risk-taking and a healthy environment of innovations. OKRs are scored, but the scores are not tracked or used for punishment. If the top leaders set high goals and are tough in grading themselves, failures become more the motivators in an innovation-driven environment. People can honestly grade their performance on goals. Hard goals and endeavors are valued. BAU(Business-as-usual) stuff are not even allowed in OKRs.

5. Forget about competitions. In the current highly competitive technology age, for any company or individual, creative innovation is the only way to stay ahead and not fall into oblivion. Well-formed and stretched OKRs will keep employees excited and focused on where they want to go instead of chasing competitions on things of the past.

How to change the culture of an established company which no longer has the startup ease and glaze? Culture change can start from something simple. “Aiming for simplicity” is also one of the lessons that Steve Jobs taught us from his legacy. OKRs is one such example. TriStrategist thinks that for any established company to change the culture, watch your company-wide number systems. If they are obsolete or cumbersome, change them quickly for something simple yet well-aligned to the desired culture. Then watch for the influences and make adjustments as needed.