Rick Klau agrees to what he got wrong about OKR

Remember Google's famous OKR video from back in 2012? Yup that one.

Over the past decade, it’s been a key educational piece and guiding light for many just getting started with OKR. But there are some things that just simply don’t make sense.

Over the years we’ve written about those matters ad nauseam to ensure OKR is used correctly. And the good news is that earlier this year, Rick Klau admitted to some of those mistakes and wrote an article on what his video got wrong. 😊

[fs-toc-h2]Rick Klau’s intro to OKR for Google Ventures

In 2012, Rick Klau, a Google Venture partner at the time, gave an in-depth introduction on OKR, using John Doerr’s original presentation from 1999 as the main reference.

OKR has evolved ever since. But Google, an authority in the space, hasn’t created a new video since, leading to confusion for OKR newcomers. They attempt to imitate Rick’s approach and examples provided in the video, and fail.

Some of those flaws also made their way into John Doerr’s famous book Measure What Matters, leading to even more confusion. (Read The two things Measure What Matters got wrong for reference.)

Don’t get me wrong, there’s a lot that John Doerr and Rick Klau have said and done that we agree with and are grateful for — OKR wouldn’t be where it’s at without them. I’m just glad that Rick Klau has finally admitted to some of the errors made. We can now rejoice and take a big step forward in making the OKR space a better place.

[fs-toc-h2]The issues in Rick Klau’s original video and why he fixed them

There are 4 main mistakes that Klau’s new blog corrects:

1. Key Results measure outcomes, not outputs

Good Key Results can be the make or break of an OKR. And unfortunately, the example Key Results in the video did not do OKR justice. However, Klau’s new blog iterates that “When identifying metrics for your key results, make sure they quantify impact and/or outcomes, not progress.”  He also admits to this, saying that “It should be noted: some of the example OKRs I included in the video are, well, not great!”

The two key mistakes with the given examples are that some:

1. Objectives include metrics
2. Key Results measure outputs

Before we get to the bottom of this, let’s quickly recap the anatomy of an OKR to make sure we’re all on the same page:

With that under our belt, let’s unpack one of the examples provided in the video:

Objective: Grow Blogger traffic by xx% over organic growth

KR 1: Launch 3 features that will have a measurable impact on blogger traffic

KR 2: Improve blogger’s 404 handling, extend time on site and pageviews per session on sessions that start with a 404 error by xx%

Firstly, this Objective is essentially a Key Result. In this case, your Key Results can’t really make the Objective specific, nor can they measure progress toward an Objective that’s already measurable. It just doesn’t add up.

KR 1 can easily be an Initiative — it’s measuring an output as opposed to an outcome. You might successfully launch 3 features, but will that guarantee an increase in traffic? Hard to say.  And KR 2 is simply confusing. There are so many things to decipher there.

So to make life simpler, here’s our suggestion:

Objective: Blogger gets more organic traffic than North America’s Highway 401

KR 1: Grow total Blogger traffic from x% to y%

KR 2: Increase total time on-site per session from x% to y%

KR 3:  Increase pageviews per session from x to y

Init 1: Launch 3 features that will have a measurable impact on blogger traffic

Init 2: Fix existing 404 issues

You get the point! However, if you’re looking to learn how to write great OKRs, here’s a great guide.

2. Individual OKRs just aren’t a thing

Rick Klau primarily talks about individual/personal OKRs in the video. Individual OKRs are introduced as the Objectives that the individual themselves or their manager wants them to work on. That’s not really how it works.

Klau’s new blog states that you should “ignore” individual OKRs, to “give the team a chance to see OKRs work well at aligning the teams across the org, and seeing the kind of larger impact that’s possible when those commitments produce compounding impact, before you worry too much about encouraging individuals to spend much time thinking about their individual OKRs.”

We’ve often said that Individual OKRs aren’t a thing. You may ask why? Well, that’s simply because OKR is about the organization as a whole, not the individual. Your org has a strategy, and annual company goals that set the overall direction. And then your teams come together, pacing themselves on a quarterly cadence to align to these directional goals. Keeping the company priorities in mind, they then define what’s most important to them and the organization. And that’s where execution takes place.

Yes, you’ll need one person to lead the goal in order to keep someone accountable for it. But that person isn’t necessarily going to do all the work themselves. OKRs are usually a collaborative effort and will rarely be achieved by one single person.

For more details on Individual OKRs and how to correctly work with them, tune into our conversation with Peter Kappus, an OKR consultant:

3. OKR shouldn’t replace your performance review system

In the video, Klau mentions that while OKR isn’t a performance evaluation tool, OKRs can be included as a part of the process. That’s not entirely wrong.

OKR is a large part of an organization’s performance management toolbox. And there’s no doubt that your people are the ones driving execution and working directly on those goals. So yes, OKR can provide great insight into an employee’s performance. But it should only be a minor part of your employee’s performance reviews to support their overall performance. Here’s how to successfully embed goals in performance reviews.

He goes on to say that he would have preferred for OKR to have been a bigger part of his annual evaluations. It would have provided a clear window into what he’d been doing over the quarters. And the OKR  grades would have been proof of the impact his work had. That’s pretty flawed — plus don’t get me started on why we think it’s useless to “score” or “grade” your OKRs.

Klau rightfully corrects himself to say: “if you use OKRs as a performance review (which often has a compensation component tied to it), you’re going to encourage your teams to sandbag their OKRs, and set entirely achievable goals so they can get their bonus. You’ll punish ambition – only the people who get 100% of their targets will get 100% of their bonus. That is entirely counter to the idea that OKRs (at least as embodied at Google, and as I embraced them in this video) should reflect ambitious goals, goals that you’re not at all confident you can achieve (but if you did achieve, would be amazing).”

4. Saying  “no” is as good as saying “yes”

When it comes to OKR, remember: less is more. Klau touched upon this in the video, suggesting to keep your OKRs to a minimum every quarter. He even shared his experience of once having 7 Objectives in one quarter and termed the experience “exhausting”. We agree with that notion but that’s not the whole thing.

Setting OKRs with your team each quarter isn’t a numbers game — you aren’t aligning on how many OKRs you should work on. But instead, you’re having difficult conversations around your focus for the quarter. That may even mean ruling out some of your best ideas. You should carefully pick your battles to ensure you’re working on things that truly matter.

At Perdoo, when setting quarterly OKRs, there are two things we ask ourselves:

1. Why is this important?
2. Why is it urgent?

In Perdoo, good ideas can always be added as “Draft” Objectives.

But when agreeing on the final OKRs for the quarter, and having answered those two questions, you may need to scratch those ideas completely or assign them to a future timeframe. And that’s ok. Don’t be afraid to say “no”.