Who Does What By How Much?
by Jeff Gothelf and Josh Seiden
Last updated
by Jeff Gothelf and Josh Seiden
Last updated
OKRs are a simple but powerful goal-setting framework used by leading companies in every industry imaginable. This book will help you learn how to succeed with OKRs by using them to put your customers at the center of everything you do.
Every team and organization wants to improve. OKRs help you get better, because they help your teams focus on the right work. Too many companies waste time, money, and energy working on the wrong things. Why? We lose track of what our customers want and need.
Everyone has a customer. (Yes, everyone—that includes you.) We all make something in our work, and we make it for other people. Those other people are our customers—though you may call them patients, students, constituents, or even coworkers. Our success depends on how those customers respond to what we make—and they’ll only respond positively if we deliver something that’s valuable to them. So, to succeed, we must figure out who our customers are, what customer responses drive value, and how (and how much) to change our customers’ behavior to achieve better results.
Objectives and Key Results help organizations do all of this by focusing teams’ goals on the question, “Who does what by how much?”
However, using OKRs isn’t just about writing goals in a new way. It requires changing the way you work, the way you think about your work, and the way you plan the work you’ll do in the future.
In Who Does What by How Much?coauthors and OKR experts Jeff Gothelf and Josh Seiden provide a clear, how-to guide for employees in all industries to learn how to put customers front and center, so you can get to work on the right things, navigate uncertainty and achieve greater success.
Why do people work on the wrong stuff? they lose track of what their customers want.
We're all generally in the business of serving other people's needs
Too often organizations don't have a clear understanding of
who these people are
or what they need
Everyone-yes, everyone has a customer: people who consume the things that you make at work.
Customer Behavior = Results
Do end customers buy more of your products?
Do they subscribe to your newsletter?
Do they refer your services to their friends and colleagues?
Do your coworkers use the presentation you create?
Do they adopt the plans you propose?
It is, in a nutshell, your value equation. It has three parts
"Who?" is your customer
"Does what?" is their behavior
"By how much?" is the measure of change in their behavior
Objectives are your high-level goal statement.
Key results are your measures of success, which we write using our simple value equation: who does what by how much?
It's a manual for understanding:
Who your customers are
How your work affects what your customers do
And how all of that will create results that matter-to you, your team, and your organization
OKRs have the ability to focus your work on delivering value to customers.
OKRs Are a Goal-Setting Framework
Objectives: The job of an objective is to inspire the team and provide a clear why.
Example: "Redefine local and regional air travel in North America to make it simpler, safer, and more accessible by the end of this decade."
Key Results: Key results are the way you measure progress toward your goal.
Example: "At least 35% of local and regional travelers, both air- and land-based, are now regularly using our flying vehicles."
Good key results measure value, and the best way to understand value is by measuring what people are doing, or doing differently, as a result of our work.
OKRs don't contain: solutions
They don't explicitly tell you how to achieve your goals
Define a problem-We want to win
Here's what winning looks like
What our customers are doing, and doing differently
Identify Customers:
Who are your colleagues?
What do they need from you?
What do you need from them?
How might you change the way you work to make everyone more effective?
"My work influences my colleagues' behaviors. They're my customers."
Your goal is to influence that behavior in a positive way: a way that benefits them by helping them be more successful and in a way that benefits you at the same time by creating value for your organization.
Example:
Objective: Make it easier for all necessary departments to provide design feedback by the end of the quarter.
Key Result 1: Brand managers (who) provide feedback (does what) 50% faster on each shoe design (by how much).
Key Result 2: The manufacturer (who) produces physical prototypes of each shoe design (does what) 100% faster (by how much).
These key results are what we call "outcomes."
An outcome is a change in behavior that creates value.
OKRs Are
A Process
A Culture: OKRs are a flexible and customizable framework
Successful OKRs are deeply embedded in the organizations' culture
Leadership champions them
A powerful tool for creating culture
They are all about changing what people do.
"Rule #1 of OKRs is that there is no Rule #1"
They are the qualitative expression of an organization's or team's strategy in the form of specific and time-bound goals.
Why are we trying to change the way we work? What's the benefit?
Help us to be customer-centric
Allow us to change course in response to learning
Create transparency
Grant people the autonomy to figure things out
Provide the alignment and focus that organizations need to manage complexity.
OKRs don't tell people what to do.
The benefits of measurement are numerous, and they should be clear and obvious. Here are just a few, it allows us to:
have better conversations about our work
assess whether or not our work is on track
share our success
talk objectively about our progress and the challenges we face
OKRs anchor teams' goals to a larger why
OKRs create alignment and focus
OKRs work for every organization and every role
No single right way to use OKRs
If you're having trouble, ask your-self
"Are we using OKRs in a way that helps us focus?"
If the answer is "no," then consider changing the way you're using OKRs to help you and your organization create more focus
Focus
Anti-pattern: People try to express all of their work as an OKR, which results in too many OKRs and unclear prioritization.
Real focus means fewer OKRs.
Solution: Use OKRs only for the current strategic priorities.
Autonomy
Individual teams are the closest to the work and, thus, are in the best position to judge how to create value in their area of responsibility.
Anti-pattern: Leaders define OKRs for the whole organization without the input of the teams themselves.
This is top-down governance that allows for no collaboration and grants no actual autonomy.
Solution: Teams set their own goals, linking each goal to a higher-level goal.
Alignment
Alignment and autonomy are two halves of the sam then. Teams using OKRs need to coordinate to ensure everyone - both the people on their individual team and everyone on adjacent teams-is rowing in the same direction.
Anti-pattern: Teams working on similar projects silo themselves, focusing only on their individual team's goals and limiting coordination with adjacent teams.
Solution: Teams working on similar projects share an OKR, uniting and focusing their efforts while driving intra-team transparency.
All teams can link their OKRs to "parent OKRs" at a higher level in the organization.
Accountability
Let teams declare their goals and then monitor and measure their progress.
Anti-pattern: Teams operate without concern for business results, focusing (sometimes in well-intentioned ways) on tasks that don't create value for the organization.
Solution: Teams use OKRs to set their goals transparently, working with peers and leadership to ensure these goals align with organizational goals.
Transparency
To maintain alignment, teams need to constantly share progress with one another and their leaders.
Anti-pattern: When teams don't share their progress consistently, or aren't used to doing so, they can default to limited communication, which causes duplicate efforts, conflicting or competing work, and an overall lack of alignment across teams.
Solution: OKR work and progress are shared publicly and broadly in a central system anyone in the company can see.
Agility
Work in short cycles to solve the problem at hand, track your progress, and pivot as needed
Anti-pattern: Teams use OKRs in a set-it-and-forget-it fashion. They don't check in often enough, and/or they don't have permission to make changes based on what they learn from customer feedback.
Solution: Teams check in on a weekly, monthly, quarterly, and annual basis to ensure goals and work are aligned with strategic and market priorities.
Customer-centricity
OKRs provide a way to focus on work that makes a real difference by creating outcomes - customers doing something differently in a way that's valuable.
Anti-pattern: Teams write OKRs that focus on making stuff. Stuff isn't valuable unless it creates a positive outcome.
Solution: Teams write OKRs where both the objective and the key results are based on a better state for the customer as visible through their behavior.
Success means that you've created a valuable outcome.
The core idea of this model is that we make outputs, which hopefully create outcomes.
Ultimately, we hope that the outcomes contribute to our long-term goals. We call those long-term goals " impact."
Just because you make something doesn't mean that you've created value.
Output: the people involved made something
Example:
Option 1: An output-based key result:
Manufacture 100,000 Google Glass units for public release by 03 2013.
Option 2: An outcome-based key result:
10,000 people purchase and become active users of Google Glass by Q4 2013.
Outcome: An outcome is the measurable change in human behavior that we see when people receive our output.
These are your key results.
Example: "25% of Google Glass customers use the product every day."
Impact: Impact is the high-level, long-term measure of success.
Example in practice:
Objective: Be the best place to work in our industry within one year
Key Result 1: Increase the number of employees who would recommend us as a place to work by 10% compared to last year.
Who? Employees
Does What? Recommend the organization as a place to work
By How Much? At a 10% higher rate than last year
Key Result 2:
Reduce regrettable turnover by 10%.
OKRs work when they reflect and express your strategy
Strategy: an opinionated and coherent approach to addressing an important challenge.
It identifes a challenge and defines how to deal with it
Important challenges are ones that don't have obvious or easy solutions
When you select a challenge to work on, you're making the first important decision of strategy:
Where should we focus?
Why should we work on this one instead of that one?
Strategy is opinionated
Strategy involves choices
It's about what you're choosing to do and how you're choosing to do it.
Strategy is coherent
The various parts of your strategy must play well together and must reinforce one another.
Example: your strategy is to create a luxury brand that sells watches.
You want to create a brand that stands the test of time
To do that, you'd probably set your prices quite high,
but you also need your quality to be high
At the Organization-wide Level
What's your goal?
What are the obstacles in the market that your organization must overcome to achieve that goal?
What challenges do you face?
At the Team Level
How your team can contribute to the organization's goals
"What is the organization trying to achieve, and what work can this team do to advance or support those goals?"
Consider three questions:
What does your team have control over?
Your team's work doesn't (and can't) touch every part of the business
Your OKRs should focus only on what you can control and change.
Which customers will you target first?
What behaviors from this target audience drive business results?
Are there parts of the customer journey keeping your customers from exhibiting those behaviors?
External Customers
Internal Customers
Is there something you work on that can help make the people who DO work with customers more effective?
Make a list of the different people and roles in your market.
You can do this work by yourself or brainstorm the list with your team.
Aim for somewhere between three and six plausible roles in your market.
Don't have to decide which group of people are going to be the focus yet.
At this point, it's more important to just create a small set of candidates.
Start to break things down by telling a story about our customer and their journey with our product or service
Example:
Pull out the behaviors
Our customer takes the subway to work.
Our customer buys a donut and coffee after getting off the train.
Our customer carries the donut and coffee to their office.
Our customer eats the donut and drinks the coffee at work.
To be successful, then, we'd be looking for...
A high number of people who take the subway to work: Foot traffic is a potentially important measure for us.
People exiting the subway and walking to work: This is the specific kind of foot traffic that will help
Here are the measurements that we can nominate for potential key result targets:
Foot traffic to our location (the number of potential donut buyers who pass our location each day)
The number of people who buy both a donut and a coffee
The number of people who order to-go versus those who eat their donut on-site
...
Tell your story about the person or people who are the focus of your work. If you want, write your story out as you work, as in the diagram below.
Pay particular attention to what people are doing in the story.
Pull out somewhere between three to six important behaviors: things people do that are important, that create value, either for them, for you, or ideally, both.
Write down those important behaviors, using the who / does what format
Make sure every box is written in the (who) (does what) format.
Make sure your story focuses on steps within your scope of control.
Look for obstacles.
Inspirational: It connects the team's work to a broader purpose.
Qualitative: It describes a strategic aspiration without quantifying it.
Timeboxed: It includes a deadline by which you believe you will achieve it (or by when you'd like to)
Specific: It focuses on a key element of your strategy instead of making a generalization.
How many OKRs should we create?
At the organizational level, you want to have a small set of OKRs-probably two or three that represent different dimensions of your business.
If you're a big organization, you might want to have one OKR per business unit or other major division.
Less is more: Start with one and build from there
At the team level, we recommend having only one OKR.
In both cases, we recommend setting two or three key results per objective.
Gather what you need.
Your organization's strategy and your team's strategy
Your team's most important obstacle
Your organization's high-level OKRs
Your scope of control
A list of potential customers to focus on
A list of potential outcomes that you might pursue
Identify your biggest obstacle.
At the organizational level: Think about how to make the whole company successful.
At the team level: Think about how your team can contribute to the organization's goals.
Turn your obstacle into a positive statement.
To write your objective, take the big obstacle you identified and turn it into a positive statement.
If you solve the problem, what does that look like?
Self-Check your objective.
Make sure that it meets the following criteria:
It's a positive statement.
It's inspirational.
It's qualitative.
It's timeboxed.
It's specific.
It doesn't contain a solution.
Find your parent.
Create alignment in the organization
Every OKR has a parent OKR
Key results are the way you measure progress toward your goal.
To create your key results:
Gather the important behaviors that you wrote down when you were telling your customer story.
Turn this into two to four statements that use the format of our titular question: [who] + [does what] + [by how much]
Make sure your key results are outcomes
Make sure that your key results aren't solutions
Make sure you can answer "yes" to the following question:
If we achieve all of these key results, will we have achieved our objective?
Many teams (and consultants) advocate for "scoring" your OKRs
We're not particularly enthusiastic about scoring OKRs
Scoring is the process of giving a grade to your performance
At the end of the quarter, you've grown foot traffic but only by 50%
Is that good?
Is that bad?
Should you continue to work on that OKR? Should you revise it? Should you abandon it?
Our favorite system of scoring is the simplest. It has four levels:
We exceeded expectations: you not only hit your target numbers, but you also far outperformed the target you set.
We delivered: This means you hit the target that you set.
We fell short: This means that you made progress, you created some value, and you can claim success.
We failed to deliver: you didn't create the value that you set out to create.
Top-down and bottom-up collaboration leverages the knowledge and points-of-view of both leadership and teams, allowing organizations to set goals with deeper understanding.
Top-down
Leadership determines the strategy and high-level OKRs for the organization
Communicates them clearly to every team and every individual
Bottom-up
Each team creates its own OKRs that fall within its sphere of influence
Have a clear relationship to a parent OKR, and function to advance for the organization's high-level OKRs
Collaboration
All teams bring their OKRs to their leaders and peer teams and explain why they chose their goals
And how they believe achieving those goals will help the organization reach its high-level OKRs
Revise and publish
Following the collaborative conversations, teams revise their OKRs as needed, then publish their final OKRs for the period
Should everything get an OKR?
Make a distinction between important business as usual work and OKRs
Most organizations distinguish between OKRs and Business as Usual
(BAU) metrics
Where do the numbers come from?
Choose numbers that are realistic but also ambitious enough to make a difference to the organization
Does every key result have to be an outcome? Every time? Really?
Yes, every one, every time.
Should we have individual OKRs?
No. Keep OKRs at the team level
The moment your key result becomes an output : your team stops working on the problem of creating
Does every team need its own OKRs?
No, in some cases, teams can share OKRs
Dependent teams can share an OKR and work together to achieve it
Should OKRs be cross-functional, or should each discipline have its own?
OKRs should not be discipline-centric
They should be cross-functional
The most common pitfalls teams encounter when writing OKRs are as follows:
Writing key results as task lists
Reverse engineering key results to fit your team's to-do lists
Choosing key results that are measures of system behavior instead of customer behavior
Sandbagging key results metrics
The process begins with setting organizational strategy and goals : this happens annually each year.
Teams will set their OKRs annually and revisit them during their quarterly check-ins.
Once our goals are set, we get to work
One of the most magical properties of OKRs is that the only thing that matters is results
Execution is timeboxed : work on something until your next check-in meeting
Sometimes, you know exactly what you need to do to create results
Get started and monitor your results
Sometimes, you're not sure about the best way to generate results
Might have a list of promising ideas
Sometimes called research or discovery, this refers to the learning tactics that you can use to test your ideas and learn why they're working or not working.
Most organizations use two different kinds of check-ins:
Monthly: smaller and less formal
Gather your team, immediate stakeholders, and key collaborators to look at the results you've generated so far
Share what you've learned along the way
Evaluate your progress
Then decide on any adjustments you might need to make to your tactics
Quarterly: more structured, with a greater emphasis on strategic course correction
The opportunity to either recommit to their OKRs, adjust them if necessary, or in some cases, even discard them and write new ones
The crucial element underlying every stage of the OKR Cycle is communication:
Consistent
Continuous
Transparent among all stakeholders
What OKRs are not:
They don't contain solutions to your problems
They aren't task lists
They aren't project plans
They aren't specifications or requirements
They aren't to-do lists
Leaning = at the heart of successful OKR implementation.
Review the problem that you are trying to solve.
Key result is an outcome and should be written in this form:
who + does what + by how much
The problem lives inside this statement
You're trying to get your "who" to do more or less of something
Brainstorm solutions for ways to achieve your key results.
Ways that you might get your "who" to "do what."
Decide what you are going to work on first and how you are going to approach it.
Execute: Do the work using an experimental, learning-centric, and customer-centric approach.
Measure your results.
OKRs are all about creating results.
Whether you're executing or learning, you're trying to make progress and generate results.
When you complete a piece of work, you want to measure your results.
Evaluate and learn.
Consider what you ve learned from that work.
Prepare to start another cycle of learning and execution.
Repeat the process -executing, measuring, evaluating, and learning — as you work toward your key result.
It can be helpful to express your ideas as testable hypotheses.
We believe that [making or doing this thing]
Will achieve [this outcome].
Example:
We believe that running ads in the local newspaper Will increase foot traffic in our stores by 50%.
Or
We believe that doing this:
Running ads in the local newspaper
Will achieve our outcome, which is:
Who: breakfast buyers
Does what: enter our store
By how much: increase of 50%.
2 kinds of data:
Quantitative data = numbers
Measurements of customer behavior
Often gathered through analytics tools
Tell you what is happening and how well you're progressing
Qualitative data = words (and things you can't count)
What you get from your interactions with your customers
It helps explain the numbers
Can also help you figure out what adjustments you might want to make to your work
3 kinds of OKR check-in meetings:
Weekly check-in: a pulse check
Used to quickly monitor progress
How the team is feeling about that progress
Monthly check-in: for teams to review their progress and make decisions about what to work on next
This is typically a meeting of the immediate team and supervisor.
Quarterly check-in: for teams and their leaders.
To determine if they've hit their OKRs
If they should set new ones or keep working toward the ones they've had
This meeting is usually attended by a larger group, including more senior leaders and peer teams
The focus is on the bigger question: How are each team's results contributing to the larger goals of the organization?
Retrospective meeting: used to talk about and improve the working process and the process of using OKRs.
How confident are you that we're going to achieve our result?
Use any scale you like —some teams use a quick vote, holding up zero to five fingers to indicate their confidence level.
One thing to keep in mind, is that "scoring" is a secondary assessment.
When all is said and done, it's not the scores that matter-it's the results.
Who: The immediate team plus stakeholders
Opening
Share the data
Work-in-progress review
Optional: Confidence review
Stakeholder context updates
Middle
Learning, issues. obstacles, and opportunities
Obstacles
OKR confirmation: conform or adjust OKRs
Closing
Next steps
Check-ins are regular meetings that help you mitigate the risks of your assumptions (OKRs).
To filter your work with OKRs, gather all of your to-do lists, plans, backlogs, commitments, etc.
Then, create four lists:
A Keep Doing list
A Maybe list
A Stop Doing list
A Start Doing list
Then, for every existing work item, ask: Will this activity help us achieve one of our key results?
If the answer is "yes," add the item to a Keep Doing list.
If the answer is "maybe," add it to a Maybe list.
If the answer is "no," add the item to a Stop Doing list.
Step 1: Change the question.
The old questions: What will we build? When will we be done?
The new questions: What results are we seeking? What outcomes are we trying to create? What will people be doing differently if we succeed?
Step 2: Embrace learning activities.
Learning activities can provide more answers-and better answers-than your guesses can.
Step 3: Build an outcome-based product roadmap.
Instead of thinking about a roadmap as a fixed plan
Think about your outcome-based roadmap as a communication tool that shows your intentions.
Step 4: Review your roadmaps at the beginning of each new cycle.
Why do you want to use OKRs? What are you trying to improve? What problem are you solving?
Be clear about that before you start
Get people invested
Be clear about the vision to build buy-in.
What will be better on the other side?
How will people's lives improve?
Start with Why
Provide a Clear Strategy and High-Level OKRs First
Without strategy, what will people align around?
Trust the Process and Your Teams
OKRs replace command and control leadership with aligned autonomy
OKRs remove prescription from the equation
Trusting your teams isn't always enough
Ensuring your teams know how to proceed once the prescriptive assignments have been removed
Aligned autonomy requires transparency
Support Learning Work
Experiment and look at the data and feedback you get from customers-again and again and again
Provide Universal Access to Data
Data-both qualitative and quantitative-is the heart of successful OKR implementation
Teams across the company need access to it
Create a Safe Culture of Learning
Foster psychological safety and celebrate learning in everything
Foster psychological safety and celebrate learning in everything
"a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes, and that the team is safe for interpersonal risk-taking."
Build a culture that celebrates learning by making learning the path of least resistance.
Model the Values You Want to See in Your Culture
For new cultures to take hold, leaders must model them.
In the trenches with them
Design the organization for collaboration and agility
Enable Reorganization
some of new activities may also require a new team or business entity altogether
When you look at the business through the lens of the OKRs you're working toward, your work is no longer local to one team: It's collective.
Tie Everything Back to OKRs
Your leaders should do this for you:
Tell you a compelling story that makes a clear connection between the OKRs and their decisions and directives
"Which of our OKRs will that help achieve?"
"If we can't tie it to our OKRs, it's hard to justify prioritizing
Changing the Responsibilities of Middle Managers
Use your skills in new ways, helping you truly lead instead of just (micro-)manage:
Ensuring the team's OKRs and work are aligned with strategic direction
Clarifying the team's purpose
Setting guidelines and constraints around the team's scope of work
Clearing the team's path of organizational hurdles and ensuring they have what they need to do their best work
Making key decisions when the team needs guidance
Make sure that your incentives are driving people together rather than creating conflict
Expect people to orient their work toward those OKRs
Do not create individual OKRs and then use them for individual performance management.
One way to evaluate individual performance in the OKR world is to use the 7 key principles of OKRs: focus, autonomy, alignment, accountability, transparency, agility, and customer-centricity.
Focus, Accountability, and Prioritization
Evaluate how well the individual used their time in service of the OKR.
Agility and Learning
Evaluate how well a person incorporates learning activities into their work cycle and how well they use evidence to inform their work and make decisions.
Alignment, Autonomy, and Collaboration
Evaluate how well individual team members collaborate and communicate with one another.
Evaluate how well they balance personal needs, local interests, and company mission.
Transparency and Knowledge-Sharing
Evaluate how well individual team members share information with one another, as well as their ability to share information effectively across the organization.
Customer-centricity
Evaluate how effectively an individual works to understand the customer and their experiences and serve their needs.
Instead of cascading, think of scaling your OKRs like a family tree.
Every OKR needs to have a parent.
Every goal set at every level of the organization supports the higher purpose. You can trace it all the way up to the strategy.
Every goal has an owner. Owners drive accountability.
Leaders still get a top-down discipline while allowing for flexibility and creative contribution from the bottom up.
Requires people to do that work.
This can be a group of coaches, managers, or a blend of the two.
Don't cascade your OKRs down to your teams from the top.
Set high-level goals and let the teams provide their own OKRs supporting the higher goal.
