How Google Sets Goals

There’s a surprising lack of public information on OKRs (Objectives and Key Results) – the goal setting and tracking philosophy used by Intel, Google and others. This past month Google Ventures Startup Lab released a great presentation video by Rick Klau on how Google does goal setting and tracking: “How Google sets goals: OKRs”

Some takeaways:

OKRs were introduced by John Doerr (Google board member) in 1999, based on his exposure to the use of OKRs at Intel.
OKRs are set and evaluated on a quarterly bases.
Objectives & Key Results should be bold, slightly out of reach, a little uncomfortable, unreasonable. Objectives are not necessarily measurable, Key Results must be measurable (e.g. NN monthly visits by Y/M/D)
Keep it focused, max 5 Objectives with 4 Key Results
OKRs are not a performance evaluation tool – not a standard element of annual employee evaluation. Although they are helpful for employees to draw upon and summarize/recall their impact over the past 4 quarters.
OKRs are graded each quarter. Each Objective score [0-1] can just be an average of the Key Result scores [0-1] for that objective. “Grades don’t matter except as a directional indicator.”
60% – 70% accomplishment is good. 40% is bad. 80%+ means your goals are too easy. The scores provides data about the individual and teams’ ability to accomplish certain goals.
Everyone’s OKRs are public (part of the employee directory listing)
Company-wide quarterly meeting to examine the top-level OKRs. This provides an opportunity to calibrate and re-prioritize.
Needs alignment, buy-in and participation from the top on down. Cannot be half-hearted.

Here are some example OKRs that Rick established for his first quarter working for Google as Product Manager on Blogger. Included are the grades [0.0 – 1.0] assessed at the end of the quarter:

Objective: Accelerate Blogger Revenue Growth [0.7]

Key Results:

Launch “Monetize” tab to all users [1.0]

Implement AdSense Host Channel Placement Targeting to increase RPMs by xx% [0.3]

Launch 3 revenue-specific experiments to learn what drives revenue growth [0.7]

Finalize PRD for Blogger Ad Network, secure eng allocation to build in Q1 [0.8]

Objective: Grow Blogger traffic by xx% over organic growth [0.45]

Key Results:

Launch 3 features that will have a measurable impact on Blogger traffic [0.6]

Improve Bloggers 404 handling, extend time on site and pageviews per session on sessions that start with a 404 error by xx% [0.3]

Objective: Improve Blogger’s Reputation [0.72]

Key Results:

Re-establish Blogger’s leadership by speaking at 3 industry events [1.0]

Coordinate Blogger’s 10th birthday PR efforts [0.8]

ID and personally reach out to top xx Blogger users [0.8]

Fix DMCA process, eliminate music blog takedowns [0.4]

Set up @blogger on Twitter, regularly participate in discussions re: Blogger product [0.6]

In the video, a few of John Doerr’s original presentation slides are displayed. Here they are: