Goal Setting

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June 30, 2022

Leadership & Behavioral Interview 

Setting goals can help an organization get to where it wants to be.

Set goals to;

  • Align efforts
  • Communicate objectives
  • Measure process
  • Help teams achieve more

Setting challenging and specific goals can further enhance employee engagement in attaining those goals.

OKRs (Objectives and Key Results) to try to set ambitious goals and track progress.

OKRs at a glance:

  • Objectives are ambitious and may feel somewhat uncomfortable
  • Key results are measurable and should be easy to grade with a number
  • OKRs are public so that everyone in the organization can see what others are working on
  • The “sweet spot” for an OKR grade is 60% – 70%; if someone consistently fully attains their objectives, their OKRs aren’t ambitious enough and they need to think bigger
  • Low grades should be viewed as data to help refine the next OKRs
  • OKRs are not synonymous with employee evaluations
  • OKRs are not a shared to-do list

Using OKRs is different from other goal-setting techniques because of the aim to set very ambitious goals. When used this way, OKRs can enable teams to focus on the big bets and accomplish more than the team thought was possible, even if they don’t fully attain the stated goal.

OKRs can help teams and individuals get outside of their comfort zones, prioritize work, and learn from both success and failure.

  • Where do I want to go? -> Objectives.
  • How will I pace myself to see if I am getting there? -> Key results / milestones.

stretch goals -> goals that are just beyond the threshold of what seems possible -> building blocks for remarkable achievements in the long term

Creating unachievable goals is tricky as it could be seen as setting a team up for failure. However, more often than not, such goals can tend to attract the best people and create the most exciting work environments. Moreover, when aiming high, even failed goals tend to result in substantial advancements.

  • success -> achieving 70% of the objectives
  • extraordinary performance -> achieving 100% of the objectives

Alignment. Once the organization knows what it’s focused on and how it will measure success, it can become easier for individuals to connect their projects with the organizational objectives.

Discipline & prioritization. It can be hard for any one team in a company to say no to a good idea, a worthwhile project, or a needed improvement. Once everyone agrees on what the most important objectives are, it can be easier to say no to the less important ideas. Saying no isn’t a political or emotional debate, it becomes a rational response to a commitment that the entire organization has already made.

Communication. OKRs should be public within an organization so that every employee knows the organizational objectives and metrics for success.

OKRs are a great way to help everyone in the company understand what’s important and how you’re going to measure what’s important.

It’s essentially a great way to communicate strategy and how you’re going to measure strategy.

As you grow a company, the single hardest thing to scale is communication. It’s remarkably difficult. OKRs are a great way to make sure everyone understands how you’re going to measure success and strategy.

Tips for setting objectives:

  • Pick just three to five objectives – more can lead to over-extended teams and a diffusion of effort.
  • Avoid expressions that don’t push for new achievements, e.g., “keep hiring,” “maintain market position,” “continue doing X.”
  • Use expressions that convey endpoints and states, e.g., “climb the mountain,” “eat 5 pies,” “ship feature Y.”
  • Use tangible, objective, and unambiguous terms. It should be obvious to an observer whether or not an objective has been achieved.

Tips for developing key results:

  • Determine around three key results per objective.
  • Key results express measurable milestones which, if achieved, will directly advance the objective.
  • Key results should describe outcomes, not activities. If the KRs include words like “consult,” “help,” “analyze,” “participate,” they’re describing activities. Instead, describe the impact of these activities, e.g., “publish customer service satisfaction levels by March 7th” rather than “assess customer service satisfaction.”
  • Measurable milestones should include evidence of completion and this evidence should be available, credible, and easily discoverable.

Poorly written OKRs can;

  • Create confusing strategy
  • Undermine internal metrics
  • Cause teams to focus on maintaining the status quo.

When developing OKRs, try to avoid these traps:

  • Miscommunicating stretch goal OKRs – Setting stretch goals requires careful communication within the teams delivering the objectives as well as other teams that depend on the work being delivered as part of the stretch goal OKR. If your project depends on another team’s objectives make sure you understand their goal-setting philosophy. If they are using stretch goals you should expect them to deliver on about 70% of their stated OKRs.
  • Business-as-usual OKRs – OKRs are often written based on what the team believes it can achieve without changing anything they’re currently doing, as opposed to what the team or its customers really want. To test this, stack rank the team’s current work as well as newly requested projects in terms of value versus effort required. If the OKRs contain anything other than top efforts, then they are just business-as-usual OKRs. Drop low-priority efforts and reassign resources to the top OKRs. There are some objectives that will stay the same quarter after quarter, like “Ensure customer satisfaction is over XX%,” and this is ok if that objective is always a high priority. But the key results should evolve to push the team to continue to innovate and become more efficient.
  • Sandbagging – Teams who can meet all of their OKRs without needing all of their team’s bandwidth may either be hoarding resources, not pushing their teams, or both.
  • Low-value objectives – OKRs should promise clear business value – otherwise, there’s no reason to expend resources doing them. “Low-value objectives,” even if fully achieved, won’t make much of a difference to the organization. Ask, could the OKR get a 1.0 under reasonable circumstances without providing direct organizational benefit? If so, reword the OKR to focus on the tangible benefit.
  • Insufficient key results for objectives – If the key results for a given objective don’t represent all that is needed to fully achieve that objective, an unexpected miss on that OKR can happen. That can cause delays of both the discovery of the resource requirements as well as the discovery that the objective will not be completed on schedule.

Commit first to organizational objectives, so that teams and individuals can set their own objectives in service of those larger goals. This can help to create alignment throughout an org.

Not every organizational OKR needs to be reflected in every team OKR. It’s possible that a team’s OKRs will focus on just one of the organizational OKRs. But there should be some connection between team OKRs and at least one of the organizational OKRs.

One way to set these team OKRs is to have all of the team leaders meet to set goals.

When creating priorities, it is helpful to pay attention to the organizational OKRs and check:

  • Do the team priorities connect to any of the organizational key results?
  • Do the team priorities make it more likely that the organization will successfully achieve the organizational OKRs?
  • Are there things missing that others think this team should be working on?
  • Are there more than three priorities?

One thing OKRs are not is a checklist. They are not intended to be a master task list of all the things the teams will work on in a quarter. If a team treats this as a shared to-do list it may result in getting overly prescriptive about what the team wants done, rather than what the team wants to achieve. Use OKRs to define the impact the team wants to see, and let the teams come up with the methods of achieving that impact.

Things to consider when grading OKRs:

  • The sweet spot for OKRs is somewhere in the 60-70% range. Scoring lower may mean the organization is not achieving enough of what it could be. Scoring higher may mean the aspirational goals are not being set high enough. For organizations who are new to OKRs, this tolerance for “failure” to hit the uncomfortable goals is itself uncomfortable.
  • OKRs are not synonymous with performance evaluation. This means OKRs are not a comprehensive means to evaluate an individual (or an organization). Rather, they can be used as a summary of what an individual has worked on in the last period of time and can show contributions and impact to the larger organizational OKRs.
  • Publicly grade organizational OKRs. At Google, organizational OKRs are typically shared and graded annually and quarterly. At the start of the year, there is a company-wide meeting where the grades for the prior OKRs are shared and the new OKRs are shared both for the year and for the upcoming quarter. Then the company meets quarterly to review grades and set new OKRs. At these company meetings, the owner for each OKR (usually the leader from the relevant team) explains the grade and any adjustments for the upcoming quarter.
  • Check in throughout the quarter. Prior to assigning a final grade, it can be helpful to have a mid-quarter check-in for all levels of OKRs to give both individuals and teams a sense of where they are. An end of quarter check-in can be used to prepare ahead of the final grading.

Some teams find that they are best revisited a few times a quarter. In this manner, they can serve as a calibration tool, giving everyone an opportunity to adjust to new information, abandon objectives that are clearly not going to happen, and increasing attention on borderline objectives that will benefit from additional resources.

How often a team checks-in will depend on their own seasonal needs, how good the communication within the team already is, and how well the team is doing at predicting outcomes based on their ability to execute.