PDF Summary:Measure What Matters, by John Doerr
Book Summary: Learn the key points in minutes.
Below is a preview of the Shortform book summary of Measure What Matters by John Doerr. Read the full comprehensive summary at Shortform.
1-Page PDF Summary of Measure What Matters
Is your company focused on the right things? Do you really understand what goals will move your company forward, and how to measure them? OKRs can help. Measure What Matters shows you how to use the OKR management system to identify your priorities, set ambitious goals, clearly measure and track them, and motivate and align everyone on your team.
This is the system that helped Larry Page and Sergey Brin turn a small startup called Google into one of the most ambitious and innovative companies in the world. Whether your business is large or small, OKRs are invaluable tools. Learn to implement the same management system used by Google, Intel, LinkedIn, Disney, Twitter, and Spotify.
(continued)...
The so-so key results are more measurable: "Key result #1: achieve a lap speed that's 2% faster. Key result #2: decrease time during pit stops by an average of 1 second per stop." However, these don't specify how to decrease pit-stop time.
In contrast, the best key results include specific tactics on how to decrease the pit-stop time. They add, "Key result #3: decrease pit stop errors by half. Key result #4: spend 1 hour per day practicing pit stops."
-->
In the example above, the weak key results aren’t specific enough. The so-so key results are better because they’re measurable and specific, but they don’t specify how to decrease pit-stop time the way the strongest key results do.
Superpower #2: Align
OKRs are good at aligning companies because OKRs are always public. CEOs can look at the goals of their executives, managers, and junior staff, and junior staff can (and should) look at the goals of their bosses and the CEO. This allows people to coordinate their goals with those of the company and their peers.
Use Both Top-Down and Bottom-Up Alignment
Generally, there are two approaches to alignment: top-down and bottom-up. In the top-down approach, directives start with the CEO and cascade down through the ranks to the junior employees. In the bottom-up approach, junior employees working on the frontlines, the people who have the most access to customers and product issues, identify pressing needs and relay them up the chain of command to the CEO.
The most effective companies are aligned in both directions, with half of an employee’s objectives coming from the top and half set by the employee herself. If you’re assigning an objective to one of your employees, make sure you clearly demonstrate how the objective connects to the company’s top priorities.
Employees should set most of their key results themselves. People who choose their goals take more responsibility for reaching them.
Superpower #3: Track
OKRs are always measurable, and at the end of each OKR cycle you score them. These scores help you track your progress, and they indicate when you need to double down on a particular goal or when you should revise or abandon it.
During the OKR cycle, check-in with your manager weekly or monthly to discuss your OKR progress and decide among four options for each goal:
Option #1: Continue the objective or key result—If everything’s going well and you’re making progress, keep going.
Option #2: Revise the objective or key result—If changes in your environment or workflow have caused the goal to get off track, update it.
Option #3: Start a new objective or key result—As conditions change, you may need to add new goals. If you already have five objectives, put one or two on the backburner to make room for the new goal.
Option #4: Stop an objective or key result—Some goals become irrelevant or impractical. Don’t stubbornly cling to a goal just because you set it. If it no longer serves your larger purpose or the company’s, toss it.
Scoring OKRs
At the end of the OKR cycle, you score and reflect on your OKRs. The wrap-up phase consists of three parts: objective scoring, subjective self-assessment, and reflection.
Objective Scoring
The employee and manager assign a score to the objectives. The simplest way to score an objective is to average the completion rates of its key results. One way to score is to use a scale of 0.0 to 1.0, based on how much of the key result was completed.
- 0.7-1.0 is a “green” score, meaning the individual or team achieved the goal.
- 0.4-0.6 is a “yellow” score, meaning the individual or team made progress but didn’t complete the goal.
- 0.0-0.3 is a “red” score, meaning the individual or team failed to make progress toward the goal.
Subjective Self-Assessment
Objective data are important, but they don’t always tell the whole story. Low numbers could conceal a strong effort, and strong numbers could be inflated.
For example, let’s say your objective is to recruit more customers, and one of your key results is to make 50 phone calls to potential customers. You end up making 35 phone calls, for an objective score of 0.7. On paper, this looks like a success. But if you waited until the last minute and rushed through your calls, signing only 1 new customer, the objective score of 0.7 isn’t really indicative of your performance.
For this reason, it’s important to balance objective scores with subjective self-assessments. Work with your manager to compare objective scores with the circumstances that led to them.
Reflection
To learn from your experiences and scores, use these questions as a jumping-off point for group discussion and self-reflection:
- Did you meet your objectives? If you did, what factors helped you be successful? If you didn’t, what roadblocks did you face?
- What have you learned that you want to keep in mind during the next OKR cycle?
Superpower #4: Stretch
Some of your OKRs should be especially challenging. Expect “stretch OKRs” to score between 0.4 and 0.6. Setting challenging goals allows your company to continue innovating.
This is how Google distinguishes between regular objectives (“committed objectives”) and stretch objectives (“aspirational objectives”):
- Committed objectives are the goals that need to be met within a set period of time for the company to prosper. Additionally, these goals need to be 100% or near-100% complete (or receive a score of 1.0) by the deadline. Committed objectives include sales and revenue goals around product releases, customer satisfaction, and hiring.
- Aspirational objectives are goals that reflect the bigger picture, outside of day-to-day needs, and focus on big, ambitious ideas.
Google doesn’t expect everyone to achieve their aspirational objectives, and failure is built into the process—in fact, the average rate of failure at Google is about 40%.
Your company’s balance of committed and aspirational objectives will depend on your answers to the following questions:
- Do we want to break into a new market next year? Do we have some extra cash to play around with? Can we afford to make a risky bet? (If yes, favor aspirational objectives, or stretch goals.)
- Do we want to further establish our current position in the market? Are we in survival mode, just trying to stay afloat? (If yes, favor committed goals.)
Regardless of your answers, every company should have at least one or two aspirational objectives. To determine yours, ask, “What would incredible look like for our company?”
What Are CFRs?
Measure What Matters also explores the system of continuous performance management, an alternative to annual performance reviews. This system allows managers to give feedback regularly, help employees improve throughout the year, and address issues as they arise.
CFRs are your tools for implementing a continuous performance management system.
- C: Conversations between employees and managers
- F: Feedback both from and to managers and among peers
- R: Recognition from peers and managers for small and large contributions toward goals
C: Conversations
Conversations happen weekly or monthly, in both formal and informal environments.
As a manager, your conversations with employees cover 5 main topic areas (but you don’t need to cover all of them in one conversation):
- Reflecting on past goals and setting new ones.
- Updates on OKR progress, problem-solving if necessary.
- Coaching: Guide the employee in his or her thinking about the OKR approach, and encourage the employee to offer feedback to help you, the manager, do your job better.
- Professional development: Work with the employee to develop the necessary skills, knowledge, and mindset to succeed at the company.
- “Lightweight” performance reviews: Discuss what the employee has accomplished since your last meeting, and view this progress within the context of the company’s priorities and needs.
F: Feedback
In order to improve, employees need to know how they’re doing—often, they don’t have enough distance from their work and performance to make this call themselves.
You can elicit and guide feedback in one-on-one meetings with these questions:
- Employee: Do you have any feedback on how I could improve my performance, make more progress toward my goals, or set more ambitious OKRs?
- Manager: What do you need from me to succeed?
R: Recognition
Recognition should be both private and public and focused on actions. There are many ways to establish a “high-recognition” culture:
- Introduce a peer-to-peer recognition system. For example, you could end Friday meetings with the opportunity for employees to give a shout out to the work of their peers.
- Focus on actions and results. Instead of honoring an Employee of the Month, honor an Achievement of the Month. Celebrate people for what they do, particularly when they complete OKRs that contribute to company goals or they demonstrate company values.
- Link recognition to the company’s goals. When you have a particular, company-wide OKR you’re trying to push, focus recognition on the people who are helping the company make progress toward it.
Together, OKRs and CFRs Build a Positive Culture
In one study, researchers found that “high-motivation cultures” depend on two elements: catalysts and nourishers.
Catalysts are elements of a company that support the work being done. These elements include goal setting, learning from failure, transparency, engaging in meaningful work, and freely sharing ideas. All of these elements are built into the OKR system.
Nourishers are elements of a company that support the interpersonal needs of employees. These elements include positive feedback, professional development, emotional support, psychological safety, and recognition. All of these elements are built into the CFR system.
In other words, OKRs are the catalysts of a positive workplace culture; CFRs are the nourishment that sustains it.
Want to learn the rest of Measure What Matters in 21 minutes?
Unlock the full book summary of Measure What Matters by signing up for Shortform.
Shortform summaries help you learn 10x faster by:
- Being 100% comprehensive: you learn the most important points in the book
- Cutting out the fluff: you don't spend your time wondering what the author's point is.
- Interactive exercises: apply the book's ideas to your own life with our educators' guidance.
Here's a preview of the rest of Shortform's Measure What Matters PDF summary:
PDF Summary Part 1 | Chapters 1-3: Introducing OKRs
...
- Are black-and-white—you either succeed in achieving a key result, or you don’t
- Are relatively challenging. If a key result seems easy, it, or your objective, may not be ambitious enough
Example:
Objective: Hire new employees to meet the needs of the expanding organization.
Key Result #1: Meet with 3 candidates this month for the role of director of finance and hire 1.
Key Result #2: Meet with 5 candidates this quarter for the role of marketing manager and hire 1.
Key Result #3: Meet with 5 candidates this quarter for the role of product manager and hire 1.
Companies that use this system have OKRs at every tier: Top-line OKRs for the entire company, division OKRs, team OKRs, and individual OKRs. Everyone in the company creates OKRs, and everyone’s OKRs are visible to everyone else.
Traditional Management Systems v. OKRs
Your company likely uses a traditional management system with the qualities listed below. Compare it to the OKR approach:
Traditional Management Systems | OKRs |
Key question: What’s the goal? | Key... |
PDF Summary Chapters 4-6: Superpower #1—Focus and Commit
...
At each tier, focus on three to five objectives. Any more than this, and your focus will be too dispersed.
Identify Key Results
After you know your priorities, your objectives, you can start to plan how to achieve them. Key results are the steps that get you there. For each objective, decide on three to five key results—sub-goals that are specific, measurable, and time-bound, and that collectively ensure you’ll attain your objective.
The three sets of key results (KRs) below are all proposed paths toward the objective of winning the Indy 500. What differentiates the strong key results from the weak and so-so key results?
...
Weak KRs | So-So KRs | Strong KRs |
Objective: Win the Indy 500.
| Objective: Win the Indy 500.
|
PDF Summary Chapters 7-9: Superpower #2—Align and Connect
...
Additionally, your goals might be similar to a colleague's, and, consequently, you might have resources, strategies, or information that could help your colleague reach her goals. You can’t know which of your resources could be useful to your peers if you don’t know what they’re working on.
Benefit #3: Transparency Reduces the Risk of Redundant, Overlapping Goals
In large companies, people often work on the same thing, and toward the same goal, without realizing it. Making sure everyone knows everyone else’s goals helps keep employees from performing redundant tasks and, consequently, saves the company time and money.
Top-Down v. Bottom-Up Alignment
Generally, there are two approaches to alignment: top-down and bottom-up. In the top-down approach, directives start with the CEO and cascade down through the ranks to the junior employees. In the bottom-up approach, junior employees working on the frontlines, the people who often have the most access to customers and product issues, identify pressing needs and relay them up the chain of command to the CEO.
There are benefits to both systems, and the most effective companies are aligned in both directions....
What Our Readers Say
This is the best summary of Measure What Matters I've ever read. I learned all the main points in just 20 minutes.
Learn more about our summaries →PDF Summary Chapters 10-11: Superpower #3—Track
...
Option #1: Continue the objective or key result—If everything’s going well and you’re making progress, keep going.
Option #2: Revise the objective or key result—If changes in your environment or workflow have caused the goal to get off track, update it. You may need to alter your process or the goal’s timeline to get it back on track. You also may need to put other goals on the backburner so you have more time and resources to focus on this one.
Option #3: Start a new objective or key result—As conditions change, you may find you need to add new goals. If you already have five objectives, you may need to put one or two on the backburner to make room for the new goal.
Option #4: Stop an objective or key result—Some goals become irrelevant or impractical. Don’t stubbornly cling to a goal just because you set it. If it no longer serves your larger purpose or the company’s, toss it.
The Wrap-Up Phase
The wrap-up phase usually happens at the end of the OKR cycle. During this phase, you analyze your methods, evaluate your progress, and reflect on your successes and failures. The wrap-up phase consists of three parts: objective scoring, subjective...
PDF Summary Chapters 12-14: Superpower #4—Stretch
...
- Do we want to further establish our current position in the market? (If yes, favor committed goals.)
- Do we have some extra cash to play around with? Can we afford to make a risky bet? (If yes, favor stretch goals.)
- Are we in survival mode, just trying to stay afloat? (If yes, favor committed goals.)
- What does our business need from us, right at this moment?
Regardless of your answers, every company should have at least one or two aspirational objectives. If your company doesn’t stretch, it won’t be able to compete in the market.
Researcher Edwin Locke has found that, generally, the more challenging a goal is to achieve, the higher people perform trying to reach it. In Locke’s study, even though subjects with challenging goals failed more often than subjects with easy goals, the subjects with the hard goals performed at a higher level and achieved more overall. This shows that stretch goals are valuable regardless of whether or not people achieve them, because they inspire employees to work harder.
Tips for Creating Stretch Goals
What not to do:
- Don’t impose stretch goals on your employees without being aware of the realities of their...
PDF Summary Part 2 | Chapters 15-16: CFRs—Conversations, Feedback, and Recognition
...
- C: Conversations between employees and managers
- F: Feedback both from and to managers and among peers
- R: Recognition from peers and managers for small and large contributions toward goals
OKRs and CFRs reinforce one another. You need both the hard data of OKRs and the interpersonal relationships fostered by CFRs for your company to thrive.
C: Conversations
Conversations should happen throughout the year, in both formal and informal environments. The wrap-up stage at the end of the OKR cycle is also a good time for these conversations. At a minimum, managers and employees should meet once a month. A Gallup poll found that frequent one-on-one meetings with managers increase employees’ engagement levels by a factor of three.
As a manager, your conversations with employees cover 5 main topic areas (but you don’t need to cover all of them in one conversation):
- Reflecting on past goals and setting new ones: Discuss the employee’s OKRs for the next cycle and decide together how to align them with the priorities of the team, the department, and the organization as a whole.
- Updates on progress: Discuss data on the employee’s...
PDF Summary Chapter 17: The Side Benefits of the OKR/CFR System
...
One major benefit of the OKR system is that it forces everyone, at every level of the company, to work smarter:
1) It forces everyone to align their goals with the company’s goals, and to understand exactly how their specific goals and activities contribute to the company’s success. In other words, it forces every employee to think like a manager.
2) It forces people to be specific about their priorities—you can only choose three to five goals, and you need to know exactly how you’ll achieve them and how you’ll measure their success. Again, employees learn to think like managers. Then, as a manager, she already knows how to make quality decisions and lead others to do the same.
3) It forces all employees to take ownership of their ideas and goals and to have a voice. In some organizations, only the loudest members are heard. In OKR organizations, everyone’s voice is heard because everyone’s goals are transparent. Everyone has to take on the essential leadership skills of setting goals, making them public, soliciting feedback, and defending their priorities.
Startups that don’t groom their members to become executives miss a valuable opportunity. They either...
PDF Summary Chapters 18-21: How to Build a Positive Culture
...
Lumeris is a tech firm that provides expertise, services, and software to health care providers and patients. When Andrew Cole, then head of HR, arrived at Lumeris, the company had already been using OKRs for a few quarters. But Cole quickly realized that their use was superficial—at the end of the quarter, people would just adjust the numbers on the OKR platform and say they’d met their goals. There was no accountability or buy-in. Many people didn’t even know their OKRs.
But the problem went beyond the way Lumeris used OKRs. The failed OKR system was the result of a negative workplace culture, which Cole needed to address before OKRs could be effective.
Problem #1: Executives had introduced OKRs in an attempt to merge the conflicting cultures of Lumeris (a risk-taking and transparent company) and their partner, health insurance company Essence (risk-averse and protective of their proprietary methods). As long as these two organizations remained separate entities, with two separate cultures, the OKR system couldn’t function successfully.
- Solution: Lumeris incorporated Essence under its own umbrella.
Problem #2: Lumeris’s stated values included passion,...
Why are Shortform Summaries the Best?
We're the most efficient way to learn the most useful ideas from a book.
Cuts Out the Fluff
Ever feel a book rambles on, giving anecdotes that aren't useful? Often get frustrated by an author who doesn't get to the point?
We cut out the fluff, keeping only the most useful examples and ideas. We also re-organize books for clarity, putting the most important principles first, so you can learn faster.
Always Comprehensive
Other summaries give you just a highlight of some of the ideas in a book. We find these too vague to be satisfying.
At Shortform, we want to cover every point worth knowing in the book. Learn nuances, key examples, and critical details on how to apply the ideas.
3 Different Levels of Detail
You want different levels of detail at different times. That's why every book is summarized in three lengths:
1) Paragraph to get the gist
PDF Summary Appendix: Checklist for Developing a Successful OKR System
...
- Don’t base performance reviews or salaries on whether or not employees meet their OKRs. The OKR system is meant to help everyone in the company be more focused and productive; no one should use it as a way to punish employees who aim high and fail.
- Realize that hitting on an effective OKR system takes time, so be patient with yourself, your colleagues, and your administration.