The Second Order of OKRs Questions, Part 1

What you will learn in this episode

• (0:00) Intro
• (1:48) Ben’s background
• (6:40) Interest in OKRs
• (9:20) OKRs.com
• (10:40) OKR trends
• (15:30) Four-month OKR cycles
• (21:04) Lessons from OKRs at Sears
• (26:00) The WHY of OKRs
• (34:30) Reflect and reset
• (38:00) Outro

Relevant links

• Measure What Matters by John Doerr
• Radical Focus by Christina Wodtke
• Objectives and Key Results: Driving Focus, Alignment, and Engagement with OKRs by Paul Niven & Ben Lamorte
• The OKRs Field Book: A Step-by-Step Guide for Objectives and Key Results Coaches by Ben Lamorte
• The ROI of OKRs: Sears Study Quantifies the Impact of OKRs
• Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink

The full transcript

Ben Lamorte (00:03): That, what I just described is only a subset. I was working with this one company in Saudi Arabia. Believe it or not, that had sent me a proposal for why they want to do OKRs. I said, you know, give me all the information. They wrote me this thing. And it was like 15 bullet points for why they want to do OTRs. And so I only gave you like eight, so imagine seven more. And I had to say, I had to say this in a way that was nice. Cause I didn't want to be too mean, but I had to say, listen, you can't have that many reasons because when you give them that many reasons, you're not giving me any reasons.

Ben Lamorte (00:34): Hi, and welcome to Dreams with Deadlines, a podcast where you'll hear real stories of trials and victories in business. I'm Jenny Herald, VP of product marketing at Gtmhub. Our mission is to prevent organizational hypocrisy inspired by the proven Objectives and Key Results goal setting methodology, Gtmhub offers the most flexible Results Management System for mission driven organizations. Check us out at gtmhub.com to learn more.

Ben Lamorte (01:05): Why are we adopting OKRs? Should we do individual OKRs? Does a quarterly OKR cycle make sense or should we break from convention? If you're thinking about adopting OKRs for the first time tweaking your existing OKR program or coaching others on the art of OKRs, this episode is for you in this two-part series, we talk with Ben Lamorte, an OKRs coach, author, and founder of OKRs.com. He's got more OKRs coaching experience than anyone on the planet. We cover answers to these questions, discuss his new book, The OKRs Field Book, and more let's jump in Ben. Like I said, before we even hit record, I am so excited to talk to you about OKR. So thanks so much for being on dreams with deadlines. Of course, it's my pleasure to be here. So we're going to go ahead and just roll right into this. You own OKRs.com and you founded your company 2014 and on your website, it says under about me, you have more OKR as coaching experience than anyone on the planet. How did you end up doing this?

Ben Lamorte (02:13): Well, it's a great story, actually. And I'm going to give you a little bit of the details because every time somebody asks me, I usually give them the two-minute version. But since it's a podcast I'm gonna fill you in. And this is, this is very much based on a true story, okay? But this is my memory of it, but you know how memory works? So look, I was doing engineering and graduate school and I went into psychology and I kept asking these people who I would notice like a professor at Stanford, this guy, Dennis Matthews, who was a mentor of mine. He taught people how to learn, right? How cool is that? He ended up going onto Microsoft and he taught people how to learn at Microsoft. And just to put this in perspective, his joke was when he was at Stanford teaching, he was like, Hey, you know, if I was teaching tennis, it would be like, I'm teaching kids like how to hit a ball with a forehand.

Ben Lamorte (02:54): And when I go to Microsoft, I'm working with like, you know, Ivan Lendl or you know, one of the great tennis players, you know, these are the people that are really smart. And so it put us a Stanford students in our place as well. We don't really know anything. And of course we were at Stanford, we thought we did. But when you go into the work world, you do realize that especially these executives who are places like Microsoft, they just are so good at asking questions. They can quickly figure out what they need to figure out and have a very crisp communication. So I said, I want to be like you and Dennis said, this was the professor. He said, you know, I was like, well, what class do I take? You know, what major do I do? I mean, how do I become like, you know, do I have to do a certain thesis or an internship, you know? And he said, listen, Ben, you know, you have to find your path. You'll, you'll go through a journey. And eventually you'll figure out where you can be, but there is no, you know, box that you checked in order to become like me, or, you know, you have to become like you. And it was a very much of a Yoda like answer. So what, you know, as a, as a graduate student, this is not the answer I wanted. I wanted to know like, you know, wait.

Ben Lamorte (03:49): Yeah, exactly. We've all been in our twenties and we've all felt like that. So I was there. I was just perfectly developmentally appropriate. It was a really tough time. A quarter-life crisis ended up getting a job in management consulting. But because I have, as an engineer, they put me in front of a spreadsheet. They said, Hey, Ben, here's your spreadsheet. Go to it. And I was really more of a people person, but it didn't really matter. I was pretty good at spreadsheets. I actually learned spreadsheets okay. On the job. And I will say, if you're listening to this podcast and you're in your twenties learned spreadsheets, it's like, isn't that true?

Ben Lamorte (04:20): It's like, this is the, that was mine. First thing, same. I was, oh my gosh. Control V if you're, if you want to even get crazy with it, do some Visual Basic.

Ben Lamorte (04:33): Yeah. I mean, this is like, we can really differentiate yourself. So I did that. I was, and I was thinking everything was going pretty well. I will tell you psychologically something interesting happened. A management consulting went into a.com, built out financial models for planetx.com where we basically sold drugs online. Okay. These were prescription medications, but we raised $400 million. Four years later gone. Right. This was a classic.com failure. So that's a whole nother podcast, right? So then my arms started to go weak. Imagine this I'm using the IBM ThinkPad, if those of you that can remember the ThinkPad had the little red dot in the middle, you can't blame me. I was working 15 hours a week or a day, basically on this darn ThinkPad. And finally my arms just went out. I couldn't basically, I couldn't really move my hand. And the warning signs were, Hey, it sort of hurts.

Ben Lamorte (05:17): It's kind of numb and just keep working. Hey, if that happens, stop, you know, ergonomics all the way. Right? I give you my speech. So for a couple years I started doing yoga. I was trying to figure how to get my arms back. And eventually I did. And I'll tell you, I went to graduate school in psychology. Okay. This is how sort of bizarre my career is because my father-in-law was the head of the psychiatry department at UCSF. And he was a mentor of mine. My own father, also a psychologist recently passed away, but also a psychologist. So I wanted to follow his footsteps, but midway through, I realized, wait a minute, I scratched my head. And I said, you know, you don't make any money as a psychologist. And I'm just going into more debt now, graduate school. Right? So that's when I decided I got to get a job again, you know it.

Ben Lamorte (05:54): And I ended up doing financial modeling with software. I got into the software space, ultimately at what I was doing was building financial models based on the drivers and metrics throughout the organization. But notice what I said, financial models, everything was about the money. You know, how much revenue do you get for this? How much does that cost? Right. I started, I got a really cool job at a place called Adaptive Planning, where they basically said, you're in charge of the center for customer excellence. This job was one of those jobs where I was finally arriving. You know, this was a job where I was, I was basically a salesperson without a quota. So I could be lazy and just talk, which is what I'd love to do and go around and make presentations. And it was a lot of fun and they were finally paying me what I was worth, right.

Ben Lamorte (06:36): That type of thing. But three months later, I quit that job because OKR is where my passion, what I didn't tell you was right before I spent about three months working on a project well, it was actually four months, I was supposed to be a few weeks working on a KPI project. And the way that they framed it was, Hey, Ben, we need your help with these KPIs, by the way, we've already brainstormed all the KPIs. We just need you to tell us what the numbers should be. You know, what the target should be. And I'm sitting here and look, I'm not an expert on your business industry. I can't tell you what your goals should be. But I went in and I I'll never forget this because my, my, a strategy document arrived like a couple of weeks before I got on the plane to meet with the CEO.

Ben Lamorte (07:14): And it was one of those 20 page documents that had like all these different statements about the strategy. And, you know, we gotta go international, we gotta do this. And I translated it into an OKRs document Objectives and Key Results. Right. And when I presented it to them, they looked at it and they said, Hey, this is exactly what we want to do across every department, every business unit in our organization. So I started interviewing people and doing OKRs. And that was about 2013. That was my first true OKRs paid engagement. Now back then, most people didn't know what OKRs was. Right. This was like before the, the Google video came out in 2014, I think it was right. And so, but what happened was for the first time I had that moment, where am I, Dennis? You know, because the work I was doing, it was like, so yeah, it was like, I was like, oh my God, I'm in my element.

Ben Lamorte (07:57): It combined engineering, it combined psychology. It combined, everything I wanted to do. And this was the first time I felt like I was really moving the needle at work, as opposed to just doing the job. Right. Remember I said, I started out, put you in front of a computer, do your spreadsheets, let's take a step back. What is your mission? What are you trying to achieve? Why is that? Why is that important right now? You know, and how will we know you've achieved that objective and all those basic questions that you ask when you're doing OKRs, I found to be really, always valuable across all these 40 or so conversations. And I, I would say at that point, I never looked back. I just said, I got to do it now, the inside story though, I didn't just gotta, I just gotta share this with you really quickly.

Ben Lamorte (08:32): And I'm working with this one client and they have about a hundred employees. Okay. So, Hey, you know, you're in the software space, you know what, I'm talking about a hundred employees, you're selling software. You know, you're just not going to make that much money selling software to a company with a hundred employees. But yet I spent two days onsite. Okay. Doing OKRs training. And I only trained half the team and I needed to train the other half. So it was going to be closer to four days of onsite training to get them going. And I'll never forget when I, when the CEO said, how's it going with that client? And I said, oh, it's, you know, it's going really well. We're up, we we've trained half the companies as well. Okay. So where have you been? I said, well, I've been to their office.

Ben Lamorte (09:05): I'm on day. I finished day two. And he said, you gotta be kidding me then, you know, we're a software company, you know, do you know anything about software? I mean, our multiples based on, you know, we sell software, we don't do services. And at that point, the writing was on the wall. I need to do OKRs.com. I wanted to be an OKRs as coach to really help organizations with their OKRs, as opposed to just like roll software out, you know? And then, because I was told the training should be like two hours and anybody who's listening to this podcast that knows about OKRs there's this absolute imperative need to have an OKR dialogue. This is called OKRs coaching. That alone might take two hours just to draft is for like one or two teams. And there might be 25 teams. I mean, you really need that outside help. And so that's what I do. And I've been doing that ever since

Ben Lamorte (09:53): You've helped over a hundred organizations now deploy OKRs ranging from some, I'm just going to list off names. These are on your website, E-bay Adobe, Capital One, Zalando, which is really close to me. I can throw a stone and hit the building–I'm based in Berlin–CareerBuilder, and GoNoodle. So I, I think it's safe to say that OKRs work in big companies. The question is how, and that's what I want to spend some time talking about. So you're writing your new book. I think some of this might intertwine with that. Like, so maybe if you don't mind, we will launch into some of this subject matter because I think it's helpful. So maybe we go with, and I think this is in your book too, so I'm excited to talk about it—trends of OKRs. We can just talk about the general trends that you're seeing. What are you seeing out there, and then we'll launch into adoption and deployment.

Ben Lamorte (10:46): And I'm really glad that you asked that. Look. I mean, let me be clear that this book that I'm working on is trying to dive into the second order of OKRs questions. Because as you know, we have these books like Measure What Matters, you have the book I wrote with my buddy, Paul, and these books are, and also Radical Focus. Those are really the big three must read or must have on your bookshelf if you're an OKRs coach. Right. And what I'll tell you is they all pretty much accomplish the same thing. They get you excited about OKRs, as they tell you why you should do it. They tell you some examples of OKRs, they give you lists of companies that are doing OKRs. And really, they would say, after you read the book, you want to do it. Most people, especially if you read Measure What Matters you come out of here saying, well, I got to read, Measure What Matters I gotta do OKRs. I gotta, I gotta spread the word.

Ben Lamorte (11:25): The thing is like you, you pointed out how do OKRs work in bigger companies, you know, can, OKRs work in bigger companies. When do you need a software tool? Do you need a software tool? You know, how do you best roll out OKRs? Do you do it all at once? Do you do individual level OKRs? There's like all these questions that you have. I try to answer that in my next book. And what I'll tell you is since 2016, when I did a book with Paul called Objectives and Key Results, which I thought was a great title, we realized nobody takes, took the title objectives and key results. Oh, we'll just use that.

Ben Lamorte (11:56): It was the first one I read. Honestly, I read that actually before Measure What Matters. I was like, I need to actually know what this is. This guy knows what he's talking about.

Ben Lamorte (12:02): So that was isn't that, isn't that funny? Yeah. It's, it's, I'm glad that you read that one and, you know, look, it was more of a textbook style book, you know, we wanted to get it out there. So when you think about the trends since 2016, like some of the things that we've noticed, and this is really interesting to me personally, because when I first started with OKRs the number of objectives we use this idea of five plus or minus two, right? This was like, you know, three to seven, I mean, five plus or minus two is kind of the nerdy way of saying somewhere between three and seven. But you know, we're into metrics where like, you know, that's really cool, we'll say five plus or minus two. Right? So what that means is you could have seven objectives. So a given team might actually have seven objectives. Now, imagine each of those having three or four key results, you're talking, you know, 20, 25, even 30 key results in some cases for a team to track. And you know, that's a lot. Right? And I, I look back at that and I say, wow, I think part of it is, and this might sound kind of negative. But I think if you go back to like the 1980s, if you can go 1990s, I think we had bigger attention spans to be honest right before the iPhone. So I'm

Ben Lamorte (13:04): I don't look like it. I'm a child of the eighties. I'm like, how come I can sit and listen to a concerto for four hours? And that kid fell asleep over there. Right? Right.

Ben Lamorte (13:13): I mean, I was watching, I was watching the movie Singing in the Rain and watching the movie Singing in the Rain is almost like, you're feeling like you're reading a book. Right? What could they just edit this? What do they go to? The next thing? Our brains are different. So, so today's modern brain. And in a way, this is good. I want to sort of say, actually there is a silver lining, which is now what I'm seeing is maybe one or two objectives per team is the typical. And you know, when Christina wrote radical focus saying, you could only have one objective was a radical concept. How can you only have one objective? What are you kidding me? You have, what about the other things you want? Yeah. Yeah. You can't do that

Ben Lamorte (13:50): One. It's like eating Lay's potato chips. You can't pick just one.

Ben Lamorte (13:53): Right. What I would say is that, you know, at the time I thought that was almost insane. Now I'm starting to think, look, the default that I'm seeing is two objectives per team. And really what it comes down to is a balance between one external objective facing outside and one internal into the company. So it might be, Hey, we want to delight the customers with better, you know, call center service or something. And that's going to be an impact outside of the team. But then we might have another one, which is we want to automate our own processes so that we don't waste as much time on this stupid stuff with this, you know, Oracle process or something, which is based on a true story. So you might have a balance of an internal thing, which really your customers don't even know about. They don't care about and something that's more external facing your customers.

Ben Lamorte (14:32): Or you might have an objective where it's like all about this, which is like longer-term thinking, and then shorter term thinking, or is there some kind of a yin and yang balance between two objectives? And I talked to Christina about this quite a bit and she agreed, Hey, look, if you can get it down to two objectives where one is like that, and one is like that, and they're sort of, you know, diametrically, you know, sort of synergistic in some way or there that's probably fine. We can still consider that radical focus. So I think the trend is you're going to see most organizations adopting that one, two, really at very most three objectives. So it's now it's becoming two plus or minus one. So five plus or minus two has transformed into two plus or minus one over the last four or five years.

Ben Lamorte (15:10): And to me that's pretty wild. And then the a, I won't go through all the trends, but I'll give you one more, which is actually, I'll give you two more because these two are really important. Okay. The second trend is the quarterly default. And to those of you that read Measure what Matters. And even before that, there was this mindset of like, oh, I know, okay, ours are quarterly. That's just because that's the way they are. And if you look closely at that, you'll find that that doesn't really make sense in some cases. So what we're finding is a movement toward four months cycles and I'm seeing that. Yeah. So, well, so look at it this way. There's a couple of really big arguments for this number one, the quarterly crunch. So if you look at a quarter, yes, I know people like organize themselves on quarters, but if you talk to salespeople at the end of the quarter, they just take it away.

Ben Lamorte (15:58): Yea because I got to get my quota, just, I need to close my deals. I got follow up all of this stuff, leave me alone.

Ben Lamorte (16:04): Right. Exactly. And then if you talk to like the finance people at the beginning of the quarter, same thing. So, you know, adding on another process that just plays off the quarter, you know, it sounds good at first, but when you really operationalize it, yeah. There's some pushback here and there. The second thing I found is that if you look at the incremental value from going, like, if you look at an annual goal setting model, the incremental value of going to a six month model is quite large. If you go from a six month model to a four-month model, so you have three goal-setting periods, if you will, in a year, the increment of value is also quite large. Now what happens is when you start to go from three cycles in a year to four cycles in a year, you're starting to get into this gray area of, do we really need to do four, you know, how much value does that add?

Ben Lamorte (16:46): Is that just more overhead? Because it's just not really there. So that the case for going to four isn't very strong. And then finally there was an unanticipated advantage. Now get this. So one of my clients had a real challenge separating OKRs from performance reviews and they happened to have a quarterly performance review process, which by the way, I love, I love quarterly performance review process, way better than annual. Like I think we should all agree that everybody's moving. Yeah. I mean, it's the way to go, but what they did, but by offsetting the OKR cycle from the performance review schedule, just simply having it be that it's four months instead of three months. So then it's a different meeting people in their mindset. Oh, okay. Wait. So OKRs, must be different than performance reviews because they're like a different meeting, you know? So we don't just do a performance review and then said, OKRs are every quarter.

Ben Lamorte (17:36): So by having an offset cycle, they had this sort of like, ah, okay, these are different. They're sort of related, but they're, they're a different conversation. And that really was that an unexpected benefit. And then the other one was they had seven 1:1 touch points that were required between manager and direct report formally. And they found that that was great. They didn't necessarily want to require much more than that, but once they had seven, it was better than four, you know, required touch points and it kind of kept that engagement. So, you know, there's, there's a lot of interesting reasons to move to four months. Does it mean everybody should do it? No, but I, I call a lot of my clients who have moved from quarterly to four months. They're just like, oh yeah, we're never going back.

Ben Lamorte (18:13): That's awesome. I think that's so helpful to think about because everyone's like, oh yeah, you do quarterly ones to the annual ones. And maybe you have a three-year strategy. That's kind of super high level. And that's just how things are.

Ben Lamorte (18:24): But yeah. And that is that what I call the January effect. So, so many of my clients will just have this problem and it'll be around the middle of February because there'll be announcing their OKRs for Q1. And there's always some wise guy in the back, that's kind of raising their hand and saying, excuse me, why are you telling me these are the Q1 OKRs, in two weeks we're supposed to develop the Q2. We're supposed to start drafting those in a couple of weeks. So, you know, why are you telling me this? And it's like, as much as I hate to admit it, you know, cause I'm a teacher myself, in some ways, that's kind of the annoying kid in the back. That's excuse me, you know, with that little tone, but you're like, you know what, you're right. I hate to say this you're right.

Ben Lamorte (19:04): So if you do a cycle that goes, that ends the month of January. So it kicks off February 1st, all of a sudden you address that problem. And people feel like rather than feeling like stressed out about, oh my God, we're behind. And oh my God, we got to get these things in. You know, you shouldn't really have to feel like you have to rush your OKR. So we just gotta get this thing over with and we gotta hit our deadline. You want to be thoughtful. And so having those three cycles seems to give people a little bit more breathing room, especially with holidays. You see that in June and July too. Okay. So that's a big one. And then the final trend I wanted to cover was the movement to defer the individual level OKR. So when I first started, I would say probably about, I don't know, a third of the time somebody approached me, let's say in 2015, they would say, Hey, you know, we want to get, OKRs going.

Ben Lamorte (19:49): I want to roll them out all over the place. You don't get everybody doing OKRs, individual level as well. And I think that was because that's an artifact of the Google video because a lot of people watch the Google Ventures workshop. It was like, Hey, OKRs are a company, team and individual very simple, fine print. This is how Google does it. Fine print Google started with, yeah, you're not Google. They started when they had like 35 people developing OKRs. And they're all really smart. And they're like, well, we'll just do individual OKRs. And somehow that state that's stood the test of time. Now, when you talk to our friends at Google, you know, not even one of them would recommend that a big company back to this is going to get to our big company model. If you're a big company with like 10,000 people, you don't start by rolling out OKRs to 10,000 people. You start by rolling OKRs at a higher level, typically a company or a business unit. You work with teams, you figure out even what a team is. And then maybe a year later we're starting to look at individual level OKRs, but we're not trying to just, yeah, maybe even then it's and by the way, fine print, I don't like requiring individual level of OKRs I don't mind making it optional, but there are always cases where individuals, certain individuals do not benefit by creating individual level OKRs in every organization I've seen. So if you require it, just think about it logically, right? If you're requiring that, you're basically saying, yeah, well there's some people that are not going to benefit from this, but we'll make them do it anyway. Okay. Case in point when I was working with Sears, which was a massive role out, this was in a sense, Sears was the first big company to roll out OKRs because the CEO saw the Google video and just decided, wow, we got to do that.

Ben Lamorte (21:14): Plus this guy was the CEO of Sears and he was desperate. I mean, I'll be honest with you. I talked to their HR team and they were like, look, we need to mix it up. We need to do something. That's cool that like the tech companies do or something, because we just got to mix things up, you know, we got to create more engagement at work. I mean, we're going, we all know we're going out of business at the time. Seriously. So they rolled out OKRs, but it was like, let's do it as quickly as possible. And I remember I talked to this guy, Dean, who at the time was the Head of People Operations. And we were at about 70% adoption of the, of the workforce. So 20,000 at a 30,000 people, or so had adopted OKRs. And he said, should we try to increase that?

Ben Lamorte (21:50): Because we got from like 40%, they used to have an OKR themselves to get, you know, from 40% to 60%. And I said, you know, Dean, if it's been 70%, the last couple of quarters, and it's starting to stabilize, that's probably where it needs to be. It's more of a health metric because the feedback is, you know, if you're, if you're in Sears and your job is to like, change the tires on these cars, when the cars come in, you know, and that's what you do, do you really need to write OKRs? Or do you just need to change the tires when the cars come in? You know, it doesn't, you know, maybe if you're the manager of the tire center, you might have some productive productivity metrics that you want to push and focus, but at some point, no, you know, you don't need to do OKRs.

Ben Lamorte (22:26): And so we don't want to force them to do it. And that was really an aha moment for us because we said, oh, okay. So this is not a compliance exercise, because HR is often used to doing that. Right. You know, you must do this by this date, you know, get it done. So that's not really what we want to see with OKRs. So anyway, long story short individual level OKRs is not as much of a focus now, as it was in the past. And even my buddies over at Google have come out, you can see their tweets where they're saying things like, actually we do not recommend individual level OKRs when starting. And we're not even sure we recommend individual level OKRs at all. Yeah. I mean, so just take that with a grain of salt. So that's the those are all to me good developments for what we're seeing with OKRs organizations adopting OKRs.

Ben Lamorte (23:06): Yeah. I think that makes sense. Like I was, I, all of us have probably read Drive, you know, the Daniel Pink book about motivation. And he, he taught...I think you're describing is what he is talking about with heuristic tasks. You know, I'd like the different tasks or algorithmic tasks where algorithmic tasks, I'm a grocery checkout clerk. It's a very clear, defined thing of what I need to go do. What OKRs, would I necessarily need in order to make my job better or more efficient.

Ben Lamorte (23:39): Right. And, and, you know, to some extent you can't control how many people come through the line, you can't say, Hey, I'm going to try to do a 100 checkouts today. There's nobody in line, you know? Yeah, exactly.

Ben Lamorte (23:48): And so like, what are you going to do? You're going to get that person to go outside and start promoting for the business.

Ben Lamorte (23:54): One, a similar one that I see as the call center, I had an early stage client where they had like 500 employees, right. But 200 people were literally in the call center and, you know, the inbound call center, the calls are coming in. Well, they already have a real-time dashboard. You know, every single employee has a little thing on their screen. It's telling them all the metrics they could ever possibly want, by the way, they paid a lot of money for that system. So the last thing that person needs now is somebody to tell them, oh, by the way, don't forget to set your OKRs it's like, I have a system leave me alone. I don't want, you know, I'm not trying to improve on anything. I'm trying to do my job, you know, just get away. So a lot of people have those kinds of business as usual jobs that are at steady state.

Ben Lamorte (24:31): You're not going to benefit from OKRs. And in fact, even taking that a step further, some organizations do not benefit from OKRs because they're at that steady state. You know, if you're a winery, this is a true story. Actually, a buddy of mine was in the winery business. He said, Hey, I got introduced to this winery. Cause we were talking about, OKRs, you know, over a glass of wine, he said, you got to come up here. These guys would love OKRs. I go up there and there are about a $10 million a year winery, family winery. And after about an hour, we realized all we want to do is just keep this thing at about $10 million a year. We want to continue to put the bottles in the cellar and we get our reserves. And you know, there's not really some big problem we're trying to solve.

Ben Lamorte (25:06): Oh, well we don't need, okay, ours. We just want to maintain our business. End of story. Let's go get a drink. You know, we opened up a glass of wine and we just celebrated the fact that we didn't do OKRs. So I wanna, I want to be careful because I'm an OKRs coach. Don't get me wrong. I love OKRs. I think it's the greatest thing ever. You know, we can totally use this approach to be better at work and do critical thinking and all that, but it doesn't mean everybody should adopt OKR, whether you're an individual in some organizations you might benefit from OKRs at a higher level, but not at your level. And then even, even some organizations may actually be better off not even trying to do OKRs in the first place. So that's, that's sort of a little bit of a caveat of the, of the miracle. Cause you know, John Doerr wrote this book and he says, Hey, this is a superpower, you know? And I, I'm not sure I'm ready to go quite that far. I see what he's trying to say, but I'm not quite sure that I'm ready to go quite that

Ben Lamorte (25:53): Far. Fair enough. Fair enough. I think those are all really good points. So we've kind of talked kind of broad strokes on some of the trends. Another thing I think you mentioned that you'll have in your book is OKR deployment parameters. Cause you want to make this again, like second order effects, right? Can we kind of deep dive into some of that stuff? So we've talked about, you know, cycle time, you know, what level of the organization do you deploy this to? The one that I want to talk through is know what you're doing with OKRs in the first place, which is kind of hearkening back or a good dovetail from we're fine with being a 10 million a year winery, right? What are you seeing in terms of why you're doing this to begin with? Cause I think you have some good stories to tell, given just the broad industries that been able to touch on an amount of companies you've been able to work with. What's the why, what do you see?

Ben Lamorte (26:47): This is a really, really important question. In fact, it's good that we're talking about this because really this is the number one question for those of you that play Family Feud. You know, if you could go back that far, you know, well, what's the thing we need to know about OKRs if somebody says, well, why are we doing okay? Or is it like ding, ding, ding, that's your number one answer. Come on down, you win. And so, and by the way, if you are an OKRs coach and you're listening to this, just remember, this is the first question you have to ask. And I often I'm often guilty of not doing that. So I just, I, it's not an easy thing to do, but it's a discipline. And we have to always ask ourselves that question and we have to ask the CEO or the senior, most person, we have to ask other people to, to validate that.

Ben Lamorte (27:25): And we have to make sure that we have one answer to this question, at least at the top level, at the executive level, in an organization. Now let me tell you the wrong answer. The wrong answer is we're going to do OKRs. Well, why is that? Oh, because Google does it. This is of course a very dangerous answer. You know, this is not good enough. Now it's interesting as a sort of a side note, Huawei is doing OKRs in China and I can't help, but talk about China. In fact, I'm going to be on a big podcast and chat with the Chinese audience in November. That's coming up and OKRs are really taking off in China. Why? Because Huawei is doing OKRs. And my buddy Kwong Yang who wrote the book about how Huawei does OKRs is starting to get very popular because in the Chinese culture, Huawei is a lot like Google.

Ben Lamorte (28:08): So, you know, a lot of the executives are like saying, Hey, we should do OKRs. Well Huawei does. If you are in China and you're listening to this podcast, that's not a good answer. Okay. Although I know that there's also some cultural things, which is like, well actually when Huawei does it, we should do it. It almost is a good answer, but still I'm going to try to argue. It's not, you need to really think for yourself, why are we doing OKRs for our organization and why now? And so the other bad answer is, oh, we're going to do OKR is because we want to create autonomy. We want accountability. We want performance. We want evaluation of employees. We want discipline. And we want focus, transparency and alignment. It's like, what is what? So that's, that's the answer where you just spouted off like 25 different things.

Ben Lamorte (28:48): And I kid you, not that, what I just described is only a subset. I was working with this one company in Saudi Arabia. Believe it or not, that had sent me a proposal for why they want to do OKRs I said, you know, give me all the information. They wrote me this thing. And it was like 15 bullet points for why they want to do OKRs. Wow. And so I only gave you like eight. So we imagine seven more. And I had to say, I had to say this in a way that was nice because I didn't want to be too mean, but I had to say, listen, you can't have that many reasons because when you give them you that many reasons, you're not giving me any reasons. So we eventually tried to come down with one. So I've been in the, the, the good answers, which are very focused answers come in two flavors, right?

Ben Lamorte (29:25): Either they're accountability and evaluation oriented. You know, we want to shine a spotlight on performance. That's one approach. And then the other seems to be focused, you know, or alignment, focus and alignment tend to be hand in hand because what are we really saying? We're saying, well, I want focus on this. I want to be aligned on what we're focused on. It's pretty much the same thing. So I see focus and alignment as probably the best sort of set of reasons for why we want to do OKRs. The thing is, I'll tell you the one thing that I always come back to is the best answer for me when I'm working with a client. If we can get this to be their answer, I want it to come from them. But I secretly kind of want to do my Jedi mind tricks to have them tell me, okay, this is why I really want to do it.

Ben Lamorte (30:08): I want them to say, we want to do it to improve communication. So we have a common goal language, and we want to drive learning because what happens with OKRs, is at the end of a cycle, you almost always do something wrong. You know, there's something that went wrong. In fact, I was just on with Walmart. One of the key results we realized was totally wrong. It wasn't the right key result. It was like, it seemed like it was right at the time. And at the end of the quarter, we said, actually, no, it's this thing, CPO, whatever that was, I still don't know exactly, but that really was important for them to track that because it was a little bit more impactful and it was a little bit more controllable. So it was not only did it really move the needle in the right direction to achieve the objective, but the engineers felt, Hey, we can drive.

Ben Lamorte (30:46): We can drive that more. So we walked out of there saying, yeah, I don't know, Q3, wasn't that good? But you know, Q4 is going to be great if we focus on that and we're applying that learning into the next cycle. So that's the big win to me with OKRs it's that adjustment from quarter to quarter or every cycle to cycle that you get. And then it's the way that we talk within our team, but also outside our team about goals, using a common language of here's, what we really think we can achieve. Here's why it's important. Here's how we're going to make measurable progress. Here's where we need your help. So that, that common language allows us to talk and ultimately execute. And that's the discipline we want. So if you're a leader in a big company, like I was mentioning Walmart, if you have 40 or 50 squads, right.

Ben Lamorte (31:26): Which is about what they're going to have. And in this group I'm working with, if you're the leader of that, you, you don't want to have 40 or 50 totally different conversations about, well, what's coming on your goals or what's your roadmap or what's your to-do list or what's your sprint or what's your this. No start with OKRs. Then we can, we can have a detailed conversation about activities or plans or whatever, but first tell me what's the objective. Remind me why it's important. Here are the key results. How are we doing on that? Are we on track? Okay, 10, 15 minutes of that. Now I can talk to you. That's really the big win that I see with OKRs that's universal, right? This is almost a mindset or a cultural shift on how we talk to each other and that can help us with focus, alignment, engagement, and all those things. Anyway, that's the why OKRs, you know, in a nutshell, but it's really important that anybody that's doing OKR is really checks with themselves as to why we're doing OKRs and really that should really be resonating with you.

Ben Lamorte (32:17): Hm. Something I I've always been curious. Cause I get asked this question. So I'm curious from your expert opinion, things are going to change. The market is super dynamic. We saw with Corona, everyone uses that example. And that's why OKR seemed to be like really amping up. I think it's like, oh my gosh, we ha we have to reset. How do we do that in a really quick, but also very clear and somewhat organized fashion so that we can reset strategy and communicate that to the rest of the organization and track against that for that accountability. And hopefully hyper-focus what if priorities change mid cadence or mid cycle or whatever, what should organizations be doing? Because you have two camps. The first camp is you change nothing. You keep going. And then at the end you say, Hmm. Yeah. So that wasn't it. And then the other camp is you change it and the, or you re baseline it or you do something. What, what would you say to organizations, especially at scale that are trying to do this and things just change. We know it and they've got to respond. What should they be doing?

Ben Lamorte (33:27): Yeah. It's a great question. I I've, I'm also, I see both perspectives here. I, I don't want to say like, you know, one is absolutely right and one is absolutely wrong, but I will say that OKRs, it's all about flexibility. So you, you know, this is not budgeting, right? This isn't like, well, that's what you said you were going to do. Now. You can't change it. We'll build variance reports and we'll compare you to what you said versus actuals and all that. This is not budgeting. And so what that means is anybody that tells you, you can never change anything. You know, it's in the middle of the cycle. That's how it goes. You're probably wrong. And I'll tell you a personal experience when you get a certain key result that, you know, you can't achieve because something happened and it's just sitting there and you're looking at it and it's just pissing you off.

Ben Lamorte (34:04): You got to strike that. Yeah, you got to cross it out. And so what I do is I use strike through font. If you have that functionality, you can just do strike through font and you, you don't just delete it because if you delete it, you know, people might wonder where in the world did that thing go. But if you use, if you can use strike through font or you can somehow archive it or add a comment or somehow note that this is no longer a priority, or maybe even put it at the bottom of the list and say parking it for later or whatever. Sure. That's a really nice thing. What I talk about is a reflect and reset and an a reflect and reset. We do that at the end of the cycle. Okay. Where we go through each key result, we talk about, you know, do we want to keep modify, remove, or like abandon it or defer it?

Ben Lamorte (34:41): Or what do we want to do for the next cycle? And sometimes we'll remove it as a health metric. Other times we abandoned it because it was the wrong thing. Sometimes we defer it because Hey, the holidays are coming. We didn't get it done. We got to focus on that next year, whatever the case may be. The thing is some of my clients who are really, really good, and I'm going to call one out, Indeed, Indeed. You know, everybody's going to get jobs from Indeed some day. These guys super smart, some of the best engineers I've seen, what do I mean by that? When they have their OKRs reviewed. Now this is in the middle of the cycle. They're doing kind of a mini reflect and reset. So what that means is every key result is, Hey, if you can't prove to me that this key result is valid and it's driving the right behavior, take it out.

Ben Lamorte (35:18): Why are we even, why are we even talking about this? I want, so they're having a very, I would say mature use of OKRs I wouldn't recommend this for everybody. In fact, I guess my best answer would be the first quarter or two or even three or four that you're doing OKRs. You might want to say, look, we write the OKR is we lock it down. That's it. At the end of the quarter, we're going to do a reflect and reset. We can always change things around and you know, if some of them are obsolete, that's fine. That'll be a learning. We'll just deal with it. And that's probably fine if you're at the level of these folks at Indeed who have been doing OKRs for a couple of years now, and these guys are super smart, they're really into this kind of stuff.

Ben Lamorte (35:51): You know, they'll take two or three minutes. This key result. I think we need to modify it because it's not driving the right behavior. So instead of saying, we need to get more partners on board, on board, you know, this number of partners, what we really gotta do is just change that to Microsoft partners, because they're the only ones that matter. And we can onboard Microsoft partners from 8 to 12. That's much better than saying onboard overall partners from, you know, 25 to 50. Okay. Let's cross it out and change it right now. Here's why we did it. Boom. This is great. All right, next. And these guys are just, they're using this OKRs model. It's almost like really to the next level. So, and I, and I want you to get there. So ultimately what I'm saying is I want you to eventually get to a place where you're very fluid with OKR and you're probably changing or tweaking.

Ben Lamorte (36:30): OKR is like a good third of the, of the key results are going to be tweaked. Let's say in a given cycle, you know, even at Oracle, what they did is they had this culture of set the bar high and overachieve. So in their version of OKRs in the middle of the cycle. They would have said, Hey, we're going to onboard 12 new customers in this product or whatever. And in the middle of the quarter, they say, well, we've already got 14. We're going to cross that out and we're going for 40. And that was just the way they did it. Now that was Oracle because they were crazy. They were crazy growth, right? They were more than doubling their, their staff every year, right? I mean, you're talking about massive growth. That was the eighties, late eighties. And not everybody can do that.

Ben Lamorte (37:01): Okay. But in their case, most of the key results, the culture was cross it out and set it even higher in the middle of the cycle. So I think this is a really important quote, deployment parameter of how do we want to handle these changes? And we do want to work toward eventually getting to the point where we're going to allow changes, but probably for the first cycle or two. Eh, maybe we say you can't make changes. That's what we'll do with the reflect and reset, because the skills that you need at the reflect and reset at the end of a cycle, it takes a little bit of time to get there. So if we empower you to start changing key results in middle of the cycle, that's not a very good idea considering we're still learning how to do this OKRs thing in the first place let's build, let's build a little experience before we do that. So that's actually, this has been a helpful podcast for me because I'm starting to think that's probably the right recommendation to give. Maybe I got to go update my book. Okay.

Speaker 3 (37:51): I'm glad this is helping someone out. Pre-Release that's awesome.

Ben Lamorte (37:54): I'm not sure if it's helping you if you're listening, but Hey...

Jenny Herald (38:02): That's it for this episode of Dreams with Deadlines. Thanks for listening. If you liked today's episode, please subscribe and share. Show notes can be found on quantive.com/radio. If you want to learn more about our product and services, head out to gtmhub.com. If you have questions that you'd like answered on the show, shoot us an email at radio@quantive.com. Tune in next time.