“Many of our leaders and too many of our fine institutions are failing us,” proclaimed venture capitalist and author of “Measure What Matters”, John Doerr, during a talk at the Commonwealth Club of California in October.
He believes they are failing for a few reasons. In some cases, it’s due to intentional unethical behavior. Other times, it results from a lack of transparency or a mismatch between an institution’s intended mission and their actions.
He is not alone in his thinking. According to a 2018 Gallup survey, less than half of Americans have confidence in many of the nation’s top institutions, including big business, Congress, and banking. This reflects historic lows, falling even before the 2008 great recession. Change is long overdue.
Transparency is the simplest way to start earning back that trust. It allows all stakeholders to hold institutions accountable on whether their actions align with their goals and values.
In his book, Doerr offers a way forward to greater transparency and trust through objectives and key results (OKRs). The OKR management system was developed by Doerr’s mentor and former Intel CEO Andy Grove, who was widely considered one of the greatest managers of his era. Under his leadership and the implementation of OKRs, Intel grew from a startup to one of the world’s most important technology companies.
OKRs help an organization track and prioritize its most important goals. An objective is the goal (the what) or direction the organization intends to work toward, and the key results are the metrics (the how) used to determine how an objective is met. It’s a simple, yet powerful tool.
According to Doerr, a key difference between OKRs and traditional management systems, such as key performance indicators (KPIs), is that they sanction a wholly different kind of conversation. OKRs demand that every what and how must align with the very important question: Why are we doing this work? A well-communicated mission not only motivates a team but also helps evaluate goals on whether they link with the team’s collective values. An active place where questioning is appreciated facilitates true back-and-forth conversations throughout all levels of the organization.
The importance of transparency
One benefit of OKRs is transparency, which leads to dialogue and makes an organization’s objectives and purposes clear.
“What would have happened if Theranos had transparent goals shared across the entire organization?” Doerr asked his audience at the Commonwealth Club.
The infamous case of Theranos is an example of how secrecy can misalign a team. It also shows how great and noble ideas are worthless without proper execution.
Earlier this year, Theranos founder Elizabeth Holmes was found guilty of massive fraud involving $700 million. Theranos, once Silicon Valley’s buzziest startup, promised to revolutionize the healthcare industry through a new medical device that was allegedly able to conduct dozens of blood tests from a single drop of blood. Instead of focusing on their mission to help people, Theranos quickly commercialized their still-faulty technology and put lives at risk.
The truth about their faulty machines was kept secret through a lack of organizational transparency. Teams were often siloed with most employees not knowing what their fellow colleagues were working on. And those who knew something was wrong were ignored or sometimes punished when they spoke up.
In an alternate world, with the help of OKRs, Theranos might still be working on or already have fulfilled their promise of innovation. Here is where Theranos could have learned something from Google. When Google launched their web browser Chrome in 2008, competing against the then monolithic Internet Explorer, they knew they had to launch something completely new. Their objective was to “develop the next-gen client platform for web applications,” and their main key result was to reach an average of 20 million weekly active users by the end of the year. They fell short. But rather than hide low numbers or set lower targets, they continued to stretch their goals and improve their product. It wasn’t until 2010 that they finally reached and surpassed their new goal of 111 million active users.
By using goals that stretched their imagination of what was possible, Chrome has become the world’s fastest and most popular web browser.
OKRs would have instilled a culture of radical transparency at Theranos. Everyone would have known about the progress and failures of the devices and would have known the best way to contribute to improving the technology as measured by their WHY—helping patients through accurate and easy blood tests. Instead, the leadership at Theranos failed its team by prioritizing profits and media attention over their mission.
A better way forward
The story of Theranos is just one of the many organizations failing to live up to their promise. And while OKRs might still not have been enough to solve all the problems at Theranos, they give the rest of us a greater chance to avoid their mistakes.
The old way of doing things just isn’t working anymore. We are in a critical moment in our nation’s history that is in dire need of better leaders and institutions. When organizations are honest and measure the right things, they can leverage their teams to take on the nation’s biggest challenges, including improving access to high-quality education, rising income inequality, climate change, and making healthcare more affordable. That is one of the reasons Doerr evangelizes the use of OKRs at organizations in all industries.
“My dream is for OKRs to go beyond our businesses, beyond our nonprofits and into our schools, hospitals, and city governments,” said Doerr at a training with Obama Foundation back in September. “Imagine what could be achieved if a city government made all its goals transparent and regularly reported its progress to the community.”
Any organization or team can take advantage of this simple, but powerful system of setting and measuring the right goals. That’s a kind of muscle we should work on as a nation.
If you’re interested in starting our OKRs 101 course, click here.