I hate OKRs... and other thoughts about goal setting

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I hate OKRs.

Let me explain...

I believe strongly in having a goal-setting process. The purpose of goal setting in my mind is to ensure that everyone is aligned on what success looks like for the next period of time and how we know if we got there. A good goal setting process is important for two reasons: 1) it creates clarity so that your team knows what to prioritize and can make aligned choices day-to-day and 2) it is an essential learning process for discovering how to govern and run your business.

In smaller startups (50-250 people), I focus goal-setting primarily on the top level — the company goals — and I don’t worry about having any elaborate process for teams or individuals. The company goals usually drive the clarity for teams or teams can choose to add their own process to get to whatever level of detail they need. The most important thing to me is that everyone is clear on where the company needs to go in the next period; everything else will flow out of that clarity. And to be clear, I focus on having 3ish clear metrics / goals that we use to measure company progress, not 10.

When you’re designing a goal-setting process, the number one thing you need to do is ask “what do we need (in terms of goal setting) at our stage of company and for our specific business?”

The reason I hate OKRs is that they are often the wrong answer for startups. OKRs are just a form of a goal — they make the goal specific and measurable and all the other things a goal should be. But OKRs are a very heavyweight, structured form of goal setting that was evangelized by Google. Just because OKRs worked for Google does not mean they are right for you. (As an example, SMART and V2MOMs are two other forms of goals…)

I see a lot of startups try to copy and paste processes like OKRs, or practices from companies like Facebook, Google, or Microsoft, and it just doesn’t work. It’s too much structure and too much specificity. I watch startups go in to goal-setting processes and come out with a set of goals that reads like a scroll. They’re trying to quantify everything. There is a goal for everything. People inside the company get lost in the KRs or the excel spreadsheet that you created to house the OKRs. OKRs or heavy weight goal-setting processes often mean that people in your company lose the point — what is the most important thing we have to do this period? — which means they lose the alignment and that is the whole purpose of goal setting.

Things I believe about effective goal setting inside of startups:

1) Less is more. What is the smallest number of things you need to define in order to create alignment and get everyone on the same page about where we are going and what success looks like? Make sure that every person who reads the goals or listens to the presentation will walk away clear on what the most important thing is. As a test, a week after a goal setting presentation at an All Hands, as 3-5 mid-level or junior people what the goals are. If they don’t remember (at least some of it), you are probably “over defining” your goals or communicating them poorly.

2) Figure out what is right for you. You can decide when you set goals, how often you set goals, how long it takes to set goals, etc. There is not one answer here, and also the answer will change as your business grows. What is right for Google or what was right at your last company or what works at your friend’s company is not necessarily right for your company. And goals can take many forms (not just OKRs!), but generally a good goal will tell you what you’re trying to accomplish, on what time frame, and how you’ll know if you did it.

3) It is as important to define what you are NOT going to do as it is to define your goals. We spend so much time focused on goal setting but actually the most powerful decisions should come in the form of what you’re not going to do. I always set non-goals — things we’re not going to do — as part of the goal-setting process. The definition of being in a startup means you have to make choices — you only have a small team and finite resources to get things done so you have to choose the most important things to focus on. The key word there is choose. If you are not making hard choices then you are probably setting unrealistic goals, meaning you are trying to do too much. You have to work hard to ensure that non-goals aren’t perfunctory; they are only effective if they are painful. By painful, I mean that when you put things on the list of what you’re not going to do this period, it needs to hurt and you need to feel a little scared — it needs to feel like a real, meaningful choice. If it doesn’t hurt, then you didn’t make a hard enough choice, and by extension, your goals are probably unrealistic.

4) Goals are useless if all you do is set them. I see lots of folks set goals, declare victory, and then put them in a drawer. Congrats! You just wasted a lot of time. You need a system to check in on (and adjust) goals as much as you need the goals themselves. This James Clear article was pretty thought provoking for me. In it, he says “winners and losers have the same goals,” and it has really stuck with me. Goals are only effective if they are how you govern the work and momentum of the company. Having a goal is not the point. First, you set goals, and then you check in on them on a regular basis. How often? Again, figure out what is right for your company. The check in should include information and discussion about things like: how are we doing against our goals; what is preventing progress; if we’re going to miss, why?; if we’re going to exceed, why?; if we now believe the goal is wrong, why? and should we change it? etc. 

5) Goal setting is an iterative process. It is completely fine to adjust goals midway through or to realize halfway through a period that the goal isn’t the right one. As a startup, one of the primary points of the goal-setting process is to get to know your business better. You are learning how to govern it. You will be wrong a lot. But the only way you get to a point where you have a systematic way of running your business is if you actively learn: try a set of goals, learn what worked and what didn’t, iterate the next cycle. It will take you a while — I’d say 1-2 years — to get to a place where you know your business well enough that goal setting becomes more predictable. That is normal.

So… I could go on and on about goal setting but main point here is don’t just default to OKRs. Go figure out what goal-setting process and cadence is right for you.