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Book notes: Who Does What By How Much?

  • Tue, 9 Jul 2024

Book notes on "Who Does What By How Much? A practical guide to customer-centric OKRs" by Jeff Gothelf and Josh Seiden

These are my notes on Who Does What By How Much? A practical guide to customer-centric OKRs by Jeff Gothelf and Josh Seiden.

Found the book not only practical but inspirational. OKRs FTW!

Key Insights

  • OKRs high level steps:
    1. Leadership identifies impact, and the strategy to achieve it.
      • Express them as high-level organizational OKRs.
    2. Teams create their ORKs, tied to the org OKRs, expressing KR as outcomes.
    3. Teams figure out and deliver outputs.
  • OKRs do not contain solutions.
  • OKR key principles:
    1. Focus:
      • Real focus means fewer OKRs.
    2. Autonomy.
    3. Alignment.
    4. Accountability.
    5. Transparency.
    6. Agility:
      • Ability to change course in response of learning.
      • Opinions and ideas, even the bosses ones, are all hypotheses; they have to be proven to be true.
    7. Customer-centric.
  • Outcome:
    • Outcome is a measurable change in your customer’s behaviour that creates value.
    • Expressed in the form:
      • Who? is your customer.
      • Does what? is their behaviour.
      • By how much? is the measure of change in their behaviour.
  • OKRs work when they reflect and express your strategy.
  • What challenge to tackle is the first strategy decision.
  • Share your strategy as a compelling story.
  • OKR writing:
    • Focus on the things you can control.
    • Objective:
      • Provide a clear why.
      • Not how you overcome the challenge but how the world has changed once we’ve solved the problem.
      • Inspirational, qualitative, time-boxed, specific.
      • Positive statement.
      • It has a parent OKR.
    • Key result:
      • Expressed as an outcome.
      • Target is often a guess, but there is a lot of value on the conversations to figure out.
        • Do not ask open-ended questions to figure out. Close-ended questions will move the discussion forward faster.
      • Key result that you cannot measure are ok.
  • Make a distinction between important business as usual work and OKRs.
  • Do not use OKR at the individual level.
  • Common pitfalls:
    1. Key results as task lists.
    2. Writing OKRs to fit your preexisting to-do list.
    3. Measuring system behaviour instead of customer behaviour.
    4. Under-promising and over-delivering.
  • Of all possible solutions, prioritize high potential value and low risk first.
  • High risk, high value ideas should start with some learning (de-risking) activity.
  • Learning is work and execution is work.
  • Look at the rate of change in your metrics versus the effort you’re putting in:
    • Consider if you want to change tactics or consider it “done”.
  • Aligned autonomy requires transparency.
  • Provide universal access to data:
    • Without data, you’re going to have problems.
    • The easiest to access the data, the faster teams can make decisions and move forward.
    • Make access to data the path of the least resistance.
  • Particular attention to blockers of:
    • Learning work.
    • Data access.
    • Team autonomy.
  • Killing an idea that isn’t going to work it is progress and cost savings.
  • For new cultures to take hold, leaders must model them.
  • It is better to deliver value in smaller batches, with consistency over time, than to swing for the fences with long-term, ambitious or wildly creative projects.
  • Data from research rarely shows decisive results.
  • Evaluate people’s contribution towards the team’s OKRs using the 7 key OKR principles.
  • Operationalizing OKRs at scale across a large organization can often take years.
  • Avoid “cascading” OKRs.
  • Dependent teams might share OKRs.
  • Every OKR implementation is different because every org is different.
  • The most powerful predictors of success today are humility and curiosity:
    • Build cultures of learning and agility.

TOC

Intro

  • Every org wants to get better.
  • Orgs aren’t worried about people working hard enough, but working on the wrong stuff:
    • Most common reason: people lose track of what their customers want.
    • Other big problems: alignment, collaboration, strategic focus.
  • OKR is a tool to align teams around customer needs and focus them on company strategy.
  • Everyone has a customer.
  • Outcome:
    • Who? is your customer.
    • Does what? is their behaviour.
    • By how much? is the measure of change in their behaviour.

Part 1 - What Are OKRs?

Chapter 1 - What Are OKRs?

  • 3 parts:
    1. Goal-setting framework:
      • Objective:
        • The goal.
        • Inspire the team and provide a clear why.
        • Inspirational, aspirational, qualitative, time-boxed and specific enough to create urgency.
      • Key result:
        • How you measure progress towards your goal.
      • OKRs do not contain solutions.
      • Outcome is a change in behaviour that creates value.
    2. OKRs are a process:
      • Not only how to set goals but also how work towards them: from daily to annual.
      • OKR cycle.
    3. OKRs are a culture:
      • OKRs should reflect the specific culture of the org.
      • OKRs should be customized for each company.

Chapter 2 - Why Use OKRs?

  • Key principles:
    1. Focus:
      • Real focus means fewer OKRs.
      • OKRs only current strategic priorities.
        • Everything else is either business as usual or must wait.
    2. Autonomy:
      • Teams writing their OKRs and creating the results.
      • OKRs are set with a mix of top-down and bottom-up process.
    3. Alignment.
    4. Accountability.
    5. Transparency:
      • Puts pressure to improve data collection and access.
    6. Agility:
      • Ability to change course in response of learning.
      • Opinions and ideas, even the bosses ones, are all hypotheses; they have to be proven to be true.
    7. Customer-centric.

Chapter 3 - OKRs and Outcomes

  • Success means that you’ve created a valuable outcome.
  • Outcome is a measurable change in your customer’s behaviour that creates value:
    • Output -> Outcome -> Impact.
    • Very rarely use impact to write objectives:
      • They are too big and the results of too many factors.
  • High-level steps:
    1. Leadership identifies impact, and the strategy to achieve it.
      • Express them as high-level organizational OKRs.
    2. Teams create their ORKs, expressing KR as outcomes.
    3. Teams figure out and deliver outputs.
  • Value:
    1. Make your customers successful.
    2. Respect their time.
    3. Solve real problems for them in meaningful ways.
    4. Are a delight to use.

Part 2 - Writing OKRs

Chapter 4 - Strategy and OKRs

  • You can write well-structured OKRs and still focus on the wrong thing.
  • OKRs work when they reflect and express your strategy.
  • Strategy is an opinionated and coherent approach to addressing an important challenge:
    • Important challenge: don’t have obvious or easy solutions.
  • If you’ve setting OKRs for your team, then you’re using strategy.
  • What challenge to tackle is the first strategy decision.
  • Strategy isn’t a plan; it’s an approach.
  • Steps to create strategy:
    1. Identify the biggest challenge:
      • Finding your most important challenge is a simple thing to describe, but it’s hard to do.
      • At an org level:
        • What’s your goal?
        • What are the obstacles to achieve that goal?
      • At the team level:
        • What is the most impactful thing your team can do to support your org’s strategy?
        • Look at the intersection of your team’s responsibilities and your org’s goals.
          • Clear connection between your strategy and the org strategy.
        • Consider your peers initiatives.
    2. Identify your market:
      • Who are the people you’re going to focus on?
    3. Propose your unique competitive approach:
      • Prompt question on page 62.
  • Share your strategy as a compelling story.

Chapter 5 - Who Does What?

  • To figure out who does what:
    1. What does your team have control over?
      • Focus on the things you can control.
      • If your team is not autonomous consider coordinating with overarching OKRs or complementary OKRs.
    2. Who: which customer will you target first?
      • Be as specific as possible.
      • List 3 to 6 plausible roles.
    3. Figure out “does what”:
      • Tell a story about the customer’s journey.
        • Pay attention to the “does what” in the story.
        • Write down 3 to 6 important behaviours using the [who][does what] format.
        • Pay attention also to the obstacles the customer has.
        • Consider user story mapping.

Chapter 6 - Writing OKRs

  • OKRs are best created in collaboration with your team.
  • Objective: provide a clear why.
  • To start:
    • At the org level, one OKR per business unit.
    • At the team level, only one OKR.
    • 2 or 3 key results per objective.
  • More OKR means less focus.
  • Steps to create objective:
    1. Gather what you need:
      • See chapter 4 and 5.
    2. Identify biggest obstacle:
      • See chapter 4 important challenge.
      • From org’s OKRs.
    3. Turn obstacles into positive statement:
      • Not how you overcome it but how the world has changed once we’ve solved the problem.
    4. Self-check objective:
      • Check:
        • It is a positive statement.
        • It does not contain a solution.
        • Inspirational, qualitative, time-boxed, specific.
    5. Find your parent OKR:
      • No need to be strictly hierarchical.
  • Steps to create key results:
    1. Gather list of customers and customer story from chapter 5.
    2. Turn into 2 to 4 statements in the format: [who] + [does what] + [by how much].
    • Self-check question: if we achieve all key results, will we have achieved our objective?
      • If not, some key result is missing.
  • By how much?
    • Find a good enough target:
      1. It is possible:
        • Often a guess, but there is a lot of value on the conversations to figure out.
      2. It is valuable:
        • Easier to answer.
      • Do not ask open-ended questions to figure out. Close-ended questions will move the discussion forward faster.
  • Scoring OKRs:
    • Bad:
      • It can lead to the team focusing on the scores themselves instead of on the results.
      • Performance evaluations and compensation.
    • Good:
      • Diagnosis tool.

Chapter 7 - Setting OKRs Through Collaboration

  • Top-down and bottom-up:
    • Goals are both strategic and realistic with deeper understanding.
    • People are more motivated.
  • Process to set OKRs collaboratively:
    1. Top-Down
    2. Bottom-up.
    3. Collaboration:
      • With leaders and peers.
      • Be prepared to defend your strategy, obstacle, parent OKR.
      • Discuss key result numbers.
      • Dependencies and collaborations with other teams.
    4. Revise and publish.

Chapter 8 - Common Questions About Writing OKRs

  • Make a distinction between important business as usual work and OKRs.
  • Key result that you cannot measure is ok:
    • Use qualitative data instead.
    • Use leading indicator.
    • Ask for help to figure out how to measure it.
  • Do not use OKR at the individual level.
  • In some cases is ok for teams to share OKRs.
  • Discipline-oriented teams struggle to adopt OKRs:
    1. Share the OKRs of the team they are working with.
    2. OKR: make the team itself better.
    3. Treat other teams as clients, and set OKR accordingly.
    4. A mix f all of the above.
  • Common pitfalls:
    1. Key results as task lists.
    2. Writing OKRs to fit your preexisting to-do list.
    3. Measuring system behaviour instead of customer behaviour.
    4. Under-promising and over-delivering.

Part 3 - Using OKRs

Chapter 9 - The OKR Cycle

OKR cycle

  • The only thing that matters is results.
  • OKRs are one of the best frameworks for encouraging real agility.
  • Learning and execution should happen continuously.
  • Check-in:
    • Monthly: informal.
    • Quarterly:
      • More structured.
      • Recommit, update or discard OKRs.

Chapter 10 - Working with OKRs

  • OKRs align everyone around solving problems.
  • Not “when are we done?” but “How soon can we start creating value?”
  • Adopt an experimental mindset:
    • Express possible solutions as testable hypothesis:
      • “We believe that [solution] will achieve [outcome]”.
  • Aim to be more experimental, outcome-oriented and customer-centric.
  • Before executing, start by reviewing your OKR.
  • Of all possible solutions, prioritize high potential value and low risk first.
  • High risk, high value ideas should start with some learning (de-risking) activity.
  • Learning activity:
    • First list what you are trying to learn.
    • Consider what is the fastest way to learn so that you can make a decision:
      • Talk or watch your customers work.
      • Avoid surveys:
        • Hard to do well.
        • Talking to 6 clients > 100 survey answers.
  • Work in smaller increments.
  • Learning is work and execution is work.
  • Collect and share both quantitative and qualitative data throughout your org.
  • Without data, you’re going to have problems.

Chapter 11 - Checking In

  • Monthly and quarterly are required if you want to make OKRs work:
    • Retro and weekly can be added to other similar meetings.
  • Assessing progress:
    1. Outcomes i primary.
    2. Team’s confidence on achieving the goal is a conversation starter.
    3. Scoring: most useful for quarterly check-ins.
  • Weekly check-in:
    • Not problem-solving but status meeting.
    • Only for the immediate team.
    • 30 mins:
      • 10 mins:
        • Review key results.
        • Highlights that require some attention from the team.
        • Confidence review.
      • 10 mins:
        • Discuss issues from confidence review.
        • Raise blockers.
        • Major new learnings.
      • 10 mins:
        • Decide on actions and follow-ups.
    • Keep an internal record for the team.
    • Share anything important with stakeholders.
  • Monthly check-in:
    • With stakeholders.
    • 60-90 mins.
    • Opening:
      • Review key results.
      • WIP review.
      • Optional: confidence review.
      • Stakeholders share any strategic updates that are important for the team’s work.
    • Middle:
      • Learnings: most important part of the meeting.
      • Discuss obstacles: not problem-solving.
      • Adjust OKRs: it should rarely happen.
    • Closing: actions and follow-ups.
    • Capture and share notes.
  • Quarterly check-ins:
    • Same as weekly but emphasis on adjusting OKRs.
    • With other teams.
    • Look at the rate of change in your metrics versus the effort you’re putting in:
      • Consider if you want to change tactics or consider it “done”.
  • When changing OKRs:
    1. It should never be a surprise.
    2. Prepare evidence.
    3. Bring an informed/educated proposal.
    4. Explain the cost of not changing OKRs.
  • Retrospective meeting:
    • Post the key OKR principles to prompt feedback on how the team is doing on those.

Chapter 12 - Planning with OKRs

  • Embrace uncertainty and encourage agility:
    1. Reduce the time horizon of your plans (up to 2 quarters in advance).
    2. Filter out work that does not or no longer help with the OKRs:
      • Sunk cost is lost.
      • Hard part is saying “no”, specially to work in progress.
    3. Outcome-based roadmaps:
      • Quarterly OKRs + potential work items + learning activities.
      • Date-driven work:
        1. Reduce scope.
        2. Each small batch should generate a result.
      • Review and update during checkins.

Part 4 - Making OKRs Successful in Your Organization

Chapter 13 - Start with Why

  • Why to adopt OKRs:
    1. Problem statement.
    2. Vision for a positive future state.
    3. Hypothesis for the proposed process/culture.

Chapter 14 - Support OKRs from the Top

  • All change (good or bad) is hard.
  • The most important predictor of success when going through any change is consistent and continuous leadership support.
  • Ways for leaders to support OKRs:
    1. Start with why (see chapter 13).
    2. Provide clear strategy and high-level OKRs first (see chapter 4).
    3. Trust the process and your teams:
      • Aligned autonomy requires transparency:
        • Weekly:
          • What they’re working on.
          • OKR progress.
          • Learnings.
          • Changes in plan.
    4. Support learning work.
    5. Provide universal access to data:
      • The easiest to access the data, the faster teams can make decisions and move forward.
      • Make access to data the path of the least resistance.
    6. Create a safe culture of learning:
      • Learning is key for OKR success.
      • Ask “what did you learn this week?” instead of “when X will be done?”
      • Killing an idea that isn’t going to work it is progress and cost savings.
    7. Model the values you want to see in your culture:
      • For new cultures to take hold, leaders must model them.
      • As a leader you must demonstrate how much you value facts and data, even if they contradict what you said publicly.
    8. Design the org for collaboration and agility:
      • Be open to reorgs.

Chapter 15 - Managing Up. Changing Responsibilities

  • Middle managers have an even harder job:
    • They face pressure from every side.
  • OKRs change how they do their jobs:
    1. Manage up:
      • Tie any bosses request to an OKR:
        • If there is no connection, push back or make boss drop some OKR.
      • Communicate, tying up to OKR.
    2. Changed responsibilities:
      • The taskmaster part of the manager’s job goes out of the window.
      • New job:
        • Ensure team’s OKRs and work are aligned with strategic direction:
          • Keep an eye for when the team start drifting off.
        • Setting guidelines and constraints around the team’s scope of work:
          • It is better to deliver value in smaller batches, with consistency over time, than to swing for the fences with long-term, ambitious or wildly creative projects.
        • Remove blockers:
          • Particular attention to blockers of:
            • Learning work.
            • Data access.
            • Team autonomy.
        • Make key decisions when team needs guidance:
          • Data from research rarely shows decisive results.
    3. Adjust performance management criteria:
      • Do not create individual OKRs and then use them for individual performance management:
        • Dont do this.
      • Evaluate people’s contribution towards the team’s OKRs using the 7 key OKR principles. Examples:
        • How well they used their time in service of the OKRs (focus, accountability, prioritization).
        • How well they incorporate learning activities into their work (learning).
        • How well they use evidence to inform their work and make decisions (agility, learning).
      • Performance management changes are key as they incentivise people’s behaviour.

Chapter 16 - Scaling OKRs

  • Operationalizing OKRs at scale across a large organization can often take years.
  • Start with a clear org strategy.
  • Avoid “cascading” OKRs.
    • Align by ensuring every OKR has a parent OKR.
  • Dependent teams might share OKRs:
    • Avoid hyperlocal optimizations.
    • Promote collaboration.
    • Simplifies OKR management and review.
  • Timebox OKR planning to 1 month after strategic direction has been set.
  • When we roll out OKRs, the people in our org are our customers.
  • Use a experimental mindset.
  • Every OKR implementation is different because every org is different.
  • For the pilot, err on the side of radical transparency.
  • Start small.
  • Put your best folks on the challenge.
  • Dedicated full-time OKR coaches.
  • At scale, the right OKR tool makes a significant difference.

Conclusion

  • The most powerful predictors of success today are humility and curiosity:
    • Build cultures of learning and agility.
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