Setting OKRs & Goals

"Maybe instead of motivating everyone on GMV, you motivate them on GMV per surface and you divide up the surfaces, or maybe you motivate them on actually different goals that underlie... Can you goal on those input metrics, can you goal on number of people who visit, number of people who convert, number of people who reorder?"

"I've seen OKRs fail multiple times when you're running this kind of a marketplace. Big bets work much better... because the fundamental assumption here is that it is solving for a kind of user... But if it is working for three different kinds of users, then all the goals will all the time be in conflict with each other."

"We have three main OKRs that we're focused on for this year, for example, across the whole company. And then we have department level OKRs, many of which are in support of the company level OKRs... this has been a really incredible transformation of dependency mapping, being able to make sure that we're pulling all the levers across the organization to drive our most important objective."

"The second thing that we do is that we have kind of loose quarterly OKR. So like, 'Okay, if we believe that, what do we need to do next quarter to actually put ourselves on a path to that?' And then from there, teams are operating in squads and they're kind of setting out four to six week goals."

"When you have teams naturally break up the world into different funnel stages or different points in the journey, it gets very seductive to look at my part of the funnel, and what's my conversion rate through that part of the funnel? ... But in practice, I talked about it's actually almost always easier to just make it harder to do the thing right before your step in the funnel to increase your conversion rate."

"We ran against KPIs are basically banned as OKRs or banned and all that. And so certainly, in growth you have metrics, but they take a different form. And then in core, it truly is, do we have conviction that this is the right technical foundation to build the future of commerce?"

"We realized we're not really actually working on things that matter to customers that are going to move the needle over the long term... So we then figured out ways to measure them creating a set of input metrics. And so then when we would develop our operating plans and review our business each week and set our goals, we were hyperfocused on those inputs and the input metrics."

"The main benefit is that there's a lot of concrete action through a OKR that you don't always get from strategy... It creates a cadence of progress... It creates alignment... it creates this learning cycle."

"I would say, "What am I doing this week to get closer to our goals?" If you could answer that question, you could give up all the OKR stuff, but if you just asked the question, "What are we doing this week to get closer to our strategic goals, our longer term goals?" That is the very heart of it"

"I like three. I think about it as triangulating. I always like something that's really hardcore numbers. I like something that's a little squishier, like a quality, make sure you don't forget about it. And I usually like something that involves a dollar sign"

"Objectives, people make them so fluffy that they don't have any meaning... Your objectives should make you, when your alarm goes off and you wake up, you go, "Oh yeah, I'm changing the world today..." And then the key results, it's always going to be tasks."

"I recommend some pretty long brainstormings on the key results, but the objective is sort of a manifestation of the strategy at a one quarter level."

"give my book to your best team and say, "We're thinking about OKRs. Can you guys see if it works?"... because the best team always wants to be better. I love piloting with the best team, but they're still very imbued in your culture, so they'll figure out where OKRs in your culture don't fit."

"instead of having your boss approve it, you write your OKRs, you get three... teams that work with you enough to know what you're up to, to look them over and they just look them over, 24 hour turnaround."

"Brian had that he had to maybe create ridiculous goals, because even if we hit half of that goal, it was very encouraging. What he missed in that was the fact that when you miss a goal... you're setting people up for a lot of stress."

"Stripe, we have an annual set of numeric targets that we put together, we have a system of goals or OKRs, objectives and key results... what is your structure for setting milestones that you want to achieve, whether they're numeric or more like a binary, we got this thing launched, we didn't?"

"Put ambitious goals, it'll make you think differently. And, we really love now to do it even when we don't know it's possible and it actually works for us time after time."

"PM in Monday, first and foremost, is responsible for creating the shared understanding on what would be impactful for our customers... and second, how we will know that we moved the needle."

"Those documents, to me, are the charter: 'What is your mission, your vision and your strategy?' The goals: 'What are you aiming to do and how are you going to measure success?' And then the roadmap: 'What is the thing that you're shipping?'"

"Whatever it is, there has to be a conversion metric that matters for the business... driving traffic to something that doesn't convert for you wouldn't be a good idea."

"Really understanding who it is that they're trying to attract with SEO that's the metric we're going to use. And again, I don't know why SEO... this happens with SEO but not any other channel. No one doing paid marketing will ever say, 'This is how many times I'm number one on this search...'"

"If our goal is to write 10 blog posts this month. And I'm like, no, that's not a goal, that's maybe a tactic. But the goal should be traffic and the conversion rate from that traffic or the signups that come from that. So you shouldn't have activity goals, you should have impact goals."

"We moved from quarterly, very expensive quarterly planning, which took one month every three months, so basically 33% of the time was planning, to a biannual one-pager on, these are the company priorities and it's much more smooth and much faster."

"I just need you to force rank these three factors for me: growth, engagement, and monetization. And I need the two of you to agree."

"At the very early stage, it needs to be a weekly plan, where while as you grow the granularity, you still need weekly plans, but you also need quarterly plans that wrap around that. You start with quarterly goals."

"I wrote down at the top of the page every single morning, I wrote down, 'I am the number one rower in the country.'... And then I wrote down three things I was going to do that day to move toward that goal. And I did that every single day that I was in college."

"The WBR or Weekly Business Review... It would be a series of metrics for different parts of the business... The way he ran that meeting would lead all those leaders to build these muscles because you wanted to be prepared to speak to the variances or trends in your business in a key metric and know your business and know what you were doing based on that thing."

"Once you have these two [North Star and Top KPI], you can further break them down into what I call metrics trees. So there's a metric three for the North Star metric and there's the metric three for the top KPI... and usually they overlap."

"Because it has spaces in there to say, 'Did you measure success? And was it successful or not successful? This roadmap thing is completed, what was the outcome of it?' So by creating all these spaces, it creates all these reminders for the team to go back and think about this stuff before they do work and after they do work."

"In any given time, Lenny, companies are working backwards from one of four things, whether they like it or not. I am working backwards from an exit. I'm working backwards from a next fundraise. I'm working backwards from profitability or I'm working backwards from winding down."

"Founders often make the mistake when planning for the year ahead of I need to be at this revenue to justify this multiple. And then all of the funnel math is a plug, and that's death, as opposed to here's what's been true for the last three months, six months, nine months, 12 months."

"I never asked for research teams to have their own separate OKRs. I said... shouldn't the PMs, the engineers, the designers and the research, everybody should have the same set of metrics for success because either we're doing it together or we're not."

"If the only way the organization is trained to think about what to build and what not to build is OKRs, it's equally unhelpful at the limit because sure, you can have a good sense of what you should build to drive metrics, but by the way, you might be focusing on the wrong metrics or that might not help you have the right balance of things to build."

"One of our key metrics that we always optimized... was DAU... but we often had features that would not lead to a good customer experience and the team would just be blind towards leaving hostile customer experiences in place because it was good for metrics and aggregate."

"In terms of specific features, we don't have goals for those... We just think that there should be features that help companies and sometimes we can look at the metrics before we start working on it... but we don't necessarily want to set, oh, we need to increase this specific metric by X. It's more like we want to solve this problem."

"In order to change behavior, you have to pick a behavior that you want to change. So, companies are really good at outcomes, but just not as sharp at picking the behavior... we need to get uncomfortably specific, we say. Just really specific in the behavior."

"setting the incentive, and the KPI, and the product, and the marketing team on the behavior is going to result in a more customer-friendly product and outcome."

"Instead of being obsessed with the goal, be obsessed with the system that gets you there. And so the phrase I sometimes use is goals with good intentions don't work. I really need to give a common example. A really common example is teams that are trying to learn about customers or do research. And one thing I've observed is a team may have a goal like an OKR of talking to 10 customers this quarter and they may or may not hit that OKR. And then if you watch closely, the next quarter, they may not have a goal of talking to customers anymore. And so their learning is going up and down."

"The first that I end up seeing a lot is just this idea that OKRs are not actually strategy. So I think the way that we plan and the way that our customers plan, the key point is it's critical to disconnect strategy discussions from OKR discussions."

"The other rule that we live by on the planning side is what we call a 10% planning rule, which is essentially just ensure that you're not for a given time period planning for more than 10% of that execution period."

"Commit to something that you can do over the course of a year and low, medium, high is always helpful in that space... It deviates from this notion of like, here's the single number that we're going to hit."

"I've personally used a GPT, the private GPT that I use myself that helps with some of the planning stuff for different quarters, and just making sure that I'm being consistent in how I'm framing things like driving back to individual metrics, stuff that, when people do planning, they often miss in our data."

"The really, really good PMs remember to follow up... if a PM comes back to me and says, 'Hey, remember we did that thing, here's what happened.' I can't tell you how rare that is."

"So the first is in setting team goals, no more than one step away from company goals. Don't let it get cascaded into oblivion."

"She stands and she's like, 'Okay, we're going to do things differently.' She steps up to the whiteboard, puts 1 million on the right end of the whiteboard, draws a line, 'This is the year,' draws a little tick on the line. 'This is where we are now. It's a smaller number than a million. This is where we need to get to. If our conversation doesn't start with this, I don't want to have the conversation.'"

"I just put this out on a whiteboard. I'm like, 'All right, a hundred million in profits by the end of the next financial year right now we're here. What else should be on this timeline?' Somebody said, 'Well, we're launching this in October.' So I put October up there. I go, 'Okay, so if we don't ship anything until October, and right now it's March, how much profit do we make until?' And they said, 'About 10 million.' I'm like, 'Okay. So that means that between October and March, we need to generate 90 million pounds of profits.'"

"Another difference is when you're given a problem to solve, that's not output, that's outcome, so you either solve it or you don't. ... In a real product team, you celebrate when you actually solve the problem, when you accomplish those results. That's why we say product teams are about outcomes, they're not about output."

"You need to have goals and at the company level, at the department level, at the individual level, you then need to track those goals. You need to track all the agreements that people make, all the actions they say they'll do."

"The second one is top goal, which is this concept from McKeown, who wrote Essentialism, which is everyone is making requests of you, but if all you do is spend all day is responding to other people's requests, you never actually march towards your own priorities. You need to A, create priorities and then set aside some amount of time each day, 30 minutes, an hour, two hours that you just work on your own priority."

"We also had to build a way to track the OKRs that were deployed and actually see where it was. So we had to build the dashboards for that."

"The thing that I love about a crazy big goal is that you feel completely inadequate before it. You want to work really hard to will it into existence."

"The North Star is ARR, Annual Recurring Revenue. And then you break it down into the levers that drive ARR, the leading indicator, so that could be activation rates, the number of customers you bring in, et cetera."

"No company needs more than three company goals and the point of company goals is to help people know what the most important things are to success."

"When you start interviewing, I want you to create your own version of the job description... I want you to create what I call a job mission with OKRs... It needs to be something where you are saying, 'Here's what I think I'm going to be accountable for. Here's what I'm going to actually... the outcomes I'm going to deliver,' right?"

"The reason I like the one-page plan concept is, it's simplifying. It's a way for the leadership team to come together and align... puts your vision and your values on the first column, your strategic intentions and your KPIs on the second column, your annual goals on the third, and your quarterly goals on the fourth."

"I think about all of the pieces of the strategy stack as being really clear about what is the end destination that you're solving for, and then you should work on goals to the extent that they help you reach that destination... I've had a few people yell at me about this. Typically, what happens is goals are almost the start of a strategic process rather than the end of it."

"I refer to that as the frontier of understanding. There's a point at which what the team knows and what the team doesn't know... if you don't understand how to move a particular metric, then the right answer is to set a goal to increase your understanding not to move that metric."

"We don't take OKR as a shell, but we take OKR as its core is cross-functional alignment, cross-functional goal silo... The things that we can improve is the input and output. The output is very clear, but what is actually the input sometimes is debatable."

"My suggestion is to really think about forecasting conservatively, setting up checkpoints and milestones around what future success may or may not look like. If you hit those goals, then decelerating or accelerating into it depending upon what you get there, and coming to an agreement with your board, with your sales team, with your sales leadership in advance so that there's no debate about what to do when you actually get there."

"I noticed that actually, if you have a real product strategy, a real one that everybody is aligned with, that you have got pre-alignment on, then a lot of this nonsense we tend to do with annual planning actually goes away. Now, you still have to do some resource allocation and all of that, but even there, you don't need that false precision."

"the local team has their own metric that they can directly influence... And then we created via the finance and data team, a translation layer for every team's metric into MAO."

"It starts with an outcome at the root of the tree, and then it branches into the opportunity space and then it branches into solutions, and maybe even assumption tests from there."

"I actually believe in, especially when it comes to products, to really set ambitious goals but then try to over-deliver on them... I see a mountain, you see the peak and the peak exactly how it looks like, you see base camp, you know how to start and maybe the middle of the mountain is kind of blurry, but you'll figure this out."

"We've used OKRs for a long time, and they've served as an anchor for my team over the last three years... we break those OKRs down of course even further into, we look two to three years out and build goals based off of that. Then we break them down by quarter and month, and then out of that for my team and what I do I need to, for my own sake and my team's sake, break those down by the week."

"The anatomy of a bet is that it's problem we want to solve, our hypothesis on the solution, and then some plan to win, some plan to actually get there and a way to measure that you got there."

"I think that, for me, there are three things that really matter about the good OKR, and one is legibility. People look at it and understand what it is, and it's not some weird obfuscated metric that doesn't mean anything to anyone. I think actionability, I want OKR to inspire action. You look at that and you're like, it's stirs action, makes me want to do something differently. And the third one is authenticity, which is, does this actually, honestly depict what you're doing, what you're trying to do on a day-to-day basis?"

"With Handshake AI, we've been way more focused on operating with data, and metrics, and rigor from an early stage. There's a gentleman named Sahil on our team who's been doing an incredible job with that... this weekly, monthly, quarterly operating cadence."

"I added basically a section in the dock, in the ticket stack. Ask the PMs to write the success metric ahead of time. As well as adding which of the growth lever this is helping. Is this contributing to acquisition, activation, retention, monetization?"

"We do six-week reviews. So, teams have this notion of every six weeks actually coming together and walking through the roadmap, the resourcing, and what they're working on... six weeks is a very good cadence, because it's short enough that you can remember the context and it's long enough... you can do a lot."

"Good OKRs to me are just clear articulations of your strategy, whatever it is that are important to you, and it boils it down into the next three months, here's what we're working on. And I think that is just really good for teams because, again, if you're always in the clouds, it starts to get hard to really bring things down to the feature level."

"You should have some sort of goal framework that is shared across functions is useful no matter the size or the scale of your business... because again, it takes your strategy and it brings it down into the now. So you can act on, in the next three months, you can bring something to life."

"We have an R&D set of metrics, we have pillar metrics, we have area metrics, and then at the team level, there's often one or two that they're really driving forward. So you can think of it as a nested structure around our product strategy as well as how we measure success."

"We used OKRs to drive our processes and we would have the teams present OKRs to us... we iterated every quarter, just like you iterate on a product. So every quarter we would say did the OKR planning work or not, and then we would adjust."

"Goodhart's law just says, 'Any metric that becomes a goal ceases to be a good metric.'... Why? Because no metric by itself is a complete heuristic for a complex business because business are complex. There's a million of different tensions in a company and you can't all keep them in harmony by optimizing for one fix. It's true that we don't have KPIs and we don't have at least OKRs in the Silicon Valley sense but we are extremely data-informed."