How to Set OKRs That Get Results in The Real World (Finally!)
If you've been looking for more specifics on how to set Objectives and Key Results that actually get results, this episode is for you. I talk with Jeff Gothelf, one of the authors of the outstanding new book "Who Does What By How Much?: A Practical Guide to Customer-Centric OKRs". By the end of this video you'll learn how to get real and specific in OKRs and use them in a way that they actually get you the key results you set, and those results actually create real impact for your organization.
Full transcript below
Practical Implementation of OKRs
Scott Levy:
When I first heard about the book, I didn't know what to make of it, but as soon as I got it, it became clear immediately that you guys were hyper-focused on providing the missing manual.
I’ve talked to so many teams who’ve heard about OKRs and maybe they've seen Google Ventures talk, or they've read Measure What Matters, then they go to implement OKRs. And somehow they're not functioning as OKRs ought to. What do you see in particular CEOs back from using OKRs as well? And I'd say, teams as well.
Jeff Gothelf:
Look, I'm grateful to Andy Grove initially, of course, for conceiving this idea and more recently to John Doerr for making this idea mainstream, and that's terrific. And, if you read Measure What Matters, he talks about Google and he talks about Bono, and who doesn't want to be like Google and Bono? It sounds amazing. But where it gets a little loose for us and why we wrote this book specifically is practical implementation and scale.
Most importantly, we see this as a fundamentally different way of setting goals, which I don't believe Measure What Matters actually puts forward. In Measure What Matters, John Doerr is very comfortable with things like tasks, actions, and output as key results. We're gonna try to achieve this outcome, and we'll do that by launching this campaign, talking to five customers, building this landing page for a website, or something like that. And it's very comfortable with that being a measure of success.
So, when organizations go to implement OKRs in the style described in Measure What Matters, there is this sort of vocabulary gymnastics happening where we're rebranding our goal-setting framework as OKRs, but nothing fundamentally changes, right? Today, most organizations are managing to output—to the production of a thing, to the deployment of a task or a campaign, or a set of activities that they want a team to do.
The Importance of Outcomes Over Outputs
Jeff Gothelf:
In our book, we are explicit that the key results have to be outcomes. They have to be changes in human behavior, measurable changes in human behavior. That's what makes this different, what makes it interesting, and what makes it difficult at the same time. It's very easy to rebrand your goal-setting system as OKRs and just continue managing to output because output is binary, right?
Did you build the mobile app? Yeah, there it is. I built it. Did you launch the marketing campaign? I did. Did you deploy the learning management system or the cybersecurity policy? I did all of those things. Terrific. But did anybody use any of those things? Was anybody more successful because we deployed those things? How do we know? What does their success look like? And are we seeing that success at scale that tells us we're building a business?
To me, I think this is the fundamental underestimation by CEOs of OKRs. I think a lot of folks see it as a mild shift in goal-setting tactics, when in reality, it's a fundamental mindset shift away from the production of a thing—which is a very old-school, industrial view of what organizations do today—and much more towards, "Did we make our customers successful, and how do we know as a measure of success?"
The Who Does What By How Much Formula
Scott Levy:
There are a lot of exciting directions to go with that. So I'm going to riff a little bit if I may, because it reminds me of one of my favorite quotes in the book, which is how soon can we start creating value? Which I think is always on the mind of every CEO. What I've seen implemented, unfortunately, in a lot of organizations is, we go through our planning process.
We're going to make up some OKRs. They do tend to be output-driven. And sometimes I'm just like, if we can just, let's just get the process rolling and then we'll learn to focus on outcomes. But too often, if you do that, you lose everybody. If those outputs don't produce any outcomes, everybody's pissed off.
What you guys offer here is not just intellectual. It's: how do we actually go out there and focus on these … correct me if I've got this wrong, but it's the customer journey, right? The customer journey is where we're creating value. So to answer that question, how soon can we start creating value? How quickly can we impact that customer journey? And so your formula is who does what by how much, right? The title of the book: how did you arrive at that?
Jeff Gothelf:
Josh Saiden, my coauthor, and I have been working together for 15 years, and we've been teaching this stuff for a very long time. And one of the benefits of teaching the same thing over and over again is you get to improve. The way that you teach, the way that you tell your stories. And you really get to see what actually works when you're teaching somebody a concept and what doesn't. And for a long time, we talked about key results as outcomes, as changes in human behavior.
And we would, and we see teams still struggle to really figure that out. They would come up with measures for the system. For example, they'd say something like 'system uptime is 99 percent' or something like that. And it's a metric and it's got a percent, so it's got to be right. And it didn't make sense. And then one day Josh was like, 'Okay, look. Let's talk about, let's break down the thing we'd like to see in the key result. There's really three things in here, right? We're looking for the person that, like, the actor in the system, the user, the customer who's doing something with the product or service that we're launching, and we're looking for the action that they're doing, right?
Some step in that customer journey. So let's start with that. Who's the person and what are they doing?' And that's where it started, right? 'Who does what' was the formula. And that really helped folks. You could see the light switch go on with folks and they're like, 'Okay, good. I get it. So the person is my, my regular weekly customer.'
'Terrific. Good. And what are they doing?' 'They're actually coming into the store twice. They're coming more frequently.' 'Okay. They're visiting the store more frequently. Terrific. Okay. Who does what? My regular customers. Visiting the store more frequently. Terrific. Now, if we're going to try to make that a reality, what's significant? For you, how much does that have to change or increase in this particular case?' And that's where the formula came from. The value equation was 'who does what by how much' and people got it, right? You could see that, the test was the test for, have you written a good key result is, are those three components there?
Is there a 'who,' is there an action 'does what,' and is there a 'by how much'? And it became such a... such a clear way to teach this. It almost was obviously at that point, the title of the book, right? There was... it became that almost by default."
Scott Levy:
It's beautiful. I can think of a specific customer journey exercise I did with leaders, and this company had crossed the $10 million mark. They were going to $20mm and needed to rethink how everything interacted. We came up with a lot of optimizations, but the missing piece was, how do we now take all this information we've done? And it was a great workshop, like we got a great map, but if only we'd had the book, Jeff. That would have really helped. And I've seen so many people, as I mentioned, struggle with it. What I like about it also is it's like design thinking for goal-setting. It's the same principles that I've seen work with design thinking. I don't know if you're familiar with Behavior-Driven Development - I suspect you are like - it reminds me of a behavior driven development spec and it's just clarity and simplicity and everybody can get it.
Setting OKRs at Different Organizational Levels
Scott Levy:
So a leader, a CEO, and at the top level of the organization, are we setting one OKR organization wide? Are we setting multiple objectives? How do you see this take hold in the organization? Say I'm a CEO, I'm going to go get this in place. What's the best way for me to start? Do I come up with my top five, my top three, my top one?
Jeff Gothelf:
Yeah. So a couple of thoughts there. Look, first of all, OKRs are going to help you determine what is most important for your organization to focus on right now. So one of the things that we'd like to base those OKRs in is a clear strategy. So what's the strategic direction for the company for the next 12 months, 18 months, something along those lines? Let's make sure we have that and that it's broadly communicated and everybody agrees to it. The goals then are measures of our progress towards that strategy.
Now at the organizational level, it is more than likely, given the scope, given the size of the organization, that you'll have multiple objectives and key results that each align towards a part of the strategic direction that you're trying to work through and that are then assigned to or given to a business unit or a product line or some division in the organization.
So we've got our consumer-facing division. They're going to get one OKR, one top-level OKR, and we've got our corporate, our B2B side, and they're going to get a different kind, a different OKR, and then maybe there's a kind of a third party and they're going to get a third OKR. Those three OKRs are going to be the success factors for the strategic direction, and they're going to set the priorities. They're going to help each one of those business units set their priorities for the upcoming six, 12, 18 month cycles that the organization is working in.
Within each one of those business units, we are going to have teams that are working towards those OKRs ideally, in an ideal situation. If each one of those teams has their own OKRs, and it's not always necessary for every team to have their own OKRs, but let's just say for simplicity's sake, if each one of those teams is going to have their own OKRs, one objective and up to three key results makes sense, right?
As I was working with a team today, they had come up with an objective and seven key results. Seven key results. That team is trying to boil the ocean. There's no focus. They have seven P1, seven number one priorities, which means every day they're coming to the office and they're going to choose which six priorities they're not going to work on today, right? And that's a crappy place to be for a team.
And so we want a team to have the smallest possible set of objectives and key results to work on, ideally one objective, no more than three key results to get them going. And look, as the work evolves, as the learning comes in, as the progress comes in, if we have to adjust their goals, that's perfectly okay. It's one of the values of working this way. It's one of the benefits of working this way is that you're not married to these goals for the next 12 to 18 months. If new information comes to light, we can adjust the goals.
Scott Levy:
I really like that. I also like the emphasis on rhythm that you guys place in the book. Anybody who's familiar with me knows that's a big thing, a key for me; what's the operating rhythm? How are we checking in on those? And that idea that you can create real-world agility by actually checking in, how are we doing? Are our beliefs the same? Do we need to adjust course?
It gives you the rhythm to do it, but it gives you clarity and the focus. I actually really do like that idea of three key results quite a lot. You guys have a particular point of view on how, when and whether to cascade OKRs and how they should be done on an individual level. I'd love for you to talk about that a little bit.
Jeff Gothelf:
So a couple of thoughts on that. We define OKRs as a team-based goal-setting framework. And so it's a goal for a team, not for an individual person inside an organization. Now, as we said a second ago, the strategic direction is going to come with a set of OKRs for the whole organization. And that's great.
What we want to then see is teams within that organization determining their own OKRs driven by or constrained by their sphere of influence. So if you think about the customer journey, let's say my team is the authentication team. I'm going to work with my team to define a set of goals, objectives, and key results that are within the organization's sphere of influence, which is the authentication portion of the user journey.
So I'm not going to sign up for revenue goals. I'm not going to sign up... Let's assume it's an e-commerce site for a second, right? I'm not going to sign up for add-to-cart behavior or checkout behavior, right? The world that I control is authentication and we're going to set authentication goals. We're going to create the simplest way to authenticate online to an e-commerce site. And we'll know that by 90 percent reduction in password reset requests by existing customers, et cetera, et cetera. We're looking for those behavior types, right? That's the world.
Now what I have to do there... So we're going to give the teams that autonomy. To say, okay, what can you influence? Come back to me with those goals. And then tell me a compelling story about how that goal ladders up as a leading indicator to the strategic goals, to the overall goals of the organization or the business unit.
So it's not just, "Hey, teams come up with your own goals. Best of luck. Let's hope it works out." We're not gonna... we're going to provide that autonomy, but we're going to require that the team comes back with a compelling story about how refining the authentication or optimizing authentication process leads to more items in the cart, higher checkout value, and then ultimately maybe repeat usage of the product or something along those lines.
I want you to tell me that story. Now you're not committing to those lagging indicators that come after authentication, right? The authentication team isn't committing to revenue goals or basket size goals, average order value, and all that kind of stuff, right? But they're saying if people authenticate more successfully, we would expect to be able to positively impact these things that come after us in the customer journey.
And so the idea here is that no OKR is an orphan, right? Every OKR has a parent or parents that it impacts. And it has children that come before it that are the leading indicators of that particular organization's behavior, that team's behavior. The thing that we want to avoid, and this is where I think organizations get lazy, frankly, is they'll say we set goals at the organizational level and everybody should worry about revenue. So everyone has a revenue goal.
But you're going to end up with folks like the authentication team, or the cybersecurity team or something along those lines. And they're going to say, "I've signed up for revenue goals. I have zero direct impact on revenue." And so the amount of work, the quality of work, the innovation level of the work is going to suffer. So let the teams determine what they want to do, how they want to do it, but they have to connect it to the bigger picture.
Scott Levy:
I like that a lot. There's such an emphasis in the way that you guys have framed this on storytelling, which really is how you improve communication, right? How you help people make sense and see how they fit. And it really nips many of the problems I see in the bud because we can all understand that story. And we're all coming back to the same customer journey one way or another. Even if our customers, somebody internal, like maybe I'm on the RevOps team, maybe it's about the support queue or something. There's a whole variety of ways you can start to tie things back. So everybody does feel connected and does understand how they fit into the larger story. I've seen that be, and as I'm sure you guys did early on as well, such a sticking point.I can come up with this, but to your point how do I really impact revenue? All I can do is X, Y, Z.
Adjusting OKRs and Embracing Agility
Scott Levy:
So when it comes to getting this in place, practically what is the advice? I know this, but for our listeners, because I think everybody should read this book. I think it is a hundred percent required reading if you're running OKRs. Let's say we're off track - because it happens - we guess wrong about something we're halfway through. Our period, maybe it's a quarter, maybe it's a six week sprint, whatever it is, we're off track. What in your experience is the best way to take a look and what's the mindset the team should have? Is it time to throw out the OKRs and just go back to X, Which is what a lot of people do? How do you coach people to have the fortitude to just stick with it and make the next change?
Jeff Gothelf:
It's interesting because if done correctly, the OKRs enable course correction much more easily than other approaches. If we have a goal and we've set it for a quarter, and we're six weeks into it, and it's just not happening, we should pause and reflect. What have we learned? What have we done? What's worked? What hasn't worked? What do we know?
And if we don't know, then we need to go get that information. Going to get that information isn't an admission of failure or a giving up of the process. It simply says we've put a couple of things into the world and they didn't work and we don't know why. And so we've got to go figure out why they didn't work so that the next things we put out into the world stand a better chance of success.
And that process is something that not a lot of organizations do. And those that do, don't often do it particularly well, because it requires leadership. And it requires the teams to publicly admit that they were wrong, that they made a mistake. And in a lot of organizations, that's not acceptable. In some organizations, that's a career-limiting move. And in most organizations, it's just not expected. You're going to tell me what you're going to make. You're going to make it, you're going to ship it, and it's going to work.
And so I think what's nice about this is if you find that your team is off course and you've said, okay, the commitment that you've made is not to the production of a thing, right? Hey, we produced a couple of things and they didn't work. So we're going to figure out why, we're going to go talk to customers. We're going to run some experiments. We're going to do a little bit of research and then we're going to come back and we're going to produce a couple more things that hopefully will be more accurate.
And to me, that is one of the biggest benefits of this way of working. It creates the bandwidth, the slack in the system for course correction, because we haven't specifically committed to a set of deliverables. And as we begin to work in a particular direction, we collect the evidence that says those things that we initially chose to work on aren't working anymore. And so that justifies our course correction.
And to be super clear, changing course based on evidence is agility. That's organizational agility, right? Forget agile with the capital A and the religion and all that. But lowercase a agility is changing course based on evidence. It requires humility. It requires psychological safety. It requires an organization that rewards and incentivizes that. But when you see it happen, it's magic.
I was working with a client earlier this year and there were six teams that we were taking through a process where we said, okay, OKRs, and we began to build. And they went to see what worked and what didn't. And two of the six teams actually killed their projects along the way. They killed their initial initiatives, the things that they were setting out to build, and in doing so they saved the organization over a million dollars.
And initially, they were terrified. They were terrified to tell the organization that they weren't going to build the thing that they were... it was in the name of the team, right? And so it's always an indication of how an organization thinks, right? When there's like the iPhone app team, the iPhone app has to deliver an iPhone app, versus the mobile commerce team, right? It tells you how the teams are named, and these two teams had their feature, their deliverable in their name. And initially they were terrified to tell the organization that it wasn't going to work. But when they tallied up the savings, it was a no-brainer in that situation.
And so if you're going off track, the sooner you can realize it, the better. But if you're halfway through a quarter, you're going off track, pause, reflect. What data do you have about what got you into this situation? What's working, what's not working? And if you don't have the data, take a couple of weeks and go get it.
Take a week and go get it. Talk to customers, run some experiments, do a little bit of research and then come back with a better plan. That's the key to all of this. And it's one of the biggest benefits.
Shifting Focus to Key Results
Scott Levy:
When you're thinking about something like roadmap planning, do you shift the thinking a little more to key results? Like these are the key results we want to get by quarter. Or do you say, hey, here's what we think the roadmap is right now, but based on how well we're doing hitting our OKRs, we're going to adjust it. Any light you can share there?
Jeff Gothelf:
So this is interesting, right? Because roadmaps, traditionally at least, are inherently feature-based, right? They're like, they are Gantt charts in many ways, right? That's exactly what they are. Yeah. We're going to build this thing and it's going to be done on Friday. And it's going to be red and you're going to love it.
Now, if you're going to manage with OKRs, the roadmap has to shift a little bit. First of all, the goals that you're setting for the team isn't a specific set of features. It's a key result, right? So we're going to change behaviors in Q1. We're going to talk, right? Our Q1 focus is customer acquisition. Okay. Our key results are all about acquisition.
In Q2, we're really going to focus on some acquisition and customer activation, like getting to actually use the product. In Q3, we're going to focus on really driving up activation and retaining the customers that we've acquired. And in Q4, we're finally going to really dig into revenue and that's really what we're going to focus on, right? Let's say, hypothetically speaking, right? We're going to look at a year like that. And then on a quarterly basis, we're going to list our hypotheses.
The Role of Hypotheses in Roadmaps
Jeff Gothelf:
Now, what's interesting is a hypothesis is a fancy word for a guess, right? No one likes the word guess. "We're guessing." "No, we're not guessing. It's a disciplined guess." Yeah. A hundred percent. It's a fancy word for guess. But it nevertheless sounds nicer. No one wants to admit that they're guessing at work. But none of us can predict the future. Sadly. And so we're hypothesizing, and by hypothesizing, we're introducing doubt into our ideas. And that doubt is warranted. Because the real world has doubt.
And we're going to list a series of hypotheses on a quarterly basis. Now in Q1, we've got a really great set of ideas that we're working on. And the hypotheses are, they hypothesize that if we build this thing for these people, we will see this behavior change. And that's the really nice part of speaking that vocabulary change here, it says, we believe that if we build this thing for these people, their behavior will change in this way. So if their behavior does not change in that way, we don't have to build that thing anymore, right? Or we have to change the way that we're building it or do something different about it.
And we put those hypotheses into our roadmap and we're saying, look, these are the things that we think might help us get to these key results. And in the first quarter, we've got a pretty good idea of what we're going to work on, maybe in Q2 as well. And as we look further out in time, there's higher, there's less clarity, there's less certainty and there's more risk.
And so the number of guesses, the number of hypotheses that we can put into a roadmap or that we should put into a roadmap three and four quarters out and beyond should drop significantly. Because it's just, it's really wild guesses at that point. And so we talked about check-ins, right, a few minutes ago. We want to do these quarterly check-ins on the roadmap that says, "Hey, we had acquisition goals, key results for Q1. How are we doing? What did we ship from these hypotheses? What did we learn? How are we doing towards the goal? Should we keep going? Should we move on to new goals?"
And so what we're doing is we've got this live planning window. Let's call it two quarters, right? It's about six months that moves forward in time. And updates our roadmap in real time, every quarter with evidence. And that allows us to make better decisions about the upcoming quarter and the one after that. It clarifies the direction that we're heading in.
And so this is where I think roadmaps get a little different. Traditionally, there's less upfront commitment for a longer period of time because it just gets fuzzy out there, right?
Navigating the Fog: A Metaphor for Roadmapping
Jeff Gothelf:
You know when I teach the stuff and I teach roadmapping a lot, I deal with a lot of product managers. The metaphor that I've used for years is a fog, so all of us have hopefully walked through a fog at one point.
It's cool. Or driven through a fog. And you know that if you're walking through a fog, you're not going to go running through that fog full speed for 20, 30, 40 steps because you can't see. You're going to take five steps forward, right? A small batch, a small cycle forward. And as you take those five steps forward, the next five steps are revealed.
If those next five steps are clear, terrific. We're going to go five more steps, not 15 or 20, right? But five more steps, right? Eventually you take those next five steps and an obstacle appears. There's a brick wall, there's a tree, there's a cliff, whatever. And we've got to decide what to do. Are we going right? Are we going left? Are we going back? Are we going over? What are we actually going to do? And we're going to make evidence-based decisions about how to progress.
And that's the same idea here. OKRs give us that framework and that cadence to navigate the fog more successfully with less risk.
Scott Levy:
I like that it also focuses you. It focuses what you target because so many folks in product, I think we've all been guilty of it at one point or another, you just want to go build that thing you think is cool. So, just give me the time to build that and that's what my Gantt charts are going to show, versus, what's the result we need to try to get? And what are our hypotheses for how we get that result? It's a fundamental shift that I think people - even people who appreciate intellectually - I see often don't make. So many times, I've talked people through coaching and OKR sessions. They're like, okay, yeah, but can we talk about the roadmap now? Because I need to commit to the roadmap. It’s like, yeah, but here's the thing, right? You have to get the outcome.
Jeff Gothelf:
It's amazing how often those commitments that we've made in the past are wrong and we know it. And yet we still have to do it. And it's frustrating to say the least.
Scott Levy:
I’ll plug another friend of mine's book. Dr. Rebecca Humphries has a book called Survive, Reset, Thrive. She lays out this idea of a belief tracker and the idea is if you will list the beliefs that you have, you can start to evaluate how they're tracking, so that you at least are recognizing and you're you're educating your stakeholders on there's some assumptions built in here We're not calling them assumptions. They are beliefs. We're gonna make the best decision we can with the information we have, but now you've got a little grid you can use when the situation changes, or hey, we thought that by doing this feature, we were going to get this output or this outcome, and we didn't get it.
We didn't get a higher adoption rate or a higher sale rate or whatever the case might be. Now, at least with that dialogue, you're surfacing the unknowns and building a learning organization versus if you're not, your career is highly limited.
The Importance of Humility in Leadership
Jeff Gothelf:
And look, it comes down to a word here that we mentioned in the book and I've talked about for years: humility. Humility is in such short supply, particularly as an organization gets larger and larger. And I think it's just because the word is misunderstood. Humility is not an abdication of leadership. It's not an abdication of vision or guidance or direction. It's simply when evidence contradicts your strong opinions, when we've collected evidence that contradicts your strong opinions, you're willing to change your mind.
That's really it. And it is so powerful when leaders demonstrate that, when they model that behavior for their teams, because it says to the organization, it's okay. It's okay to be wrong. It's okay to learn. It's okay to change course. And that's when this idea of OKRs really takes root. When teams feel comfortable learning, adjusting, changing course, and they don't feel like their careers are threatened by that same activity, that's when the stuff really lands.
Scott Levy:
As you guys laid out with lovely charts, you start to say no to things that aren't valuable and there's so much data collected on how high performers are great at saying no and choosing what to say no to. And here's a decision framework. If it's not supporting the OKR, stop doing it.
I can't remember what the three things were, but there was: keep doing it if it's supporting the key result. If it's clearly not, stop doing it. I can't remember what, how did you guys phrase the middle? Maybe it's kill, pivot, persevere.
Jeff Gothelf:
Yeah. So kill the idea, pivot on the idea - maintain the idea but change the execution tactics - or persevere, keep going.
Scott Levy:
Very nice. So again, talking about how these make their way down, I want to make sure we hit this because they make their way all the way down to the individual contributor level.
If you're thinking about the customer journey and how everyone on the team, in one way, shape, or form, is touching that customer journey, everybody in the organization, every department can frame a set of objectives with key results, because we're always focused on that versus saying, "I just have to."
I know people talk about making sure the trains run on time, and I get there's always some activities that are like that. But if we start thinking about what that does to the person's experience, that could be a key result. We could have a key result to have fewer late trains, for example, or other outcomes like that.
Are there some... I guess I'll ask, what has surprised you most about the response to the book?
Jeff Gothelf:
I think, look, so far the response is just coming in. The book's been out six, seven weeks at this point, and so people are just getting through it. Generally speaking, it's been very positive.
There was one response that we got from an influential thought leader in the space who we reached out to for a praise blurb, which is a silly way of saying, "Say something nice about my book that I can print inside the book." And all authors do this. You reach out to your friends, your colleagues, and industry luminaries, and you hope that they'll say something nice about the book and you can put it in the book, and it adds to your credibility, right?
We reached out to this one influential thought leader in the space, and the feedback that came back from this person was interesting. They said, "I didn't get very far in the book." This is the one piece of feedback that surprised me so far. They said, "I didn't get very far in the book. I read the intro and I got put off by the heavy customer-centric framing of your ideas. Interesting."
And the feedback continued. It said, "It's deceptively simple and potentially dangerous to solve strictly for the customer. You have to solve for the business as well. Oftentimes, in this person's opinion, solving for the customer was actually pretty easy, and solving for the business was a lot harder."
I have to tell you, that really surprised me both knowing who this person was and it got me thinking, did we miss a beat? Did we miss a connection here? It's unfortunate that this person didn't read the rest of the book because I do believe that we draw that connection very clearly. And I can paint that picture here.
We've talked about KPL. We've talked about organizational success metrics at the top, right? For the company. And we've talked a lot about the output, the stuff that the company creates. If you think about that as a chart, we've got the success metrics for the business at the top. We've got outputs at the bottom, the stuff that we make. In between that are the outcomes. So in between making stuff and making money is customer behavior, is human behavior, right? What are people doing?
Customer Success Equals Business Success
Jeff Gothelf:
And the only way for us to achieve our business goals is to make sure that our customers achieve their unique goals, right? If we make our customers successful, they will continue to use our products and services.
Now, we have to be honest about who our customers are because there's a difference between a customer and a user, right? If you think about an ecosystem like Facebook, for example, their customers are advertisers. That's the customer. The user is the individual who's posting media up there.
As long as you're honest about your ecosystem and who your customers are, and you're optimizing the product and the system for your customer's success, your business will thrive, right? There's a direct connection. If you optimize negatively against the success of your customers, the odds of your business succeeding are pretty low, right? You might be in a situation where you're the only game in town and they have to use you, but otherwise, there's plenty of competition in most industries.
To me, that was a really surprising bit of feedback again because I don't feel like we missed that in the book. I feel strongly that there is a direct connection between customer success and business success. I think if you break customer success, it's going to be really hard to drive business success.
Scott Levy:
I'd agree with that. And the oxygen mask theory, if you're not sustaining a healthy business, you're not going to be able to serve that customer. So there's a little bit built in there for sure.
Implementing OKRs Across Industries
Jeff Gothelf: I will add this, and I think this is interesting. We've talked a lot about what OKRs are and how they fit into the culture. One of the things that I hope folks take away from the book and from this conversation is that when you set goals with OKRs, there are no features or solutions in the goal.
What's interesting about that is that if you spend the time to do this right, and you get to a point where your organization has a set of well-written OKRs that are focused strictly on customer behavior, on human behavior, on outcomes as the goal, your teams are going to go to work the next day and look at each other and say, "What am I supposed to work on?" Usually, somebody tells them, right? So somebody says, "Hey, here's what you got to build for the next three, six, nine, twelve months," and that's going to be missing.
So if you're a leader and you're considering OKRs, the next step is to think about what happens next. Not just implementing the OKRs, but once they're in place, how will your team know how to determine what to work on, right? Do they know how to brainstorm? It sounds silly, but do they know how to do it effectively? Do they know how to form hypotheses? Do they know how to test those hypotheses to make sure that they know exactly what to build and how to build it? Those activities happen, but a lot of organizations have teams that don't know how to do this work. Some organizations have teams that know how to do this work but don't allow it to happen as well.
So just make sure that you're thinking about what happens next once the OKRs are in place because there's going to be a lot of that. Usually, we just tell them what to do, and they do it. And now you've got teams that have to figure out what they're going to do. You've got middle management who are going to look around and say, "Usually, I tell the teams what to do, but right now, I'm not sure what to do with that." And there's a whole conversation to be had there about how to adjust what they're doing as well.
Scott Levy: And it really forces engagement, right? Because you don't get to say, "Just tell me what to do." You've got to think. You've got to come up with how we are going to do it. And we're using a bit of a product metaphor right now. This applies. We've got real estate companies on our platforms where it still applies. You can be in charge of leasing or some aspect of a different property. You can still think in this way because you're going after the result, and you'll need to brainstorm and try different things to produce that result, whether it's a product feature or not. Go ahead.
Jeff Gothelf: Yeah, this works across industries, right? One of the key concepts in the book is that everybody has a customer.
Now, if you make a thing that is consumed by the end consumer, that's an obvious statement to you, right? But if you're building a tool that gets used by somebody who then presents it to their customer or whatever it is, everybody goes to work and everybody makes something at work. It can be a budget, a policy, a campaign, or something along those lines. It doesn't have to be a product, right? It could be an internal tool. And there's a human at some point that consumes that thing.
So your job is to understand that human, understand what they're trying to achieve, and then use that insight to make the thing that you create better as determined by making that person more successful.