Why the secret to success is setting the right goals

Our leaders and institutions are failing us, but it's not always because they're bad or unethical, says venture capitalist John Doerr -- often, it's simply because they're leading us toward the wrong objectives. In this practical talk, Doerr shows us how we can get back on track with "Objectives and Key Results," or OKRs -- a goal-setting system that's been employed by the likes of Google, Intel and Bono to set and execute on audacious goals. Learn more about how setting the right goals can mean the difference between success and failure -- and how we can use OKRs to hold our leaders and ourselves accountable.

We're at a critical moment.

Our leaders,

some of our great institutions

are failing us.

Why?

In some cases, it's because they're bad

or unethical,

but often, they've taken us
to the wrong objectives.

And this is unacceptable.

This has to stop.

How are we going to correct these wrongs?

How are we going
to choose the right course?

It's not going to be easy.

For years, I've worked with talented teams

and they've chosen the right objectives
and the wrong objectives.

Many have succeeded,
others of them have failed.

And today I'm going to share with you

what really makes a difference --

that's what's crucial,

how and why

they set meaningful and audacious goals,

the right goals for the right reasons.

Let's go back to 1975.

Yep, this is me.

I've got a lot to learn,
I'm a computer engineer,

I've got long hair,

but I'm working under Andy Grove,

who's been called the greatest manager
of his or any other era.

Andy was a superb leader
and also a teacher,

and he said to me, "John,
it almost doesn't matter what you know.

Execution is what matters the most."

And so Andy invented a system
called "Objectives and Key Results."

It kind of rolls off
the tongue, doesn't it?

And it's all about excellent execution.

So here's a classic video from the 1970s

of professor Andy Grove.

(Video) Andy Grove: The two key phrases
of the management by objective systems

are the objectives and the key results,
and they match the two purposes.

The objective is the direction.

The key results have to be measured,

but at the end you can look
and without any argument say,

"Did I do that, or did I not do that?"
Yes. No. Simple.

John Doerr: That's Andy.

Yes. No. Simple.

Objectives and Key Results,

or OKRs,

are a simple goal-setting system

and they work for organizations,
they work for teams,

they even work for individuals.

The objectives are what
you want to have accomplished.

The key results are how
I'm going to get that done.

Objectives. Key results.

What and how.

But here's the truth:

many of us are setting goals wrong,

and most of us
are not setting goals at all.

A lot of organizations
set objectives and meet them.

They ship their sales,
they introduce their new products,

they make their numbers,

but they lack a sense of purpose
to inspire their teams.

So how do you set
these goals the right way?

First, you must answer
the question, "Why?"

Why?

Because truly transformational teams

combine their ambitions
to their passion and to their purpose,

and they develop a clear
and compelling sense of why.

I want to tell you a story.

I work with a remarkable entrepreneur.

Her name is Jini Kim.

She runs a company called Nuna.

Nuna is a health care data company.

And when Nuna was founded,

they used data to serve the health needs
of lots of workers at large companies.

And then two years
into the company's life,

the federal government issued a proposal

to build the first ever
cloud database for Medicaid.

Now, you'll remember
that Medicaid is that program

that serves 70 million Americans,

our poor, our children

and people with disabilities.

Nuna at the time was just 15 people

and this database
had to be built in one year,

and they had a whole set of commitments
that they had to honor,

and frankly, they weren't going to make
very much money on the project.

This was a bet-your-company moment,

and Jini seized it.

She jumped at the opportunity.
She did not flinch.

Why?

Well, it's a personal why.

Jini's younger brother Kimong has autism.

And when he was seven,

he had his first grand mal seizure

at Disneyland.

He fell to the ground.
He stopped breathing.

Jini's parents are Korean immigrants.

They came to the country
with limited resources

speaking little English,

so it was up to Jini
to enroll her family in Medicaid.

She was nine years old.

That moment defined her mission,

and that mission became her company,

and that company bid on, won
and delivered on that contract.

Here's Jini to tell you why.

(Video) Jini Kim: Medicaid
saved my family from bankruptcy,

and today it provides for Kimong's health
and for millions of others.

Nuna is my love letter to Medicaid.

Every row of data is a life

whose story deserves
to be told with dignity.

JD: And Jini's story tells us

that a compelling sense of why
can be the launchpad for our objectives.

Remember, that's what
we want to have accomplished.

And objectives are significant,

they're action-oriented,

they are inspiring,

and they're a kind of vaccine
against fuzzy thinking.

You think a rockstar

would be an unlikely user
of Objectives and Key Results,

but for years, Bono has used OKRs

to wage a global war
against poverty and disease,

and his ONE organization
has focused on two really gorgeous,

audacious objectives.

The first is debt relief

for the poorest countries in the world.

The next is universal access
to anti-HIV drugs.

Now, why are these good objectives?

Let's go back to our checklist.

Significant? Check. Concrete? Yes.

Action-oriented? Yes.

Inspirational?

Well, let's just listen to Bono.

(Video) Bono: So you're passionate?

How passionate?

What actions does your passion
lead you to do?

If the heart doesn't find
a perfect rhyme with the head,

then your passion means nothing.

The OKR framework cultivates the madness,

the chemistry contained inside it.

It gives us an environment for risk,

for trust,

where failing is not a fireable offense.

And when you have that sort
of structure and environment

and the right people,

magic is around the corner.

JD: I love that.

OKRs cultivate the madness,

and magic is right around the corner.

This is perfect.

So with Jini we've covered the whys,

with Bono the whats of goal-setting.

Let's turn our attention to the hows.

Remember, the hows are the key results.

That's how we meet our objectives.

And good results
are specific and time-bound.

They're aggressive but realistic.

They're measurable,
and they're verifiable.

Those are good key results.

In 1999, I introduced OKRs
to Google's cofounders,

Larry and Sergey.

Here they are,
24 years old in their garage.

And Sergey enthusiastically
said he'd adopt them.

Well, not quite.

What he really said was,

"We don't have any other way
to manage this company,

so we'll give it a go."

(Laughter)

And I took that as a kind of endorsement.

But every quarter since then,

every Googler has written down
her objectives and her key results.

They've graded them,

and they've published them
for everyone to see.

And these are not used
for bonuses or for promotions.

They're set aside.

They're used for a higher purpose,

and that's to get collective commitment

to truly stretch goals.

In 2008, a Googler, Sundar Pichai,
took on an objective

which was to build
the next generation client platform

for the future of web applications --

in other words, build the best browser.

He was very thoughtful
about how he chose his key results.

How do you measure the best browser?

It could be ad clicks or engagement.

No. He said: numbers of users,

because users are going to decide

if Chrome is a great browser or not.

So he had this one
three-year-long objective:

build the best browser.

And then every year
he stuck to the same key results,

numbers of users, but he upped the ante.

In the first year,
his goal was 20 million users

and he missed it.

He got less than 10.

Second year, he raised
the bar to 50 million.

He got to 37 million users.

Somewhat better.

In the third year,

he upped the ante once more
to a hundred million.

He launched an aggressive
marketing campaign,

broader distribution,
improved the technology, and kaboom!

He got 111 million users.

Here's why I like this story,

not so much for the happy ending,

but it shows someone
carefully choosing the right objective

and then sticking to it
year after year after year.

It's a perfect story for a nerd like me.

Now, I think of OKRs
as transparent vessels

that are made from the whats
and hows of our ambitions.

What really matters is the why
that we pour into those vessels.

That's why we do our work.

OKRs are not a silver bullet.

They're not going to be
a substitute for a strong culture

or for stronger leadership,

but when those fundamentals are in place,
they can take you to the mountaintop.

I want you to think
about your life for a moment.

Do you have the right metrics?

Take time to write down your values,

your objectives and your key results.

Do it today.

If you'd like some feedback on them,
you can send them to me.

I'm [e-mail].

If we think of the world-changing goals

of an Intel, of a Nuna, of Bono,

of Google,

they're remarkable:

ubiquitous computing,

affordable health care,
high-quality for everyone,

ending global poverty,

access to all the world's information.

Here's the deal:

every one of those goals
is powered today by OKRs.

Now, I've been called
the Johnny Appleseed of OKRs

for spreading the good gospel
according to Andy Grove,

but I want you
to join me in this movement.

Let's fight for what it is
that really matters,

because we can take OKRs
beyond our businesses.

We can take them to our families,

to our schools,

even to our governments.

We can hold those governments accountable.

We can transform those informations.

We can get back on the right track

if we can and do measure
what really matters.

Thank you.

(Applause)