Individual OKRs turn into scorecards. Spotify dropped them in 2013 over the cost, and Rick Klau, who set off the OKR boom, said to skip them in 2017. We arrived at the same place only after ours had become scorecards.
#Where OKRs Came From and How They Spread
OKRs (Objectives and Key Results) are a goal-setting method Andy Grove devised at Intel in the 1970s and laid out in High Output Management. The core idea is simple: “Where do I want to go?” (Objective) and “How will I know I’m getting there?” (Key Results). Grounding goals in measurable results points the whole organization the same way.
The boom started in 1999, when John Doerr introduced OKRs to early Google. LinkedIn, Twitter, Uber, and Spotify followed suit, and OKRs became the standard management method in Silicon Valley. What poured fuel on it was a 2012 workshop.
Rick Klau of Google Ventures gave a talk introducing OKRs to startups that passed one million views and became the textbook for countless companies. In it he said to run OKRs at all three levels, company, team, and individual, and many companies did exactly that.
#The Companies That Dropped Individual OKRs
#Spotify’s Experience
Spotify dropped individual OKRs in 2013 and explained why on its HR blog in 2016.
“OKRs work well on a corporate level… But our corporate level is very nimble. So our objectives change fast and adapting iterated OKRs on multiple levels all the way to the individual consumed time and energy that we just couldn’t afford.”
There were three reasons. First, as the quote says, the cost of cascading down to the individual level. Second, OKRs pushed people to focus on how, when what Spotify needed to hold on to was why. Third, where direction changes often, the inputs used to write the OKRs were stale by the time they were written. Shit in, shit out.
#Klau’s Self-Correction
A year after the Spotify post, in 2017, Klau, who made that video, quietly reversed his position on Twitter. “Skip individual OKRs altogether.” For small young companies they’re redundant, he said, so focus on company and team OKRs.
Spotify figured it out in the field first, and Klau himself arrived at the same conclusion. The problem Klau pointed to arises the moment OKRs double as performance evaluation. OKRs exist to set ambitious goals, but once they’re tied to evaluation, people start setting only goals they can hit. The worry that OKRs might feed into performance reviews turns moonshots into ordinary targets.
Klau nailed it down once more in a 2022 blog post. Teams adopting OKRs for the first time, or still getting used to them, should ignore individual OKRs, and even after they’ve seen team-level OKRs align the organization, individual OKRs should stay optional.
#We Fell into the Same Trap
This isn’t a Big Tech story alone. My own ten years in startups went the same way.
In a leadership role I lived through the adoption of individual OKRs. What we should have settled first was the direction of the company, the projects, and the teams. We started setting individual goals before any of that was sorted out.
With direction blurry, OKRs degraded into an evaluation tool. Not something that drove the organization’s growth, but a way to measure how hard someone had worked that quarter. It was exactly the trap Klau warned about.
In a startup, a quarter is a unit of survival. While each person spent time designing, aligning, and scoring their OKRs, the market moved and competitors shipped new features. Spotify’s “shit in, shit out” applied to us as it was. Individual OKRs set against a blurry direction were already out of step with reality by mid-quarter, and holding on to them became a burden.
A startup’s problems can’t be solved alone. One good feature takes product, design, and engineering locking together.
Individual OKRs turn people’s attention away from that collaboration and toward personal results. At the moment a team needs to create explosive growth together, everyone is tending their own numbers.
That’s when our team noticed the problem. We judged that focusing on the company’s growth made more sense than spending limited resources on an individual evaluation process.
We couldn’t remove individual OKRs entirely, but we cut them to a minimum. The resources we saved went into the product and the team. Team OKRs set the direction, and execution was left to each person to define the problem, form a hypothesis, and move. What Big Tech ran for years before dropping, we went through in far less time. After we changed direction, the company went on to take first place in its domestic market. That isn’t something OKRs alone explain, but it’s a fact that the time we’d spent filling in individual scorecards every quarter went into the product instead.
#Individuals Own Initiatives
Dropping individual OKRs doesn’t mean expecting nothing from individuals. It means focusing on what OKRs were for in the first place, the thing we got excited about.
Individuals don’t “have” their own OKRs. They own initiatives under the team OKRs, and that is what keeps OKRs an alignment tool. An individual’s contribution shows up in the team’s KRs, and personal growth and evaluation are handled apart from OKRs, through one-on-ones and performance reviews.
OKRs are a tool for pointing the organization’s attention in one direction, not for measuring individual performance precisely. Initiative ownership falls back into the same trap unless it’s kept apart from evaluation. Focus and check, simply and fast. That is the original value of OKRs. The market won’t wait for us while we waste it on the wrong purpose.
#References
- How Google sets goals: OKRs, Rick Klau, GV Library, 2013. The record of the fall 2012 workshop talk that introduced Google’s way of running OKRs to startups; the video and post went public in May 2013.
- Why individual OKRs don’t work for us, Spotify HR Blog, 2016. Explains why Spotify dropped individual OKRs.
- Skip individual OKRs altogether, Rick Klau, Twitter, 2017. Says small young companies should skip individual OKRs and focus on company and team OKRs.
- Set goals with OKRs, Google re:Work. Google’s guide to how it runs OKRs.
- What my OKRs video got wrong, Rick Klau, 2022. Says teams new to OKRs should ignore individual OKRs and keep them optional even later.