Contents
Zero point seven. In most companies, that would be a mediocre grade. In the logic of OKRs, it is the normal result for an ambitious goal. Anyone who always hits a perfect score has aimed too low. This small rule reveals a great deal about what a scoreboard is for. The team principle behind it says: only a team that knows where it stands can adjust course. An example of the Team Principle of the Scoreboard.
From Intel to Google
Situation
In the 1970s, Andrew Grove introduced a goal-setting system at Intel. It was first called “iMBOs,” for Intel Management by Objectives. Grove described it in his 1983 book “High Output Management.” John Doerr joined Intel in 1974 and learned the system in 1975 in a course taught by Grove. In 1980 he moved to the venture capital firm Kleiner Perkins. Later, as an investor in Google, he introduced the method there in 1999 – under the name OKR, Objectives and Key Results. It quickly became a core part of Google’s culture. In 2018 Doerr published a book about it, “Measure What Matters.”
Connection to the team principle
A scoreboard is not a force of nature. Someone has to decide what gets counted and teach it to the team. Grove did that at Intel, and Doerr carried it further. The method has traveled for decades because it answers a simple question every team asks itself: How can we tell whether we are making progress?
Goal and Measure Are Two Different Things
Situation
An OKR has two parts. The “objective” describes what is to be achieved. A few measurable “key results” show whether you are getting there. Key results are scored on a scale from 0.0 to 1.0.
Connection to the team principle
The separation is the heart of it. The objective sets the direction. The key results are the scoreboard. Without an objective, the team does not know where it wants to go. Without measures, it does not know how far it has come. The word “few” matters. Nobody reads a scoreboard with thirty numbers on it. If you want to adjust course, you need a score the team can grasp at a glance.
The 0.7 Rule
Situation
OKRs distinguish between two kinds of key results. For committed key results, 1.0 is expected. For aspirational ones, 0.7 counts as the normal target. A success rate of around 70% is intended.
Connection to the team principle
This rule protects the scoreboard from sugarcoating. If 0.7 counts as good, a team can report a 0.5 openly. Then it asks: What was missing, and what do we change? The score is there for adjusting course, not for settling scores. At the same time, distinguishing between the two kinds keeps the system from becoming arbitrary. For a commitment to a customer, 70% is not enough. So the team has to clarify in advance which number is a commitment and which is a stretch goal.
When the Number Becomes a Report Card
Situation
Two criticisms come up often. First, OKRs set for individuals easily turn into to-do lists and get mixed up with performance appraisals. Second, cascading OKRs from the top down through many levels creates a rigid waterfall process. That defeats the purpose of the method.
Connection to the team principle
This is where the limit lies. As soon as pay or promotion depends on the score, what gets reported changes. The numbers become more cautious, the goals smaller. That fits a long-standing research finding. In a large 1996 meta-analysis, Avraham N. Kluger and Angelo DeNisi analyzed 607 effect sizes. On average, feedback improved performance. But in more than a third of cases, performance dropped after feedback. This happened above all when the feedback shifted attention away from the task and toward the person. So a scoreboard does not help automatically. It helps when it shows the team what needs to be done about the task. It does harm when it mainly shows who looks bad.
What Is Proven and What Is Not
Situation
The effect of OKRs themselves has barely been studied independently. What is well documented is the effect of progress monitoring in general. In a 2016 meta-analysis, Benjamin Harkin and colleagues analyzed 138 experiments. People who were prompted to monitor their progress reached their goals more often. The effect was larger when progress was recorded in writing or made public.
Connection to the team principle
The finding fits the practice of writing down the score and displaying it to the team. But it comes with a caveat: the studies looked at individuals, not teams. For OKRs, this means the idea stands on solid ground. It has not been shown that this particular method works better than others.
Key takeaways
Key Lessons
- Separate the goal from the measure. Spell out what you and your team want to achieve, and pick a few numbers that will tell you when you have.
- Clarify in advance what is a commitment and what is a stretch goal. For a commitment, 1.0 is what counts; for a stretch goal, 0.7 is a good result.
- Look at the score regularly, and do it together. Write it down and make it visible to the team.
- Keep the scoreboard out of individual performance appraisals. Otherwise you’ll get flattering numbers instead of honest ones.
- Ask of every number: What does it tell us about the task? What will we do differently now?
Summary
Andrew Grove introduced a goal-setting system at Intel, and John Doerr brought it to Google in 1999 as OKR. It separates the objective from the measures and scores the latter on a scale from 0.0 to 1.0. For ambitious goals, 0.7 counts as normal. This keeps the score honest and makes it useful for adjusting course. The criticism and the research show the flip side: once the number becomes a verdict on people, it gets massaged, and feedback can even lower performance. The Team Principle of the Scoreboard therefore needs both: a clear scoreboard and a way of using it that stays focused on the task.