S1E10: OKRs

Show Notes

Summary

When Mathias first introduced OKRs at his company, he wanted clearer priorities, more visibility, and a stronger sense of progress. Working with his coach helped him see something underneath that desire: his own impatience and discomfort with losing sight of everyone's work as the company grew. A new framework couldn't do the work of leadership for him.

In this episode of The Intentional Organization Podcast, Mathias Meyer and Sara Hicks revisit their experiences with objectives and key results, from goals handed down by executives to metrics that made little sense for the teams expected to deliver them. They explore why OKRs struggle when strategy is unclear or trust is low, and how making work visible can slip into monitoring and control.

The conversation covers Goodhart's Law, the cobra effect, and the unintended consequences of incentives, with examples from sales targets, customer churn, and quarterly discounts. Sara and Mathias discuss the difficulty of measuring culture, relationships, and learning; the friction of competing goals across teams; and why involving people in setting goals matters. They also look back at management by objectives, Andy Grove's approach to planning, and the temptation to copy a successful company's framework without understanding its context.

Their practical starting point is simple: clarify the direction of the business, pick a few shared priorities, and agree on how to assess progress. Start small, review honestly, and use what you learn to adjust. They close with personal updates on yoga, handstand practice, Obsidian, and a red lentil coconut curry soup, plus a hint of a future conversation about OKRs.

Keywords

OKRs, objectives and key results, goal setting, strategy, leadership, trust, workplace culture, incentives, Goodhart's Law, cobra effect, metrics, cross-team collaboration

Takeaways

• Before introducing a framework, ask what problem you're trying to solve and whether your own need for visibility or urgency is driving the decision.

• OKRs can't substitute for a clear strategy, a shared mission, or trust within a team.

• Making work visible can help people coordinate, but using metrics as a means of control can turn planning into a compliance exercise.

• Targets and financial incentives can encourage people to optimize a number at the expense of the outcome you actually want.

• Set goals with the people who will work toward them, including a conversation about the support and resources they need.

• Lagging indicators such as churn and revenue don't always tell a team what it can directly influence or what to change next.

• Discuss dependencies across teams before committing to goals. Separate departmental targets can create competing priorities and leave essential work unsupported.

• Culture, relationships, and learning matter even when they don't fit neatly into a measurable key result.

• Using OKRs to judge individual performance can encourage sandbagging and obscure the conditions affecting someone's work.

• Start with two or three priorities, agree on a review period, and learn from what happens. You don't have to call them OKRs to make them useful.

Resources mentioned

• High Output Management by Andrew S. Grove

• W. Edwards Deming's 14 Points for Management

• Goodhart's Law and the cobra effect

• Research on unintended consequences

• Background on cargo cults

• S1E7: Business Lingo, Ambiguity, Exclusion, and Cults

Chapters

00:00 The Frustration of Disjointed Priorities

02:57 Introduction to OKRs and Directional Frameworks

06:51 The Basics of Cascading Goals

08:05 Personal Experiences with OKRs

09:49 The Role of Culture and Trust in OKRs

11:18 Visibility and Legibility in Work

12:51 Incentives and the Cobra Effect

16:08 Understanding OKRs: Objectives and Key Results

19:05 Stretch Goals and Motivation

21:13 The Importance of Joint Goal Setting

22:11 Lagging Indicators and Cross-Team Dependencies

28:24 The Historical Context of OKRs

35:16 Identifying Problems with OKRs

40:19 Finding Value in OKRs

43:09 Personal Reflections and Future Directions

Transcript

Mathias (00:00) I remember the first time I wanted to implement OKRs in my team. I was frustrated by the lack of progress and the disjointed priorities across our teams, at least as I perceived them. Priorities weren't communicated clearly, so I was equally frustrated that I didn't know what each team was working on and what they had achieved. I wanted more visibility and I wanted a sense of progress. At least

I wanted those things for myself. At that point, we had some 50 people in the company. Losing sight of what each is working on is a normal thing to happen at that stage. But I didn't know that. I wanted to solve that problem, create more visibility and a sense of progress. I believe the word I used with my coach back then was that I needed to feel a sense of urgency in my teams.

She challenged that notion and asked what's underneath all that. Eventually it was clear that it was impatience that I was feeling. I was the one struggling with the growth of the company and lack of visibility. I was also struggling to put in place the tools my team needed to make good decisions and to make solid progress.

I did what many of my clients have done as well. I turned towards an industry standard framework that had just emerged. I implemented OKRs. Turning to a framework, especially when it's this hyped, seems so normal. Everyone else is using it and is successful in doing so. Clearly, it must also work for us. The classic trap of any industry hype.

Is that every company feels like they have to do it too. And when it does fail, the only thing to blame is the process, the framework, and that it doesn't fit for us. It only took a few months for me to figure out what the true work of getting a team moving is, and that it doesn't start with implementing a framework. It starts with myself.

It starts with reflecting on where the impatience is coming from, and then doing the work of management and leadership. Provide clear direction and then let the teams get to work without having to feel like I constantly need to be updated on progress. It's the work of letting go that comes first. In this episode, Sara and I talk about our history of using OKRs and similar frameworks in the past.

how we fail to implement them, and what we learn from those experiences. We share what we teach our clients these days and what we think of adopting frameworks to the letter.

Mathias Meyer (02:57) Well, today we're talking about OKRs and maybe touch on a few other, as I like to call them, directional frameworks.

Sara Hicks (03:05) Okay.

Mathias Meyer (03:09) Back on for this maybe, like at a certain point, like at many companies growth cycle, maybe also specifically talking about the clients that we work with or maybe our own experiences from being founders and executives.

Sara Hicks (03:19) think

Mathias Meyer (03:23) There comes a point when you slash the founder of the executive find yourself frustrated that while either things aren't moving fast enough or not moving at all, or they're moving in what you perceive to be the wrong direction, or people just work in entirely different directions,

Sara Hicks (03:26) a good

Mathias Meyer (03:41) completely disjointed or at least appearing so, everybody still has makes their own.

somewhat semi-rational decision making. But to you as the leader, seems like nobody is aligned.

And so you have, you know, something like OKRs, which stands for Objectives and Key Results. One of the great acronyms of our time.

you know, smaller companies start throwing OKRs at this particular problem, hoping that this will automatically solve the alignment issues. And at larger companies, which I've also seen happen, strategy consultants are brought in. They spend months building a strategy and, you know, creating maybe even their own framework that's probably built on top of OKRs or something similar.

And then turning that into practice at the company. know, creating structures where maybe not everybody in the

company is bought in, let alone brought in to build them. Just feels like imposed from the outside. And boom, you've got OKRs at a company.

just seems like a recipe for failure in some way, especially when a structure like this is imposed from the outside and yet happens over and over again. And for startups, they will probably find that, that OKRs don't solve an alignment issue. OKRs themselves don't solve the question of where do we want to take this company?

even

though, mean, they do provide a direction, but ideally that direction ties into something that's even larger. And so that's what we're talking about today. We're not going to dive specifically into like implementing the framework because I in some way it is, it's sillily simple.

to implement it, even though it takes a lot of work. But the framework isn't hard. Like we're going to get to that. And there's plenty of books on the topic, some promising the world to you and, you know, great success similar the great tech companies of our time. We're just,

you know, interested maybe in OKRs as, you know, what have our experiences been trying to implement them? What are the challenges of

Sara Hicks (05:45) Okay. .

Mathias Meyer (05:50) you know, trying to implement them. What are the problems with them? Where did they come from historically? And where could we go in the whole big world of setting directions as everything is more automated using AI?

Yeah.

Sara Hicks (06:08) things for us to potentially, a lot of avenues for us to go down.

Mathias Meyer (06:13) Lots of avenues, I mean, there's plenty of other frameworks like this, Management by Objectives, and then KPIs came along. But at the core of these frameworks are very, very similar. Like this, they just have different names.

in slightly different ways maybe of implementing them. at the surface, there's a couple of goals that ideally tie into larger organizational goals. And then you have numbers attached to them of where you would like to move them as time progresses, whether that's a quarter or a year, but that's pretty much it.

So on that note, we can end this episode now.

Sara Hicks (06:51) couple of ideas came to my mind. One is we should maybe touch a little bit more on the history of OKRs and just

Mathias Meyer (06:57) Hmm

Sara Hicks (06:58) how they proliferated, especially in tech, and kind of just a little bit of background there. And then the second thing that might be interesting for us to talk about

where you were just talking, is kind of what even are they? Like, you know, just the sort of basics, like you're saying, like company sets itself some of these goals, these bigger objectives for the year. I've been part of this planning. I'm sure you've been part of, you know, this broader planning. And then I've seen it then broken down quarter by quarter and then each quarter,

The departments then break it down to individual teams and then actually down to often individuals. supposed to be this sort of cascade of goals that all package up nicely to, you know, this strategy and these objectives. But as you point out,

I've seen these implemented so many times where there's not a clear strategy. And so

Mathias Meyer (07:51) Hmm.

Sara Hicks (07:52) then these objectives are trying to solve almost too much.

Mathias Meyer (07:56) Yeah.

Sara Hicks (07:57) Anyway, I was going down that path. I think we can talk a little bit about what are these and And then also maybe we should back up first and talk history a little bit.

Mathias Meyer (08:05) before we do that, I mean,

I don't want to generalize too much, but I think there is something where from above, you just imagine that magically the problems will go away. Right? Like you just need this one thing,

and that's going to solve all of your problems. And I think we fell somewhat

Sara Hicks (08:24) that.

Mathias Meyer (08:24) into that same trap. And even worse, maybe we dictated the numbers like,

to the letter, like very specifically distributing them per department. And then I got stuck trying to

Sara Hicks (08:38) We did.

Mathias Meyer (08:39) figure out like what were, what are engineering KPI supposed to be like? What's the engineering team

Sara Hicks (08:44) right.

Mathias Meyer (08:46) delivering on or what is it responsible for that is measurable, which is, inherently not an easy thing to figure out.

I think I like that in the end, like we relatively quickly came around and say, agreeing like this is garbage. Like we, as you said, we actually need to higher than this and talk about what our

Sara Hicks (09:05) Yeah.

Mathias Meyer (09:07) strategy actually is.

Sara Hicks (09:09) Yeah.

Mathias Meyer (09:08) And I think my personal

memories go back further than that, like trying to implement OKR specifically from the top down, so to speak, at my company and just, you know, imagining again, I can shepherd the herd into the, into the same direction.

That's how I pictured it. a wonderful hubris to this assumption that you seem to only get when sit up top and have just your rose colored glasses on without understanding the reality wall of everybody else. like the undercurrent under all of this is still

like dreaming something up and imagining that, there's an easy solution for misalignment.

Sara Hicks (09:49) that made me think of a couple things. One is just kind of the irony that I've experienced and you were just talking about is that the companies where OKRs tend to work best are usually the ones that need them the least.

Mathias Meyer (10:06) Hmm.

Sara Hicks (10:07) So meaning they're the ones that already have

of a strong culture or already have a clear strategy or already have a clear mission or already at let's say buzzword product market fit or already have high trust within the team

and it's because those environments there's already process people know how to engage with the process it's familiar

in organizations like

startups where a lot of new folks, there's a lot of stress, you may be not at product market fit, there's lower trust because there's you haven't built relationships and bonds, there's a lot of misalignment back to the buzzword. OKRs become kind of this like, I don't know, compliance exercise. They become this

Mathias Meyer (10:48) yeah.

Sara Hicks (10:48) and then that leads to this you often hear in sort of these culture conversations is

these hierarchical control where people are feeling like, it's just hierarchical, it's tops down. And you really look into that and you really look into that and it's like, oh, this is what's going on. Actually, we have a

Mathias Meyer (11:07) Mmm.

Sara Hicks (11:07) culture problem, we have a strategy problem, we have a mission problem, we have a trust problem. That's not going to get solved by OKRs, definitely not.

Mathias Meyer (11:14) Yeah. Wouldn't it be nice if it did?

Sara Hicks (11:18) Yeah, it should be magic. Like you said, boom. Yeah, be like, oh, OK. Other thing that made me think of is OKRs about visibility or trying to be about legibility and visibility.

Mathias Meyer (11:32) You

Sara Hicks (11:32) And they try to make work visible to people who can't see the work directly, which is not a bad thing. Like, it's not a bad thing.

Mathias Meyer (11:38) Yeah, agreed.

Sara Hicks (11:40) So.

So people who are removed directly from the work are people like managers or executives or investors or the board. And so not a bad thing. You want to keep your board and your investors and your executives and

your managers, in the loop of what what's being worked on. But the default can be distrust, right? The default can be like

there's this people who above you need a structured mechanism to trust you, and then this OKRs thing gets rolled out. very ripe for this hierarchical control or this feelings of distrust if it's not done intentionally. Yeah.

Mathias Meyer (12:15) Yeah, yeah,

it's this whole thing where that number can turn into a target, which I mean, you know, in many ways, OKRs are used to set target expectations.

And then, know, good, Goodhart's Law kicks in one of several laws that we've we've come across thinking through this episode, which basically states when a measure becomes a target.

it ceases to be a good measure because then

Sara Hicks (12:39) Hmm.

Mathias Meyer (12:40) people will try everything they can to reach the target right and for better and for worse but anyway let's not like blow through all of the laws like right away but

Sara Hicks (12:51) you

know I'm so excited to go to my favorite one.

I was so excited about this episode because it really is one of my most favorite examples and it's called the Cobra Effect. Also referred to as perverse incentives. But it goes like this, I think it's the British government concerned about kind of the number of cobras, these venomous snakes in and around Delhi. I don't know the year, but a while ago. So they offered this bounty.

for every dead cobra. And initially this was quite successful, right? Like, you know, large number of snakes being killed for this reward. But perverse incentive. Eventually people started actually breeding them just for the income, which is...

makes a ton of sense like okay there's this reward might as well breed them and so then the government became aware of this and thought this is not what we wanted and they said okay we're gonna scrap the incentive we're gonna scrap the program and what happened is the the cobra breeders then set all the snakes free so it led to in ultimately an increase

in the Cobra population.

Mathias Meyer (14:05) rate.

Sara Hicks (14:06) And so, yeah, like the back to Goodhart's Law the incentive structure often has undesirable results. And I've seen this

Mathias Meyer (14:13) Yeah.

Sara Hicks (14:13) again, memory lane, I've seen where I put in place some financial incentives for the sales team around implementation, which was directly in conflict with some things with

our engineering and product teams and but of course they wanted to build more hours to get these implement you know so it happens

Mathias Meyer (14:35) Yeah, there's the whole misalignment happening,

right? Where, like, as you said, perverse incentives.

We also have the law of unintended consequences. There's so many great laws in this whole bucket.

Sara Hicks (14:45) will link all of these in the show notes, of course, because we love them. Yes.

Mathias Meyer (14:49) when you have OKRs where suddenly parts of the organization have different goals than others that well generally creates conflict or you know silos or finger pointing those things I mean we're jumping ahead a little bit but I speaking of the Cobra effect

I think I used to think of the Cobra effect or it reminds me of the times where at the end of each quarter, would be getting emails from vendors either for renewals or sign up now and get a big discount. I knew just look at the calendar and say, it's that time of the quarter again, where quotas need to be met Which again, is odd because like, yes, push somebody to renew now, but you'll have to.

just keep doing that or worse there's a snowball effect there as well. Where if you keep over

Sara Hicks (15:32) Yeah.

Mathias Meyer (15:35) promising on discounts and lowering revenue, you'll have to send out more and more emails like that quarter over quarter.

Sara Hicks (15:42) actually have on my calendar every year. with one of the cable companies. I won't name it I don't want to ruin this great incentive, which is call it to cancel because I know when I do that, I'm going to get a massive, discount for the next year than renewing normally.

okay, I'm going to play that game because the incentive is there. know, like you said, each quarter, it's just going to be a big discount to renew.

Mathias Meyer (16:06) Ugh.

Sara Hicks (16:06) Anyway, I've taken us off topic.

Mathias Meyer (16:08) No, not really. You have your own OKRs for your cable thing So let's talk about what they actually are. mean, do you want to walk us through this?

Sara Hicks (16:20) Yeah, I think, objectives, key results. they're not necessarily a bad thing for what they're trying to do, whether it's management by objectives, KPIs, objectives and key results. But they're some indicator set for a period of time. I've seen it again, like you said and I said, it's these objectives set

annually and then maybe there's a subset of them that get set quarterly and they're often tied to financial objectives for the company or customer retention objectives or mean you name it churn productivity which it gets to be dangerous

Mathias Meyer (16:58) Uh-huh.

Sara Hicks (16:59) but

some number of objectives. And then often there's this period of time where teams and the leadership team collaborate to come up with, what are key results they want to see for that period of time? And how are those going to be tracked and measured? at what level within the organization? So is it at the team level or kind of more at the individual level?

You know, lot of things break down because not everything can be measured, right? So things like

Mathias Meyer (17:26) Mm-hmm.

Sara Hicks (17:27) they often get referred to, which I don't love, know, these softer things, which are critically important. So culture or relationship and team bonding, those don't generally get OKRs. And yet they have

dramatic impact on how the team operates and how the team operates more effectively. yeah, it's hard to define beyond that. I'm trying to think of what else to share in terms of what are OKRs. But they they usually tie back to

Obviously some sort of action. like I said, know, customer attrition is an example, right? So that's a classic one.

Mathias Meyer (18:02) That's a classic one. Yeah. Also problematic, but we'll get to that. Yeah.

Sara Hicks (18:06) Right. It's because it's a lagging right indicator. You know,

Mathias Meyer (18:10) Yeah.

Sara Hicks (18:10) something's happening towards the end because the customers are leaving, they're churning. So usually the issues earlier in the life cycle of that customer.

but you're tracking customer attrition but it's really a popular measurement and it's an important one because it usually

Mathias Meyer (18:24) It is important.

Sara Hicks (18:26) has financial impacts but everyone wants to keep revenue up, everyone wants to grow customers but as we talked about like the billing cycles create certain dynamics like in my case with my cable provider. Anyway,

It seems like a very simple process. It's a three letter acronym. People are like, let's do Most of the time in my career, seeing it turn into a lot of bureaucracy and

Mathias Meyer (18:51) Yeah.

Sara Hicks (18:52) finger pointing and blame. But back to what are they? What did I miss? What else are they? People want

Mathias Meyer (18:57) I think one.

Sara Hicks (18:58) them to be about motivation. They want them to be about

speed. They want them to be about innovation but they often just get bogged down.

Mathias Meyer (19:05) Yeah, I think there's one element at least, how it's defined by some of the literature on OKRs, quote unquote, is that whatever number you pick, whatever that number you want to see, or let's just call it a goal,

you're supposed to split that 70 30. Like 70 is 70 % is like of that number is like the ideal you want to achieve.

Sara Hicks (19:28) or look for that, or just make some changes.

Mathias Meyer (19:30) Like this is in an odd way, this is actually your a hundred percent. you know, you have the 70 % on one end and then, uh, the 30 % the remainder is supposed to be your stretch or a motivational goals. And there's this

Sara Hicks (19:44) Hmm.

Mathias Meyer (19:44) idea

I haven't done research on where there's actually any proof for, but I doubt, there's any empirical proof that you can make for this case that these 30 % extra this, the place where innovation happens, where people get motivated to be more creative, in finding solutions,

Sara Hicks (20:00) Thank

Mathias Meyer (20:03) to achieve the actual a hundred percent. It's like, just

Sara Hicks (20:07) Yeah.

Mathias Meyer (20:07) even saying this out loud,

It seems so silly to me.

Sara Hicks (20:11) Yeah.

Mathias Meyer (20:12) but it is, you know, it is how it is postulated. It is how, when I started implementing it, how I first looked at it, but then I was like, well, we'll just, how about we just try to achieve a hundred percent, make that number of realistic thing. And that's it. Like we don't,

Sara Hicks (20:24) Yeah. Yeah.

Mathias Meyer (20:29) I, doesn't happen in this 30 % stage. There's a whole lot of other stuff that fits into that you need to have.

like psychological safety, as you mentioned, even just like as a starting point

Sara Hicks (20:38) Yeah.

Mathias Meyer (20:40) and some level of autonomy for your teams or the ability to actually make changes or suggest changes that help you maybe go into new directions, quote unquote, innovation.

Sara Hicks (20:50) Yeah.

Mathias Meyer (20:51) I think, yeah, there's something where, you know, when where eyes can glaze over just the words gold and motivation, innovation and creativity come together.

or it just can be, I guess I want all of that. An OKRs can give this to me. So again, like this is odd temptation that this is just gonna solve your problems. But to be fair,

Sara Hicks (21:12) Yep.

Mathias Meyer (21:13) know, having goals, also ambitious goals has a motivational quality. Like we've actually known this for, this is the part where it's been interesting to me. I now get to tie this to stuff I'm learning.

during my master's study on work and organizational psychology.

Sara Hicks (21:26) Yeah.

Mathias Meyer (21:28) But the key thing there is, goals are motivational when it is a joint exercise to set them, right? When they're not handed from the top down, but rather when there's a joint exercise to try to figure out what are meaningful Could we achieve them, even if they are ambitious?

Maybe have a conversation about what's needed to achieve them as ambitious as they are. there's a

Sara Hicks (21:53) Right.

Mathias Meyer (21:53) theory called goal setting, which describes a high performance cycle, which describes that a little bit further by two gentlemen named Block and Latham. And they've put this together like years ago. Like sometimes it's amazing to me how long we've known from a work

Sara Hicks (22:10) Yeah

Mathias Meyer (22:11) and organizational perspective that

doing something that involves, like workers, quote unquote, and isn't just handed from the top down, actually leads to better satisfaction and motivation. And yet, we just tend to ignore all of that.

But anyway, the other thing that you mentioned is a lagging indicator, and this is where, is it like churn revenue, all of those are always...

know, favorite OKRs because I mean, roughly like business wants to make more money. mean, that's so ideal. Ideally,

Sara Hicks (22:40) Right. That's what it comes down to. Yeah.

Mathias Meyer (22:43) and you want to reduce churn. And as you also said, like the third component to this is then, know, employee satisfaction. But all of those are highly lagging, as you said, like meaning they are the end result of

potentially many things happening over a quarter or a year, and not all of those you have a direct influence over, which makes

Sara Hicks (23:06) Yeah, yeah.

Mathias Meyer (23:07) it problematic when churn is an organizational ideal or an organizational OKR, and now here I am with my engineering team focusing on a very specific aspect of this product, I have no chance of influencing that metric in any kind of way.

Sara Hicks (23:24) Right.

Mathias Meyer (23:24) Or if there is some sort of connection,

it will be diluted in what every other team was doing. And so there's, can maybe argue about a correlation, but usually not a direct causation. And I think that's a, you know, that's an OKR trap. Like churn again, like just to wrap this up a little know, beginning of year. Like I remember those times when suddenly like cancellations went up.

but they didn't go up because people canceled, but just because credit cards expired. It's just beginning of the new year, that's fairly normal. Other times it was also because somebody at the end of the year went through all of the accounts at a business and just

Sara Hicks (24:05) Yep.

Mathias Meyer (24:05) like, we don't need this anymore. Like just cancel, cancel, cancel, cancel. If we need it, somebody will let me know, but we need some budget adjustments or things like that. And those things

Sara Hicks (24:16) for sure.

Mathias Meyer (24:17) you can influence.

but you have no control over them. And the beginning of every year, it will still gonna happen. And your turn is gonna at least to some extent go up.

Sara Hicks (24:26) Yeah, great examples. Yeah, really, really good examples. I'll throw in one more just to it kind of helps to define as we're talking about what are these. So as we said, it's just a simple kind of goal setting framework, right? Or seems so simple. So here's an example that I had in one of my past jobs as an executive. is, so the objective was something like,

You it's obviously you want your objectives or ideally it's qualitative. There's some inspirational statement of what you might want to achieve usually with your objectives. And so we had some objective, was like, make our onboarding experience delightful, something like that.

Mathias Meyer (25:06) Mmm, yeah.

Sara Hicks (25:08) And seems, seems genuine, right? Seems good. And then the key results often are, you know, two to five.

measurable outcomes that tell you whether or not you achieved that. Did you achieve making your onboarding experience delightful? So an example that we had, give you two of this was, okay, let's reduce our, our TTB, another aggregate time to benefit. So that time to first value from X days to X day. let's say from 14 days to three days.

Mathias Meyer (25:38) Hmm

Sara Hicks (25:39) So you want to make it

faster for customers to get to benefit. So that would be, you know, do changes in your onboarding. Another one was increase your 30 day or 14 day retention from say 40 % to 65%. So you wanna, you know, retain your customers. They come back regularly within that first 13 day window or 30 day window. So those quantifiable.

But you then set a team working on this and not every team's working on this particular issue or this particular thing. And that requires a lot of cross-team collaboration, which is challenging. We're assuming

Mathias Meyer (26:17) Uh-uh.

Sara Hicks (26:18) that even your analytics solution and systems even track at this granularity.

Mathias Meyer (26:23) Yeah.

Sara Hicks (26:24) We're not even talking yet about AI. And these are things that are around,

longer sprints or longer periods of time, but now we can do kind of much more rapid development and testing and smaller loops. Anyway, those are, I just wanted to give a really structured example because inherently like what I just shared is those aren't bad objectives or bad

Mathias Meyer (26:46) Yeah.

Sara Hicks (26:47) kind of key results. in how they're then executed, whether it's the engineering team, as you talked about, Mathias, or,

these different motivations come into play that start to contradict each other. hard exactly to point to which team is going to get the benefit of hitting this stretch goal. And then you did talk about stretch goals. had a company where if you hit 50 to 70 % of your goal, that was considered good. I'm like, that's weird. Why is that good? You're only 50 to 70 % of the way there.

if you hit full attainment, it actually meant that your goal was not good. It was too low. Like you sandbagged it or something. You know, I'm like, so weird.

Mathias Meyer (27:26) lot in there.

I mean, it's like people have these, yeah, some weird assumptions, not just about like what it all means are probably not proven or factual or true. And then, as you said, like the fascinating part is like you uncover dependencies.

like as you're trying to achieve those OKRs, right? Where you need work from another team, but that team has their own OKRs to work towards and can't really give you any of their time. And so you're kind of stuck. So that's

Sara Hicks (27:57) Yeah.

Mathias Meyer (27:58) another odd way where

OKRs can contribute to building silos. Yeah, interesting, interesting. God, we have so much to go through today and so little time.

Sara Hicks (28:09) Yeah.

Mathias Meyer (28:12) Just.

Sara Hicks (28:12) We might have a

follow on. We might even have a follow on with a guest, a favorite guest of ours. We'll just tease that there, but we might have episode

Mathias Meyer (28:18) We'll tease her.

Sara Hicks (28:19) two, yeah.

Mathias Meyer (28:20) She already tentatively agreed. So we'll

Sara Hicks (28:23) nice.

Mathias Meyer (28:24) call her in. I mean, I this whole thing where I looked into the history of OKRs and it's a fascinating thing on its own. maybe we'll keep that a little bit shorter. mean, think like we have like... Yeah, we'll

Sara Hicks (28:36) We must touch on it. I think you should touch on it. I think we should just do it a little, yeah.

Mathias Meyer (28:39) touch on it. Like some of the, you know, as many of...

the things we have in this late stage capitalism. I go back to a gentleman named Frederick Taylor who invented the principles of scientific management. We're still all suffering from his ideas of breaking down work. I mean, at the time it was production line work, but breaking down work into the smallest possible building blocks.

that you can then individually measure and also just making, you know, the humans actually doing them quite interchangeable and they don't need, you a lot of skills, a lot of specialization. They just need to be able to do this one task. ooh, I mean, that's a whole other episode, think, Taylorism and what it's all led to.

Sara Hicks (29:08) and we can get a lot to be hear. And also, we're very grateful for the people who there to support us. And we're grateful for the people who who have to And we're for the have been there us. we're grateful for

Mathias Meyer (29:27) We've had like a whole ton of frameworks leading up to this. Like one of the...

Early popular ones that we already mentioned were MBOs which were popularized but not invented by Peter Drucker, one of the goats in terms of management. then we had KPIs and then OKRs and I'm not even sure who invented KPIs. Maybe nobody specifically because it's also not rocket science. It's just numbers and names, which is

Sara Hicks (29:50) Yep.

Mathias Meyer (29:53) really everything.

And the other thing that I found interesting, like William Deming, another goat, another greatest of all time,

Sara Hicks (29:57) .

Mathias Meyer (30:01) was very active in popularizing production means that he's learned and implemented in Japan. And know, there's the Toyota production system that comes to mind there. But he critiqued Drucker, so he was not a fan using measurements, using metrics to measure

Sara Hicks (30:03) Okay. Okay.

Mathias Meyer (30:19) progress to use it as a management principle or goal setting. had these key principles that he later turned into total quality management, a whole

Sara Hicks (30:28) Mm-hmm.

Mathias Meyer (30:28) production process where every team is responsible for delivering something of high quality to the next team. So it was actively looking at the dependencies and just making sure that

whatever team came after them as their customer, which I kind of like. There's something nice to that approach. But

Sara Hicks (30:46) Yep.

Mathias Meyer (30:49) really like, okay, ours we have to think Andy Grove and obviously another goat who wrote like the densest book

Sara Hicks (30:56) This is.

Mathias Meyer (30:56) on management ever written, High Output Management. And he talks about,

Sara Hicks (31:01) A classic.

Mathias Meyer (31:02) it is definitely a classic. In the book, he talks about building a strategy in...

Andy Grove style, it's only a few pages, it's less than 10. I didn't count it exactly, but it was shockingly low number. then he talks about like, how do you turn strategy into plans? And these are the following four pages of whatnot, where he basically introduces OKRs. This was like 94 is when the book originally came out.

Sara Hicks (31:27) Yeah.

Mathias Meyer (31:27) And he it as two questions. Where do I want to go?

which is your objective, and how will I pace myself to see if I can get there? I do love the pace myself,

Sara Hicks (31:40) Yeah.

Mathias Meyer (31:41) because it seems like today we're treating OKRs as the opposite, but I love that it has a calming quality to it. And obviously the pacing

Sara Hicks (31:43) It's kind of nice. Yeah. Yeah.

Mathias Meyer (31:49) is the key result. that is it. love how stupidly simple this approach is, because I mean,

This is what I talk to my clients about. This is what, you know, the kind of approach to planning that we at the intentional organization like to postulate. Just keep it stupidly simple. Like, and here we are, like a whole industry has developed around it. there's something really refreshing about it.

Sara Hicks (32:11) Yes.

Mathias Meyer (32:12) But yeah, I mean, everything really took off when Google implemented OKRs and attributed big part of their success to using them, which

to me it always leads to some eye rolling. And for you it made you think about another thing. speaking of laws and other things that happened.

Sara Hicks (32:29) Yeah, I I do think it goes back to, know, Google had obviously incredible, legendary, rapid success. And then, you know, a lot of folks pointed back to OKRs being part of that, how they were able to scale and get to have so much success.

And then you're referring to another favorite thing that I like to talk about in addition to Cobras is the cargo effect. everyone thought like, well, this is how the winners operate. So why don't we just implement OKRs because it worked for Google, probably should work for us. so, you know, a cargo cult for those that might not know it's this belief system that

these behaviors of these more technologically advanced people or groups or companies, you might be able to implement them and expect the same. can imitate them yourself and you might expect the same results. And I won't go into the story for time, but it's back to a very, very, very fascinating anthropological phenomena. Look it up. That's all I will say. We'll put some more information in the notes, but

Mathias Meyer (33:34) Does

it involve an airport? Was that the one? mean...

Sara Hicks (33:35) It's fascinating. It involved

in World War II and these indigenous islanders observing what happened with the Allied forces. And it's some good homework. We

Mathias Meyer (33:43) Yeah, that's some homework. That's homework for the avid listener. But yeah,

Sara Hicks (33:49) Yeah, I was going to say we won't go there in specific.

Mathias Meyer (33:52) Yeah.

Sara Hicks (33:53) again, like best of intentions.

Google was successful. OKRs were part of Google. OKRs, you was part of this era of Google. You think about it where a lot of companies were just rapidly scaling from, you know, small startup to massive growth. So kind of makes sense that,

people going from 50 people to 5,000 people in whatever 18, 24 months, hiring faster than your culture could scale or, you're operating now across time zones, you're doing it all under rapid change in how companies were capitalized. So a lot of VC pressure who

Mathias Meyer (34:31) You

Sara Hicks (34:31) demanded measurable growth. And this is, you know, where teams started to come in. created just...

incredible challenges and operating challenges and coordination challenges and so OKRs became the solution to that for better or sometimes for worse.

Mathias Meyer (34:48) Maybe more often. Yeah, I think we've seen this with the infamous Netflix culture deck and with the Spotify engineering

Sara Hicks (34:54) Alright.

Mathias Meyer (34:55) process. it's, we tend to keep falling

Sara Hicks (34:58) Those are great examples, yes.

Mathias Meyer (35:00) into the trap quite a lot of times. I mean, here we are. OKRs are here to stay, but we've already established they're quite problematic in many ways. let's cover a few of them and we'll have to save the rest for

another episode.

Sara Hicks (35:16) Yep.

Mathias Meyer (35:16) Let's talk about the problems. I mean, at least some of them. do you want to start?

Sara Hicks (35:20) my favorite one we've touched on it is when OKRs are used without a strategy.

without a clear mission or vision or maybe there is one, it needs to be adjusted. It hasn't grown where the company's grown or it hasn't brought in some of the

the changes that have been observed from customer research. So OKRs come in, more rigid, but they're

Mathias Meyer (35:44) Hmm.

Sara Hicks (35:44) put in place on a foundation that's already shaky. that's

Mathias Meyer (35:48) Yeah

Sara Hicks (35:48) just, they're not gonna solve the shaky foundation, which is there's just an overall vision strategy problem. It's almost better in that case, I think, to just completely pause and reset.

Another problem that we talked about kind of the idea that stretch goals put a lot of pressure and stress on the company, on the people, which then turns into a dynamic mistrust and blame and quickly becomes a people and a people management issue.

Mathias Meyer (36:19) Mmm.

Sara Hicks (36:20) Seen this a lot, they're used as a means of

of control, becomes again a big culture issue when they're just about control and then they're going to cause folks to behave in ways that are unexpected and unintended consequences, especially when there's potential revenue or paycheck incentives.

I mentioned this one and I feel really strongly about it is like the don't really work for things that aren't always visible or truly measurable.

Mathias Meyer (36:49) Hmm.

Sara Hicks (36:51) And this is what gets lost. think work that really matters but doesn't metric kind of easily. So culture,

Mathias Meyer (36:57) Yeah.

Sara Hicks (36:58) relationships, learning. Learning is a great thing and you want that in your companies and you want those feedback loops.

It's really hard to put an OKR on that. It puts an overemphasis on quantifiable data.

Mathias Meyer (37:11) Yeah.

Sara Hicks (37:12) And we're human. We're not always quantifiable. And that's what's great about us. There's a lot of sand.

Mathias Meyer (37:17) Yeah, it's...

Sara Hicks (37:19) All this leads to sandbagging. I mean, we've talked about all these. The sandbagging, the mistrust, the...

Mathias Meyer (37:24) What is sandbagging?

I need an explanation.

Sara Hicks (37:27) Well, folks then put in goal that they know they can hit. They kind of sandbag. I wonder where that comes

Mathias Meyer (37:33) bro.

Sara Hicks (37:33) from. Yeah, they start to put in metrics that they feel that they will be able to achieve because they know they're going to be measured on that. They're going to be paid on that. They're going to be, know, their

Mathias Meyer (37:44) yeah.

Sara Hicks (37:45) performance. We do have to look

Mathias Meyer (37:47) Great.

Sara Hicks (37:47) I am very curious about the history of sandbagging.

Mathias Meyer (37:51) I mean, there's this whole thing about using OKRs to measure individual performance.

this is where we come to, you know, to like OKRs as a means of control, using them to stack rank people, right? Using some imaginary or dreamed up number or goal or measurement as the indicator whether somebody is performing or not. And then pushing aside, data that might not be quantifiable, like

people's performance might have been impacted for all kinds of reasons, for personal reasons or for reasons because the culture turned really bad at the company. there's a constant onslaught of layoffs happening. Everybody's talking about AI and we need more AI or, know, whatever, whatever the craze is, disregards everything that

like influences people from the organization, not just the people that are motivation, their satisfaction, or their willingness to work towards stretch goals, to even stretch themselves because maybe it becomes meaningless. amongst the next thousand people to be laid off, why would I bother?

And that is easily disregarded, which I was thinking about what do we mean when we talk about control? But it is something like this. It is like handing down

Sara Hicks (39:06) Yeah.

Mathias Meyer (39:07) an observational tool when it's used as control. And it is also when it's used as a means of filtering out, when it means to thin out the herd as they so violently say at times.

Sara Hicks (39:21) I don't want to, this is gonna be a rabbit hole, so please forgive me. I know we're running short on time, but I did just look up sandbagging and it is surprisingly very dark, or maybe unsurprisingly,

Mathias Meyer (39:32) yeah.

Sara Hicks (39:33) but like a sandbag is an actual weapon. Like that's the history of it. Like it's used to knock people unconscious. A choice for

Mathias Meyer (39:41) great, okay.

Sara Hicks (39:42) criminals, it's a small bag filled with sand. And to sandbag someone actually meant to,

actually assault them from a position of like hidden advantage. And

Mathias Meyer (39:52) Wow.

Sara Hicks (39:53) it evolved there from this like covert aggression or pressure. And in more modern day, it's bit more familiar with gambling and card games. So where you appear weak to gain an advantage. Anyway, this goes back to our dark

Mathias Meyer (40:08) Okay, oof. Okay, that's really dark.

Sara Hicks (40:14) phrases and

jargon in business. There you go.

Mathias Meyer (40:19) Yeah, but I mean, let's maybe close this out on a slightly positive note. Is there ever a good time to use OKRs to

Sara Hicks (40:26) Hmm.

Mathias Meyer (40:27) whatever extent?

Sara Hicks (40:28) Mmm.

I mean, I think so. I think OKRs, especially like I always have to coach my clients and kind of think about when I'm trying to, is to keep them simple. They're

Mathias Meyer (40:42) Hmm.

Sara Hicks (40:42) not gonna solve the problems. Start small. a few objectives

I don't want to use buzzwords, but iterate on them. Like I think, especially in early stage startups, which is the folks we work most with kind of early to kind of that growth stage. you know, they they can be helpful. They can be helpful to really focus in on a set of problems. look at them for 30 days or 60 days, you know, only do two or three, you know, like, don't try to

Mathias Meyer (41:08) Yeah.

Sara Hicks (41:08) solve them all. Like we did, like we had this

Big, just solve it and then after 30 days, look at like, how'd you do and make it really transparent, like make it really visible to the company and the organization. Something will go wrong. You will measure something that had some unintended consequences and just make sure you're learning from that. So I think that can be positive

Mathias Meyer (41:28) Yeah

Sara Hicks (41:29) if you're learning, if it goes back to if you're learning.

Mathias Meyer (41:32) agreed. Like to me, I like to keep it even simpler than that. I tell my clients, don't even call them OKRs Just pick three things, figure out how are you gonna pace yourself to use any gross words. And then start there, and then go through the process you described. Keep reviewing, learning, iterating, refining, things like that. And thing you most definitely need.

That's maybe the nice thing that OKRs kind of enforce is to figure out what are we actually trying to achieve with this company? What is our business actually trying to focus on beyond the quarter over quarter? What's like the larger thing that we tie this back into? Like a vision and a strategy, this key leadership

Sara Hicks (42:10) Thank you.

Mathias Meyer (42:12) artifact as we call them in our book, that are maybe the most useful exercise you need to do before implementing any kind of planning,

whether that's OKRs or it's just something that's just like a list of three things.

Sara Hicks (42:25) Yeah, I'm a big fan, I think, of what you just said, the top three. Just keep it simple. Don't even call it OKRs. And then review it honestly after 30 days or 90 days or whatever period of time and do it. it work. Do it again. Keep it really clean and simple. And I think that's maybe why OKRs took off. Maybe these other alternatives seem too simple. I don't know.

Mathias Meyer (42:47) True,

it's possible.

Sara Hicks (42:50) Or maybe

it's that there's no famous company to point to is like, yes, use our top three framework. wasn't, you know, it wasn't what Google did. Who knows?

Mathias Meyer (42:57) Yeah,

or they were just old-fashioned companies, like the just not the tech kind, not the hip new kind. Okay. Do we still, before we wrap, do we still have time for something fun that's going on?

Sara Hicks (43:09) Sure, yeah, let's wrap with something fun since we went to some dark places.

Mathias Meyer (43:13) to some dark places. Well,

what's on your list for right now?

Sara Hicks (43:20) let's see. Well, okay, I have recently gotten back into my yoga practice

Mathias Meyer (43:27) yeah.

Sara Hicks (43:28) and I'm actually going to a new studio just down the street in Venice and I've done a hot.

power vinyasa class multiple times in the last week. And the classroom temperature is freedom degrees as you would say. Quite warm. So there's...

Mathias Meyer (43:49) That is 35

for the rest of the world.

Sara Hicks (43:52) for the rest of the world. Anyway, it's a flow kind of strength

Mathias Meyer (43:58) No.

Sara Hicks (43:59) great to get back into that movement and the strength. And I know you've been doing some strength training

Mathias Meyer (44:05) yeah.

Sara Hicks (44:05) as well. Yeah, I'm probably gonna go this afternoon. a lovely community of people there.

Mathias Meyer (44:09) That's just... That's a lot of yoga.

Sara Hicks (44:13) It's a lot of yoga, yeah. but how about you? What about you?

Mathias Meyer (44:16) I've been mostly reading study materials, which has been interesting in its own way as much as somebody might be interested in work in organizational psychology. I will give another shout out to Obsidian for managing my notes. It's a great tool.

Sara Hicks (44:33) Very good.

Mathias Meyer (44:34) I've gone deeper and deeper into it, even stuff for researching this.

You know, I could go to my notes in Obsidian for some of these things.

But I mean, I will also pick, you know, some things about, you know, sports and physical movement. guess like I, I've been working towards doing a handstand, like just as a, as a goal, right? Not as a specific, I need to under any circumstances achieve this. It's just like, it guides the exercises that I'm doing.

Sara Hicks (45:06) you have an OKR, Matias, for your handstand.

Mathias Meyer (45:08) I, you

could, no, I will, it's a strategy maybe. maybe it is an OKR of sorts, it could be. But again, like, it's meant to guide all of the exercises that I'm doing. And I mean, I'm, you know, looking at how things are going, I might be able to do a handstand. I just liked it as a nice goal. And yesterday I was, you know, my feet against the wall still.

but putting as much balance as possible on my hands. I stood for like three times for 30 seconds each. And it is very satisfying. just, I, these were things, I'm doing things in the workout now that I'm just like, didn't know I could do or that would be fun. must be the happiest and

Sara Hicks (45:49) That's so great.

Mathias Meyer (45:52) most positive client that they have. Like just.

Just let me do something more challenging.

Sara Hicks (45:58) Inversions are

so great. Inversions are, I think they're detoxifying. They're just, yeah. And it takes so much focus. So you're like, of course, you're right in the room. You're right in the moment, which is a good thing. Yeah. That's good note.

Mathias Meyer (46:09) just don't drink too much beforehand. think that's a, that's a, or eat. Like I think that can be challenging.

Sara Hicks (46:17) I did think of, I did cook over the weekend a great soup. I made a red lentil coconut.

curry soup. It was

Mathias Meyer (46:27) That's a golden combo.

Sara Hicks (46:30) so delicious. Yeah, served it with a little bit of dollop of Greek yogurt on top with some little twist of lime and some cilantro.

Mathias Meyer (46:39) dollop and a twist. Nice.

Sara Hicks (46:41) Yeah,

dollop and twist. Yeah, it's great.

Mathias Meyer (46:44) Well,

Sara Hicks (46:45) On that note.

Mathias Meyer (46:46) this topic, Defo to be continued,

stay tuned for the next season for that.

• #Leadership
• #WorkplaceCulture