This excerpt is adapted from the book OKRs for All: Making Objectives and Key Results Work for Your Entire Organization , by Vetri Vellore. In 2021, Microsoft acquired the software company he founded, Ally.io; Vellore is now the corporate vice president of Microsoft Viva Goals —a tool for setting and tracking OKRs that is now part of the Viva employee experience platform.
You might have heard some version of the following parable: A man walking down the street sees three bricklayers. Each of them is diligently placing bricks along a wall, and each of them is working very hard.
To the first bricklayer, the man asks the question, “What are you doing?” The bricklayer replies, “I am laying bricks. I am working hard to feed my family.”
The man moves to the second bricklayer and asks the same question, “What are you doing?” The second bricklayer replies, “I’m building this nice, big wall.”
Finally, the man comes to the third bricklayer, who is the most focused, and asks again, “What are you doing?” The third one has a gleam in his eye and says, “I’m building a great cathedral.”
This story has always captured the importance of purpose-driven work for me: The fact is, most employees don’t understand the full context of why they’re doing the work they do. They work on what their manager has told them to do, or what some project management tool lists as the next task for them, but no one offers them the bigger picture.
When every team and person in your organization is aligned to the strategic priorities of the business and understands the purpose behind their work, those teams and people will be highly engaged, productive, and happy—it’s true when building cathedrals, and it’s true in business.
When teams understand the “why,” they intuitively recognize concepts and plans more concretely and will be able to flag risks, needed changes, and opportunities that may have been missed otherwise.
By focusing on what matters in the midst of the daily whirlwind of activity, your teams stay in the “flow” and are highly productive. Purpose and alignment bring your teams together and foster collaboration.
The leadership challenge is how to bring purpose to the work everyone is doing—so that everyone in the organization understands they are building a cathedral and not just coming to work every day to lay bricks one at a time.
Why Now?
In March of 2020, COVID-19 tore across the globe and upended life as we knew it. Like most business leaders (at least those of us fortunate enough to work in industries where we could do so), I closed the office of my software company, Ally.io, and sent the team to work from home, unsure of when we’d come back or what it meant for our business’s future. Quickly, our entire way of working changed.
As a business leader, you need line-of-sight into the work being done across the company; in hybrid mode, your employees need to experience transparency from you.
While the shift to hybrid and remote work appears to have happened in the blink of an eye, the transition has been underway for years. Over the last decade, more employees have been opting for flexible work arrangements and work hours, and more employers have started to embrace this change. Meanwhile, business leaders have been under a steadily growing pressure to show success faster, and as our teams moved to distributed models, the old systems that worked in-office are creating bottlenecks and leading to a lack of alignment. Moreover, talent has become harder to retain, and while the cost of switching jobs is lower for the employee, the same is not true for employers. COVID-19 exacerbated these changes, and it did so more quickly than anyone could have imagined.
Business leaders across the globe found themselves needing new ways to stay resilient and maintain growth, adapt to new risks, and keep every employee focused and motivated, just as they had done while facing other unexpected changes before, and most certainly will again.
How can we rise to these challenges? I’ve seen thousands of businesses drive alignment, purpose, and focus, and increase business resilience and growth, by leveraging the goal methodology of OKRs (Objectives and Key Results). And I’m excited to share how OKRs can add value to every single employee in your organization.
My company, which was acquired by Microsoft in 2021, builds OKR software. At the start of the pandemic, as we all scrambled to make sense of the external factors changing our lives, it was OKRs that helped ground the entire team to our most important work, and more importantly, to the outcomes we needed to drive.
More important than my own experience using OKRs to grow multiple businesses, my team and I have helped thousands of businesses do the same using OKRs and our software. From large enterprises to start-ups. Technology to manufacturing. Media to healthcare. Operations and HR to engineering and sales. I have seen OKRs make an impact in every type of business and function. Organizations use OKRs to set goals, solve their strategic execution problems, and motivate employees to achieve breakthrough productivity—which in turn helps companies realize their objectives faster and more reliably.
Throughout this most recent period of change, and others before it, the OKR framework has been the key to resilience for so many companies, and to mine as a leader. It has given us the ability to continue to scale as we moved out of the initial system shock and into the new normal.
Most industries have moved to a global, distributed, and sometimes asynchronous workforce. This phenomenon, coupled with a growing tech stack to accommodate it and increased urgency around the pace of innovation and growth, has led to the need for visibility, alignment, and employee engagement across businesses that are becoming more complex.
Speed and collaboration are happening at a scale we’ve never seen before, but with this new way of working, business leaders and their teams are experiencing challenges amplified by the climate around them. These challenges take several forms:
1. A lack of alignment is creating bottlenecks: In many cases, managers and teams aren’t aware of what other departments are working on, whether they’re focused on the same initiatives, or whether their own group is working on the right initiatives or driving toward the right outcomes. This lack of structure is exacerbated by processes that often rely on a single person or single point of failure. Without the alignment needed to move quickly and in sync, the business can slow to a crawl, create customer-facing problems, or have teams doing duplicate work.
2. The expectations for growth are more daunting than ever: 90 percent of new businesses fail. And 70 percent of them fail in the first two to five years. The expectations investors and shareholders have for exponential growth are higher than ever, and the competitive landscape is exploding, regardless of industry. This pressure falls squarely on the shoulders of the leadership team.
3. The Great Reshuffle: According to Microsoft’s 2022 Work Trend Index , 43 percent of the global workforce is somewhat or extremely likely to consider changing jobs in the coming year. Employees aren’t connecting face-to-face as often as they used to. They might not meet up in the break room, around the ping-pong table, or near the coffee pot. Company culture in 2022 comes partly from a sense of purpose. Employees want to feel connected to the company’s mission and vision. They want to know that they’re doing work that contributes to that mission, and they want to trust that the work they’re doing is the right work.
4. Visibility is more difficult, and blind spots have emerged: As a business leader, you need line-of-sight into the focus areas and work being done across the company, and the ability to click deeper to understand a trend, growth opportunity, or risk to the business. On the other side of that coin, your employees need to experience transparency from you that is not as natural as it may have been in-office.
OKRs help every employee see the cathedrals you are building with each brick they lay.
In the end, it all comes down to a relentless focus on purpose and making it applicable to every part of the business. That’s where OKRs come in.
OKRs align your entire organization to strategy, shifting focus from output—the everyday work of your team—to outcomes, which are the results of that work. This mindset shift keeps your team highly engaged with a clear sense of purpose and understanding of how everyone is contributing to forward momentum.
As a goal-setting methodology, OKRs were introduced by longtime Intel CEO Andy Grove and later popularized by John Doerr in his strategic planning masterpiece Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs , which introduced OKRs to the world stage. Our method builds on and adapts the traditional model to help organizations avoid common misinterpretations of OKRs. For example, some companies use them as top-down directives, which can leave some employees out of the mix and create a toxic environment that halts progress. A more effective approach focuses on an organization’s top priorities while leaving room for ideas from its team members.
I advocate an approach that uses three building blocks. Objectives are clear, inspiring goals. Whether at the company, department, or team level, an objective is where you are headed—your target. Key results are measurable outcomes, which should be ambitious but achievable, and quantifiable enough to lead to objective grading. And finally, key initiatives are the individual activities whose execution will impact performance on the defined objectives.
The ideal state is to have OKRs embedded in the DNA of your organization at the company, department, team, and individual contributor levels, enabling each team and person to stretch beyond what they thought was possible.
What’s Next
Perhaps my favorite part of the bricklayer parable is that it’s often attributed to the famous architect Christopher Wren, who was commissioned to rebuild St. Paul’s Cathedral after the great London fire of 1666. To truly execute on something amazing, Wren understood that it takes everyone working toward the same vision and took it upon himself to ensure the people working on St. Paul’s understood that vision.
This is where two critical challenges come into play when thinking about business execution and translating strategy into actual productivity:
1. Many leaders think their team automatically has the context and automatically sees why their work matters or fits into the overall mission. That context is actually lost quickly when you traverse different levels of the organization. In fact, the consulting firm McKinsey recently asked this question , and found that while 85 percent of execs and upper management said that they feel a sense of purpose in their day-to-day work, only 15 percent of frontline managers and frontline employees agreed. Worse, nearly half of these employees disagreed, compared with fewer executives and upper management.
2. Too often, organizations and leadership have convinced employees they are the bricklayers. Employees don’t feel empowered to engage in conversations about the broader purpose and believe that they aren’t entitled to that context. This has a detrimental effect on productivity. That same McKinsey study found that managers and employees who didn’t feel that connection to purpose saw significantly lower outcomes (both at work and in their personal lives) than those who did.
OKRs help every employee see the cathedrals you are building with each brick they lay. And, just as importantly, they help leaders determine where more focus is needed, which resources are best suited for which job, and how to move quickly without sacrificing quality.
The OKR methodology has helped thousands of the most successful companies in the world execute and stay ahead of the game for over 50 years. OKRs provide focus, accountability, clarity, and purpose, and leaders have embraced their simplicity and structure like no other framework. They can do the same for you and your team, driving growth, alignment, and flexibility in a time when you can’t afford to live without it.
Vetri Vellore’s book, OKRs for All: Making Objectives and Key Results Work for Your Entire Organization , was released in November 2022. Details about the book and how to order a copy are available at okrsforall.com .
