When Performance Is Measured By Results

NOTE: I was invited to write the foreword for Christina Wodke’s new book on OKR’s, Radical Focus, and I am sharing the foreword here.

I was extremely fortunate to have started my career at Hewlett-Packard as an engineer during their heyday, when they were known as the industry’s most successful and enduring example of consistent innovation and execution.  As part of HP’s internal engineering management training program called “The HP Way,” I was introduced to a performance management system known as “MBO” – Management by Objectives.

The concept was straight-forward, and based on two fundamental principles.  The first can easily be summed up with the famous General George Patton quote: “Don’t tell people how to do things, tell them what you need done and let them surprise you with their results.”  The second was captured by HP’s tagline of that era, “When Performance Is Measured By Results.”  The idea here is that you can release all the features you want, but if it doesn’t solve the underlying business problem, you haven’t really solved anything.

The first principle is really about how to motivate people to get them to do their best work, and the second is all about how to meaningfully measure progress.

So much has changed since my time at HP.  The technologies are dramatically more advanced, the scale and scope of systems we build is several orders of magnitude larger, teams move much faster, generally with superior quality and performance, all delivered at a fraction of the cost.  However, these two performance management principles are still at the foundation of how the best companies and teams operate.

The MBO system was refined and improved at several companies over the years, most notably Intel, and today the primary performance management system we use is known as the “OKR” system – Objectives and Key Results.

Unfortunately, another thing that hasn’t changed is that most teams still don’t operate with these principles.

Instead, groups of executives and other stakeholders all too often come up with the quarterly “roadmap” of features and projects and then pass them down to the product teams, essentially telling them how to solve the underlying business problems.  The teams are just there to flesh out the details, code and test, with little understanding of the bigger context, and even less belief that these are in fact the right solutions.  Teams today are all too often feature factories, with little regard for whether or not the features actually solve the underlying business problems.  Progress is measured by output and not outcome.

Christina’s book is intended to help any organization start operating like the best organizations.  I have seen these techniques deployed successfully in organizations as large as a 60,000 employee company to as small as a 3-person startup.  Large or small, if you’ve worked hard to hire smart people, this system will help you unleash their potential.

Christina’s book is now available on Amazon.