When you set OKRs with your team, the wildly held belief is to set stretch goals (stretch key results, really). Google is known for saying their sweet spot is to score between .6 and .7 of your objectives. So everyone has taken that idea and run with it. The more teams I meet with — the more I’ve come to question if this is the best approach.
Why we love stretching teams
Setting goals slightly outside of probable attainment will (we hope) make teams reach higher, and even if they fail, the business ends up with a better result — team burnout aside. From managements perspective, this is an alluring idea because everything we read, and all the inspirational videos we see online tell us we are all capable of accomplishing more than we could imagine — if only we were given the right incentives. If pushed — what are we really capable of? When it comes to personal goal setting, this practice is something I whole heartedly embrace, but in a team setting I’ve come to question its application.
Google says if teams are scoring key results of 1's, it’s too easy. Teams are sandbagging. I have also heard from some that the .6 — .7 metrics are really only used to evaluate the objectives, not the key results. But I’ve seen both situations really so I’m not sure this is consistent everywhere.
The sentiment goes — if teams are scoring below .6 — you have a problem (maybe). Which, assuming OKRs are not related to performance, tells us what exactly? This too isn’t overly well discussed or covered. In my experience, using OKRs as a performance evaluation tool is a bad idea, but you will probably find that underperforming teams tend to score lower when the day of reckoning appears.
So… Google said they want teams to score between .6 and .7.
As time goes on, I’ve come to find this attitude a little problematic, and I’ll explain why. Most teams I’ve spoken to about OKRs have discovered similar issues. When you’re aiming for .6 and .7 scores, I have learned that teams end up having to do all kinds of mental calculations to just work out what they are really trying to accomplish.
It means every score you get, requires a story — and a mental calibration.
Let’s say you want to obtain 1,000 users over the next year. That is your key result. Are you really trying to just get 600–700 users? If so, 600–700 is your actual goal, so if you get 300, are you really 50% on track, or only 30%?
In this scenario, working out if you are really performing becomes a kind of constant conversation about what you’re really willing to consider as success.
Using OKRs makes things nice and easy because you can score them accordingly, but I think where the 60% — 70% sweet spot that is common becomes an issue is you’re not being upfront with everyone about what standards are expected. It’s like having two scoreboards at a basketball game that show different results, and then expecting teams to work out which one to pay attention to as they play.
On a personal level, sometimes when we reach 60% of a key result, I find myself feeing disappointed with myself. It feels like I failed, but that I’m ready to move on. But then on others, 60% feels plenty of an achievement. Which emotion I feel seems to depend on how hard the key result was to achieve.
If it’s hard, I consider 60% a win.
If it’s easy, I consider 60% a fail.
As time goes on, I’m much more in favour of the following line of thinking.
Set an objective you want to hit — and aim for it. No games, no stretch goals, just set ambitions targets, and aim for them with everything you’ve got. If you think you can get 1,000 users — say so. And leave it at that.
I’ve tried this at a few organisations now and it feels much more in-line with peoples values, and when you point it out, everyone seems to look less confused. No bullshit. Saying what you mean, and trying to put the focus back on team performance, instead of psychologically tricking people into delivering as many key results as possible.
But what if you don’t know how big you can go?
Good question. But I think this is a different issue entirely. If you’re setting stretch goals because you don’t know whats possible, I understand. Sometimes I do that too, but usually one quarter will tell you what reality looks like.
We occasionally want some key result so badly, but we have no idea how big we can go so it’s tricky to know what to aim for. A real world example of this is organic traffic. When we started writing articles about OKRs on OHNO.ai, we had no idea how much organic traffic we could generate, so we set a short term 3 month goal of getting 100 organic views in a month. We crushed that goal really quickly. But at the time, we had no idea what the baseline could be.
But don’t think because you can’t estimate an achievable goal, that’s an excuse to set something unachievable for the sake of it. You should be thoughtful when setting key results. If you keep setting key results that are vastly unachievable, teams will quickly see them as silly and ignore them accordingly.
My second issue with stretch key results is this. The reality is most people are terrible at estimating future returns anyway, so any goal you set is most likely way off. So why make it intentionally more off. Why not just guess as best you can, with the information at hand, and spell out what you really want.
In some cases, key results are less about what you want, and more about what you need to stay alive — this is particularly true of unprofitable companies with cash-burn rates or public companies where missed expectations can seriously impact valuations.
Imagine being in a finance meeting with your CFO and he says,
“we need $100k this month to pay salaries.”
So you deliver $65k and say to him,
“So… this is enough, right?”
Of course not. Because accountants like to deal in certain numbers, because certain numbers are useful when it comes to planning and paying wages.
But hear me out. I know stretch goals are supposed to inspire. I’m all about that. And yes, if you set a very ambitious goal, and you get even closer to it than you are today, in most teams, this is real progress. But I think sometimes we all need to bring things back to basics. I wonder if it might be time to rethink the way you set goals and start communicating what you actually want, or better, need, instead of trying to play games with the team. Because in the end, remember, they end up playing the game too.
