How Ambitious Should your OKRs Be?
Ambitious goals are so important that Google’sTen things we know to be true mentions them directly:
We set ourselves goals we know we can’t reach yet, because we know that by stretching to meet them we can get further than we expected.
Ambitious goals are also called stretch goals. But what exactly is a stretch goal?
The stretching analogy
Let’s think about the characteristics of stretching:
- While you are stretching, it feels uncomfortable, even slightly painful. Stretching takes you out of your comfort zone;
- Stretching may be uncomfortable while doing it, but it makes you feel good afterward;
- The whole idea of stretching is to try to reach a place that you know you can’t reach. You have to keep trying to reach your feet even though you know you can’t reach it;
- After stretching regularly, you start to reach farther than you could if you haven’t been stretching. You may still not be able to reach your feet, but now you can reach places that you couldn’t reach before;
- Although stretching is supposed to feel uncomfortable, you shouldn’t strain a muscle. You should not try to go so far as to harm you. You can try to be as Jean Claude Van Damme but take your time.
How this applies to goal setting?
When you think about this analogy, you can say that stretch goals are goals that:
- Take you out of your comfort zone;
- Make you go after targets that you think you can’t reach (at least not yet);
- Make you achieve things you couldn’t do before;
- Should be hard but not as hard as to harm (or demotivate) you.
Think of stretch goals as goals that are so hard that make the team rethink the way they work, ask hard questions and have the difficult conversations that have been avoided. Stretch goals make teams wonder how far they can go.
In fact, in a meta study of 35 years of empirical research, goal-setting theory pioneers Edwin Locke and Gary Latham found scientific evidence that shows that “the highest or most difficult goals produced the highest levels of effort and performance.”
As Larry Page wrote in the foreword for How Google Works, making people think big is hard, and bold goals are key:
[Teams] tend to assume that things are impossible, rather than… figuring out what’s actually possible. It’s why we’ve put so much energy into hiring independent thinkers at Google, and setting big goals.
“70% is the new 100%”
Rick Klau’s video presenting OKRs has more than 450.000 views. In it, Klau mentions that:
Objectives are ambitious, and should feel somewhat uncomfortable.
The “sweet spot” for an OKR grade is .6 — .7; if someone consistently gets 1.0, their OKRs aren’t ambitious enough. If you get 1s, you’re not crushing it, you’re sandbagging.
Klau’s statement led to some questioning that “if 70% is the accepted result, isn’t 70 the new 100?”.
This issue only happens if the team is not stretching. Allowing the 70% as the target would be like only touching your leg without trying to reach your feet – i.e. not stretching at all. The whole idea of a stretch goal is to keep trying to reach the 100%, even though you know that most of the time you won’t reach it.
Moonshots vs Roofshots
The type of OKRs that Klau is describing are called “Moonshots”. In practice there is also a second type of OKR, the “Roofshots”. The table below explains both:
Moonshots are a foundational building block of OKR, but they require a lot of organizational maturity. In my experience, moonshots can cause a few issues:
- They can demotivate the team
People like to beat goals. Only achieving 60% of the OKRs can demotivate a lot of them, especially in the beginning.
- Lack of accountability and commitment
Moonshots can be misinterpreted by some, creating a culture in which you don’t have to reach your goals: “Hey, it doesn’t matter. It’s just a stretch goal”.
- Alignment issues
Especially when using activity-based Key Results, moonshots can cause alignment issues between interdependent teams. One team needs something from another but the second one is unable to deliver it since it was a stretch.
Free download – The Beginner’s Guide to OKR
That is why roofshots exist and are used by several teams inside Google, usually mixed with moonshots. One approach I like is setting one moonshot key result per OKR – the others are all roofshots.
I strongly recommend that you start by using roofshots only. To develop a results-focused culture, begin by focusing on beating goals. Afterward, when the culture is more mature, you can evolve to moonshots to start questioning how far the organization can go.
This post is also available in: BR