How Google gained success with OKRs

How Google gained success with OKRs

Founded in 1998, Google the brainchild of - Sergey Brin and Larry Page, started with a goal of organizing the world’s information.

Today, Google has become a part of people’s everyday life. From being the world famous search engine to providing various other services, Google has a net worth of $811.42 Billion.

How did Google become the tech giant that it is today? Probably for many reasons, but one principle that escalated Google’s progress is OKR

During the thriving years of young google, a VC investor sensed the potential behind the minds of these brimming entrepreneurs. After being a part of Intel under the management of Andy Grove, John Doerr was ready to embark his success model at Google.

Google success with okr

In 1999, John walked in a two-story office at Mountain View to meet these Stanford dropouts, Larry Page and Sergey Brin. He had come with a gift, a system that had surfaced his skills at Sun-Microsystems while handling a team of hundreds.

Earlier that year, Larry and Sergey pitched a 17 deck slideshow to John, which was all about Google. The deck had just two numbers, but it still was an impressive presentation willing to take down the competition by storm. They were late in the field, yet their PageRank algorithm in beta was way better than current competitors. To test if they’re bankable, John asked out of curiosity, “ How big do you think this could be?”

Expecting a market cap of  $1 billion, he had all the calculations in mind. However, what took him by surprise was Larry’s response, a $100 billion market capitalization.

Then and there, John decided to take a risk with this ambitious young company, and today that risk is a reason for their phenomenal growth.

When John walked into the old two-story office once again, he was there to introduce - Objective and Key Results, Grove’s gospel which he had strategized in more than 50 companies.

Gathered around a Ping Pong table, in front of Larry and Sergey—with Marissa Mayer, Susan Wojcicki, Salar Kamangar, and 30 other young googlers, John started his first slide with “What is OKR? “  After explaining the entire concept to these great minds, he told the band his set of OKRs for the day.

John had an Objective to Build a planning model for Google, and his 3 KRs were to finish the presentation on time, create a sample set of quarterly google OKRs and gain a management agreement for a three-month OKR trial.

He sketched out two OKR scenarios, one was a hypothetical situation of a football team, and another involved his real-life experience at Intel to gain dominance of microprocessor systems.

At the end of 90 mins, he closed with a value recap of OKRs, i.e., surfacing the primary goals, channelizing efforts, linking diverse operations and unifying the goal of an entire organization, John fulfilled his first KR of finishing right on time.

Intrigued by John’s pitch, Larry was fascinated by the idea of laying out what mattered most to them. Furthermore, he wanted to implement it in no time since Google was struggling with an organizing principle.

After that day, there was no looking back; Google was advancing towards a transparent module of - Open goals, Open systems, and Open Web.

The OKRs for Google were set in every quarter by Larry himself; this leads to an exponential growth point of the company because every employee had a collective commitment towards fulfilling the company goals.

It was a mere lucky day when Google met OKRs, and till date, they are a perfect fit.

The shift of traditional OKRs system

In 2006, a minor change appeared in Google’s OKR setting hierarchy. With an ambition to create the world’s best browser, then CEO, Eric Schmidt stated if you’re planning to make it, you better be serious about it.

Google success with OKR

That was the point when Google shifted the quarter system to annual OKRs. This time, a 3-year long moonshot was, to create the fastest and agile web browser.

It created an inherent tension around google atmosphere and the KRs which defined it changed every year. For a start, the bar was set-up at 20 million weekly active users by year’s end.

Everything at Google was exciting because of the impossible factors were challenged with OKRs; this goal was no less. Google started from scratch for Chrome.

At the end of the first year, he reached a count of 10, and this was a kick start for the upcoming year.

In 2009, he raised the bar to 50 million users and failed again with an audience of 38 million.

In the third year, the team focused on 10x improvement moonshot.  The team targeted to make Chrome a browser for 10 percent of the world’s one billion internet users at the time, i.e., 100 million users. To make it a stretch goal, the KR was finally marked at 111 million users.

Seemed like an aggressive goal as it is, they started campaigning, and marketing for Chrome created strategies to pin dormant users, gain a new crowd. They created brand awareness in the US and increased chrome demographics for Linux and other OS. By the end of 2010, they reached their ultimate goal.

Shortly by the end of Q3, they touched 111 million seven-day actives. They hit the success bar with the world’s most agile web browser, Google Chrome.

This peak was all because of an Objective fixed three years ago, the cadence was a significant shift in this module, but the core remains unchanged.

Since that slide show at the Ping Pong table, Google still uses the same goal-setting framework of OKR. Today, the Parent company Alphabet’s market cap exceeds $700 billion, making it the second-most-valuable company in the world, quite a journey from a market cap of $100 billion in 1999.

Objectives and key results - OKR give absolute clarity, accountability, and the purpose to lead.

“Credits of changing the course of the company forever goes to OKRs.” Eric Schmidt.