This post is an elaboration of a shorter post I wrote about five years ago.
The two management giants of the mid-twentieth century were Peter Drucker and W. Edwards Deming. Ironically, while Drucker hails from Austria-Hungary (like me, Drucker emigrated to the U.S. as an adult) and Deming was born in the U.S., it was Drucker that proved to be more influential in America. Deming’s influence was much greater in Japan than it ever was the U.S. If you’ve ever been at an organization that uses OKRs, then you have worked in the shadow of Drucker’s legacy. While you can tell a story about how Deming influenced Toyota, and Toyota inspired the lean movement, I would still describe management in the U.S. as Deming in exile. Deming explicitly stated that management by objectives isn’t leadership, and I think you’d be hard-pressed to find managers in American companies who would agree with that sentiment.
I thing Deming’s “Out of the Crisis” is a better book, but I don’t have a physical copy of it
Here I want to talk about why I think it is that Drucker’s ideas were stickier than Deming’s in the U.S. It all comes down to the nature of organizations and people.
My rendering of an organization. Not to scale.
An organization is a big, hairy, complex mess, and the bigger the organization is, the hairier and more complex it gets. Managers, on the other hand, have a very finite amount of bandwidth. There are only so many hours in a day, and this number does not increase with the complexity of an organization. And, let’s face it, they’re spending something close to 100% of that bandwidth attending meetings.
How is a manger to make sense of this mess?
OKRs as a mess-reduction mechanism
In the Druckerian approach of OKRs, you set a small number of objectives, and then you identify quantifiable key results for each objective that provide a signal about whether progress towards the objective is being made, and then you monitor the key results. Key results reduce the bandwidth required to make sense of what’s happening in the system. Instead of the blooming, buzzing confusion of the entire system, monitoring key results means you can filter out all of that unnecessary detail to focus specifically on the aspects that are relevant to the bandwidth-limited manager. It’s no coincidence that when John Doerr wrote a book on his experience with OKRs at Intel and how he brought them to Google, he titled his book Measure What Matters.
The beauty of a set of key results is that they take the messiness of the system as input and create a neat summary in spreadsheet or slide format as output.
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