How John Doerr Keeps Companies On the Right Track
Good morning, Term Sheet readers. Andrew Nusca and Lucinda Shen filling in for Polina.
Why are so many of our great companies, organizations, and institutions failing us? Because they’re setting the wrong objectives. Or worse, they’re setting none at all.
At the TED conference in Vancouver on Saturday, John Doerr took to the stage to make an impassioned case for the importance of OKRs, or Objectives and Key Results. Too many organizations have taken us to the wrong objectives, he said. Often those objectives lack a sense of purpose to energize teams—a sense of why. “This has to stop,” Doerr said.
“It almost doesn’t matter what you know,” he added, paraphrasing the late Intel CEO Andy Grove. “Execution is what matters most.”
To Doerr, objectives outline what you want to accomplish. They must be significant, concrete, action-oriented, and inspiring—“A kind of vaccine against fuzzy thinking,” he said. Meanwhile key results stipulate how you’ll get it done. They must be “specific but time-bound, aggressive yet realistic, measurable and verifiable,” Doerr said.
Transformational teams have a clear sense of “why,” Doerr said. OKRs, set and made transparent by everyone in an organization, help clarify that. “A compelling sense of why can be the launchpad for our objectives,” the investor said. And it can keep top talent in place.
Over the years, the acronym has become a sort-of mantra for the famed Kleiner Perkins Caufield and Byers venture capitalist, who more recently turned it into a book (Measure What Matters; Portfolio, $14) he describes as “my love letter to our future.” Doerr first presented OKRs to two young founders named Sergey Brin and Larry Page in 1999; their company Google (now Alphabet) has now gone on to become the world’s second most valuable by market capitalization. It still uses the OKRs system, alongside the Gates Foundation, rockstar-philanthropist Bono, and myriad entrepreneurs.
Yet “OKRs are not a silver bullet,” Doerr warned. “They’re not going to be a substitute for a strong culture or strong leadership.”
But they are a way for leaders to hone in on what really matters—with hope that their organization can get on the right track.
“Do you have the right metrics? Take time to write down your values, your objectives, and your key results,” Doerr urged his audience. “Do it today.”
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VENTURE DEALS
• ServiceTitan, a Glendale, Calif-based HR software firm for home-service businesses, raised $62 million in Series C funding in March in a round also joined by HIVE Ventures. Battery Ventures led the round and was joined by investors including Bessemer Venture Partners and ICONIQ Capital.
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PRIVATE EQUITY DEALS
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OTHER DEALS
• Verve, acquired JusCollege, a Las Vegas-based student travel firm, for $25 million.
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IPOs
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EXITS
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FIRMS + FUNDS
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PEOPLE
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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.
