Lesson: Cruel Empathy with Kim Malone Scott

Step #5 Direction: To maximize productivity and achieve desired results, your team should set KPIs and OKRs

Telling people what to do never works. I think the way to think about direction and getting everybody on the same page, there's another simple model I like to use. It's a circle. The first thing you have to do is listen. Next, you have to decide, and deciding again is not something that you do as a manager. You need to make sure that there is a process that everybody participates in. I describe the process as ideas get clarified and then debated, and then iterated. Clarify, debate, clarify, debate. That can feel endless, especially at a startup where you sort of think you're moving fast and you think you should just have the answers.

You still have to make your ideas very clear and open yourself up to debate. Especially when you're a CEO, you sort of feel like you have this intuition about what should happen. And it's something to just tell people to do it. It just won't work. If you want them to really understand the idea, you've got to make sure you go through this clarify, debate, clarify, debate, and eventually the decision comes out.

Part of your job as a manager, I think, is to make sure that instead of making decisions, for example, in your staff meeting what you want to do is you want to identify, what are the three most important decisions that need to get made this week? And what are the two or three ideas that need to get debated this week? And who need to do it? And the more you take yourself out of that the better.

James March has written a great book about a primer on decision making, and one of his ideas is that people's egos get invested in being part of a decision-making process. And if they're not involved in the decision, it's almost like a loss of personhood. It's almost impossible to exaggerate how much people care about being part of the decision.

I remember when I was doing my startup I had a staff meeting, and at first everybody at the company was in the meeting, and then we get to this point that the company is too big and some people are excluded. It was very hard to manage. So make sure that at that meeting what you're doing is you're identifying the things that get debated, the things that get decided, and you're pushing those debates and those decisions into the work.

The other thing that James March says about decision making is that most of it happens in the garbage can. Because people’s egos get so invested in making decisions, it’s generally the people who are highest in the hierarchy who make the decisions, as opposed to the people who actually know the facts. Don't let that happen to you. Make sure that you're pushing decisions into the facts. You need to provide context that people deep in the facts may not have, but you need to push them to make the decisions.

Your job is to make sure that the debates are happening, and that they're stopping at a certain point, and a decisions get made. Once the decisions are made they've got to get communicated. That's often as a manager your job. Although, you might let the people who made the decisions communicate the decision itself, the what, but you are responsible for making sure that everybody understands the why. How this decision is connected to the other five decisions that got made, and how one team’s work is connected to another team’s work, and how the whole fits together and why you're doing it in the first place. The mission behind what you're doing.

You need to constantly come back to that as a manager, either connecting it up to a broader company mission, or if you're the CEO and founder of your company to why you care about this in the first place. And why everybody else cares in the first place.

That took a ton of energy. You had to listen. It was sort of frustrating to have to listen. You had to go through this endless clarify-debate cycle, and then you had to communicate all these grand ideas. Stop and start over and start listening again. So that's how you get a team of people moving in the same direction I think.

I'll give you a positive example and a negative example of direction setting.

I once worked with a manager, who was a great guy, but he did a terrible job providing direction for his team. Instead of listening to what everybody wanted to do, putting them through the clarify-debate cycle and then communicating it, he decided all by himself and then he communicated.

The meeting where he did this was one of the most painful meetings I've ever seen in my life. He started out saying, "Here's what we're going to do this quarter." Everybody was like, "That's not what I'm going to do this quarter." "Doesn't he know what I really do?" There were the thought bubbles. But he misinterpreted the thought bubbles.

He thought that his job was to be Mr. Inspiring, and so he started trying to put on this sort of JFK act, and people were definitely not buying that. And then he thought the problem was that he hadn't flattered the team enough, or said enough nice things, so he started in this way that was sort of obviously insincere flattering the team, and he failed. He had to leave as a manager, so that's how not to set direction.

One of the people I worked with who was best at it was a guy named Scott Sheffer at Google, who worked for me, and for a long time I did kind of what the fail manager did. I came up with the OKRs. I allowed a lot of debate, but Scott came to me one day and he said, "Let's let the team tell us what they're going to do this quarter. We're not going to tell them." I said, "Really?" And he said, "Trust me." And I had worked with him for a long time, and so I trusted him, and sure enough we listened to a bunch of ideas, and everybody listened to each other.

There were a series of big debates on the team, which I was not allowed to participate in. I got to hear the results of it and then the team communicated to us what they thought the objective and the key results ought to be for the quarter. Yeah, we suggested some edits, but basically that was what the team did. More productive quarter that quarter than any other of the previous quarters, so that worked really, really well.

Another example of direction setting going badly and then working well, for a long time I thought the purpose of my staff meetings, and this was at Juice Software, I thought the purpose of my staff meetings was for us to make decisions. And then I realized that we didn’t have the right people in the room. We didn't have enough facts in the room. And we didn't have enough time. The staff meeting was going to wind up taking half of the day or something. And also there were a bunch of people at the company unhappy that they weren't at the staff meeting.

So instead of making any decisions at all in the staff meeting what we did was we identified: Here are the debates that need to happen this week, here are the decisions that need to happen this week, and here’s who is going to make them. The net result of that was that better decisions got made. People were happier, morale improved, and I had more hours in my day. So it was a good thing.

Part of direction setting is often coming up with objective and key results. That's what Google called them, and a bunch of other companies in Silicon Valley. KPI is Key Performance Indicators, is another term for it. There are probably a thousand others.

So one of the mistakes I made early on at Google was that I thought it was my job to set the OKRs for the team. Wrong. It happened much better when the team set the OKRs not me. And so my job was to listen to what people wanted to do. Make sure that people were clarifying their ideas for each other, not selling them, but clarifying them, and then debating them. And then making sure that decisions were reached that I agreed with and sort of providing some of the constraints, and then the team communicated the OKRs, and I sort of provided some context. That's part of direction setting. The OKR setting usually happens once a quarter. That’s a great example of how you provide direction in a more quarterly way.