What motivates people to do their best work? It helps for them to know how their contributions fit into their company’s greater goals or purpose. But how exactly can organizations give employees that understanding of why their everyday work matters?
Vetri Vellore, a serial entrepreneur, has spent years pondering these big questions. Vellore founded Ally.io to make software focused on objectives and key results, or OKRs—a framework to help align employees’ goals to their companies’ broader missions and priorities.
Last year, Microsoft acquired Ally.io, whose OKR tools are being integrated into Microsoft Viva, the employee experience platform; now those tools are called Viva Goals. Vellore joined Microsoft as a corporate vice president—or rather, he re-joined Microsoft, after having worked there for 14 years earlier in his career.
Vellore spoke on the WorkLab podcast about how OKRs can help companies forge a sense of connection and shared purpose among their employees—especially in hybrid work, when people aren’t together in person as often.
Three big takeaways from the conversation:
A lot of people come into work with “no idea why they’re doing what they’re doing,” Vellore says. “They do something because their manager asked them to go work on it, or because some task management system said, ‘This is the next thing you should be doing.’ ” OKRs can help people “stay focused on the purpose, not the daily whirlwind,” he says. And they’re happy and productive as a result.
People have misunderstandings about how best to use OKRs, which have been around for decades, as Vellore notes. One misconception is that OKRs are only useful for a company’s key business leaders. Vellore suggests democratizing OKRs for maximum effect. They shouldn’t be used as top-down directives, but rather as a way of helping people figure out what they can contribute—which not only empowers employees but unleashes innovation.
In an OKR framework, the objectives should be slightly out of reach. The sweet spot, Vellore says, is when people can achieve 70 to 80 percent of the objective—that’s success. And the idea is to celebrate not only the progress people make but everything they’ve learned. “Success is not about nailing the objective 100 percent or 110 percent, but it is about using that as a learning opportunity to continuously get better and better,” he says.
WorkLab is a place for experts to share their insights and opinions. As students of the future of work, Microsoft values inputs from a diverse set of voices. That said, the opinions and findings of the experts we interview are their own and do not reflect Microsoft’s own research or opinions.
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Here’s a transcript of the Episode 6 conversation.
ELISE HU: This is WorkLab , the podcast from Microsoft. I’m your host, Elise Hu. On WorkLab we hear from leading thinkers on the future of work. They are economists, technologists, researchers, all sharing surprising data and exploring the trends transforming the way we work. Today we’re looking at how to help employees understand the purpose behind their work.
VETRI VELLORE: One of the things they’re trying to do with the organization is build a growth mindset. Success is not about nailing the objective 100 percent or 110 percent, but it is about using that as a learning opportunity to continuously get better and better. What you’re celebrating is both how much progress you’ve made, but more importantly, how much learning you have had.
ELISE HU: That was Vetri Vellore. He’s a corporate vice president of Microsoft, focused on its Viva employee experience platform. He’s committed to helping leaders and employees understand what it is exactly that they’re building together. So much so that he founded a software company called Ally.io, which Microsoft acquired last year. Ally helped businesses align around common goals to drive exponential results with a goal methodology known as OKRs. It stands for objectives and key results. Vetri says he’s seen thousands of businesses sharpen their focus and build resilience and growth by using the OKR methodology. So we were eager to dig into the topic with him.
ELISE HU: Hey, Vetri. Welcome.
VETRI VELLORE: Thanks, Elise. It’s a pleasure to be here.
ELISE HU: Okay. So obviously setting goals is essential in business. So if a company is interested in getting better at setting a goal and trying to find a concrete path toward achieving it, why OKRs? Give me your pitch.
VETRI VELLORE: Yeah. First, it drives alignment and purpose. It helps ensure everyone understands how their work connects up to the larger purpose of the organization, and ensures everyone in the organization is going in the same direction. Second, it improves focus. It’s recommended that you focus when you have three to five things.
ELISE HU: And that’s the ‘O’ part of OKRs?
VETRI VELLORE: Yeah, these are the objectives. And then, of course, each objective has ‘KRs,’ or key results.
ELISE HU: Key results.
VETRI VELLORE: Key results are really the outcomes you want to achieve throughout the quarter of the year. They are used to see whether you are really making progress towards that objective.
ELISE HU: So you started Ally.io to help people achieve their goals?
VETRI VELLORE: That is right. The whole purpose of the company was, how do we bring the why, the purpose, into everyday work? Most people come into work, they have no idea why they are doing what they are doing. It was something because their manager asked them to go work on it, or because some task management system said, ‘This is the next thing you should be doing.’ And how do we turn it into something that everyone realizes they’re not coming to work every day to lay just one brick at a time, but build this beautiful cathedral. And if we can bring that purpose to work and help people stay focused on that purpose, not the daily whirlwind, magic happens. People are happy, productive—and business accelerates.
ELISE HU: How have you kept that magic going during periods of remote work and now in hybrid work?
VETRI VELLORE: One is, of course, we are as a team, huge believers in OKRs.
ELISE HU: That’s a big one.
VETRI VELLORE: That’s really, really a big one. When somebody walks into your team for the first time on the first day of a quarter, there is clarity, absolute clarity, on what is the company going after, what is your role in it? And that brings a sense of belonging right away. Immediately they know that there’s a lot of clarity, and the transparency builds a lot of trust. You can see everything about what’s happening in the organization. The second one, I would say that has worked for us, is the need to take breaks. In the hybrid world, one of the problems is you’re just sitting on a desk for the entire time. There’s no one to come tap on your shoulder, talk about stuff.
ELISE HU: Or go walk to get a coffee? I used to do that every day.
VETRI VELLORE: That’s right. That’s right. And there’s no interaction, there’s no social moments, and people are just glued to the screens all the time. I follow a practice that’s known as Pomodoro. I essentially work for about 25 minutes and take a five-minute break. And I might end up calling a colleague during that time and just having a quick chat. I started following that and, for me, it made a pretty big difference, in terms of retaining my focus over the day and creating some small moments, small points in time, that I can actually go and have a quick chat with someone.
ELISE HU: I also want to understand, because I have read some critics of OKRs say that the approach can feel kind of ineffective or too top-down of an attempt to drive change. I’d love for you to break that down in terms of advice for folks who are hearing this podcast. What are ways that you are approaching OKRs in a way that is more empowering to all the members of a team?
VETRI VELLORE: I would say three things. One, is there is a misconception that OKRs are really only for the key business leaders in an enterprise. If you really think about it, though, it is only people who are further down in the organization who don’t know why they are doing what they are doing. One of the things we suggest is actually democratizing OKRs, at least on the team level, to write objectives and making sure that they are aligned to the top priorities of their enterprise.
ELISE HU: Oh, OKRs wouldn’t necessarily be reserved for just executives to be writing. Lower levels of a team might also have opportunities or be tasked with setting OKRs for themselves.
VETRI VELLORE: That is right. Because sometimes the best organizational OKRs come from deep inside the organization; they just get bubbled up as an organizational objective. Instead of actually using a process where OKRs are pushed down, we use the OKRs as a way to have a conversation. Let’s say you define a very ambitious objective of doubling the revenues, and the executive team might have a reasonably good idea of how to get there. But it is better to check with the team and say, Here’s what we are thinking. Does it work? Or to use your team, the marketing team, the sales team, are you able to support this objective? What are the other ideas you have on how we could essentially get here? So there’s a give and take involved in the process, both in terms of ideation as well as commitment to actually the entire organization being aligned to making it happen.
ELISE HU: Okay. Vetri, this summer you have a book coming out on this very topic called OKRs for All: Making Objectives and Key Results Work for Your Entire Organization . What are some takeaways from your research for that book to make OKRs more empowering for everyone?
VETRI VELLORE: Yeah, oftentimes OKRs become yet another thing for those individuals to go do. Everyone is already busy and pushing so hard—asking them to do one more thing every week, every month is too hard. That happens because sometimes OKRs get introduced in an organization and they exist as yet another silo, yet another thing for folks in the organization to go and do. And it should be used as a way in which people make prioritization choices. How should I spend my week? How should I spend my month? Using these OKRs to guide the relative priority of work. And the third is also sometimes the OKR review process. You kind of look at them frequently to see where things stand, which ones need more attention, which ones need some adjustments and tweaks, and so on, which is really important.
ELISE HU: Yeah, it strikes me as such a helpful way to learn what to say no to, because those of us who do feel kind of overwhelmed, or companies that feel overwhelmed, by all these competing objectives, with clear OKRs you can see whether the choices you’re making are aligning with them.
VETRI VELLORE: I mean, it happens at two points in time. One is when you define your OKRs, let’s say, for a given quarter. You’re going to look at conflicting priorities and you’re going to have to decide things because you want to focus on delivering something amazing this quarter and you cannot do everything. The second being the prioritization that you talked about comes in, because on a regular basis, when your team comes to you and says, Hey, can you do this additional thing? They’re also aware of your OKR so they know whether it’s going to fit into your priorities this quarter or later, and also gives you the permission to say no more easily because you are focused on those three to five things and you’re to nail them first.
ELISE HU: So how should leaders at organizations celebrate when a team or individual OKRs are reached?
VETRI VELLORE: I’ll answer it at two levels. One is, what does reaching an OKR mean? Because in an OKR concept you’re always setting stretch goals. One of the things you are trying to do with the organization is build a growth mindset. Success is not about nailing that objective 100 percent or 110 percent, but it is about using that as a learning opportunity to continuously get better and better. As you might already know, Elise, the OKR concept, right, is about setting the objectives in an ambitious way, and even if you get to 70 to 80 percent, which is typically known as the sweet spot, that is success. So you’re not going to celebrate success only when you get to 100 percent. Sometimes you celebrate success at 50 percent, to be honest. But the sweet spot is 70 to 80 percent. What you are celebrating is both how much progress you’ve made, but more importantly, how much learning you have had, because that’s the stepping stone for greatness next quarter and next year.
ELISE HU: Okay, let’s zoom out a little bit, Vetri. I’m just curious, as an entrepreneur, you, like many of us, had to walk through the various stages of this pandemic, this big shift to remote work, and now the shift to hybrid. Could you just reflect and share what you’ve learned in each of these stages?
VETRI VELLORE: We were one of the fortunate ones in many ways, but we’re still learning a lot. Fortunate in the sense, right from day one, we had a large part of our team sitting in India, and we actually had an almost equal number of team members in North America. And because of that, right from day one, we had to figure out how to make the more distributed hybrid work work effectively for us. So we had developed those patterns and practices that were already working, and in terms of productivity, we were able to continue to move forward. If anything, we became slightly more productive because we are really focused on work and no longer on commutes and other things. But where we really paid the cost, is actually on teamwork. How we used to come together as a team, have fun, hash out things. The creative energy you have when you’re standing in front of a whiteboard and the sense of belonging you have when you actually meet in person and to not just work on duties but have fun. That actually was a bigger cost that we paid and we are now trying to actually get that fun back. We did a bunch of things in the virtual world trying to reclaim that. But that has been a hard exercise, to be honest, and we are still trying to figure it out.
ELISE HU: What has worked for you all in terms of creating or maintaining that sense of belonging when people aren’t together in person?
VETRI VELLORE: One is a clear sense of shared values, the culture. We had to adapt how we actually brought that focus on culture, values in the onboarding process and how we are reinforcing it. The second thing we focused on is processes and systems. Fortunately, this is a place where the fact that we are working remote helped us. We actually honed in on the processes and systems so we can do a far better job working together asynchronously and remotely. And the third thing we actually tried to do is facilitate, essentially, a set of agreements on how we’ll actually work better together. We also doubled down a little bit more on policies, like when people should feel like they should respond to messages. Because one thing we noticed was people were beginning to overwork. People are responding to messages and stuff all the time. And it is not necessary. We are in this for the long term and we have to work at a sustainable pace.
ELISE HU: Okay. So before we let you go, we have a question from a listener that I’d love to have you answer.
VETRI VELLORE: Sure.
ELISE HU: Okay. This is from Skeptical in South Bay. I’m joining a new company and it uses OKRs. I can see why the C-level likes them, but I’m not in management and I just can’t see what effect I can have at my level. What could I personally do on my end to make the system work better for me?
VETRI VELLORE: One is to really use OKRs as a way to bring meaning to work. Again, most folks within this theme, the person who asked the question, are wondering. We just assume it’s clear to everyone. But there’s a lot of research—more than 80 or 90 percent of people don’t understand why they are doing what they are doing. Using OKRs proactively as a way to connect their projects on other things that are happening around the organization to these top-level priorities. You go a really long way in helping people feel engaged and productive.
ELISE HU: Okay. Vetri Vellore, corporate vice president at Microsoft Viva. Thanks so much.
VETRI VELLORE: Thanks, Elise.
ELISE HU: That was Vetri Vellore. Microsoft recently announced that the goal management platform he built with his team at Ally will be incorporated into Viva, Microsoft’s employee experience platform. The new module will be called Viva Goals. And that’s it for this episode of the WorkLab podcast from Microsoft. Check out the WorkLab digital publication, too, where you can find, among many other things, a transcript of this very episode. That is all at Microsoft.com/WorkLab. And for this podcast, please rate us, review, and follow us wherever you listen. Those ratings make a big difference. The WorkLab podcast is a place for experts to share their insights and opinions. As students of the future of work, Microsoft values inputs from a diverse set of voices. That said, the opinions and findings of our guests are their own, and they may not necessarily reflect Microsoft’s own research or positions. WorkLab is produced by Microsoft with Godfrey Dadich Partners and Reasonable Volume. I’m your host, Elise Hu. Our correspondents are Mary Melton and Desmond Dickerson. Sharon Kallander and Matthew Duncan produced this podcast. Jessica Voelker is the WorkLab editor. Thanks for listening.
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