When Performance Is Measured By Results

Marty Cagan argues that the performance-management ideas he learned at Hewlett-Packard, Management by Objectives (later refined as OKRs), remain the foundation of how the best companies operate. The first principle is to motivate people by stating the outcome needed and letting them find the solution; the second is to measure progress by results rather than output. He observes that many product teams still operate as feature factories, handed roadmaps from executives and judged by shipped output instead of whether business problems were solved. The foreword presents OKR-based thinking as a way for organizations of any size to unleash the potential of the people they have hired.

01Key takeaways

• Tell teams the outcome you need and let them determine the approach, rather than dictating solutions.
• Measure success by whether the underlying business problem is solved, not by how many features shipped.
• Be wary of quarterly roadmaps handed down as fixed feature lists with no link to business problems.
• Give product teams enough context about the bigger picture so they can judge whether their solutions are right.
• Objective and key-result systems can scale from very small startups to very large enterprises.

02Key sections

Origins at Hewlett-Packard

Cagan recounts learning Management by Objectives during HP's engineering management training, a system he saw as central to the company's consistent innovation and execution.

Two foundational principles

The first principle is to describe what needs to be done rather than how, and the second is to measure progress by whether the business problem is actually solved.

What has changed and what has not

Technology and team speed have advanced dramatically, but these performance principles still underpin the best organizations, now expressed as OKRs.

The feature factory problem

Many teams receive predetermined quarterly roadmaps and are measured by output, with little context or belief that the solutions address the real problems.

Applicability across company sizes

The author has seen the approach work from a 60,000-person company down to a three-person startup, provided the organization hires capable people.

03From the post

“A partnership dedicated to teaching best practices to product teams and product leaders”

04Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.