Don Dodge, a Developer Advocate at Google helping developers build new applications on Google platforms and technologies, wrote an interesting post “How Google sets goals and measures success” discussing how Google  goes about goal setting. Don describes the central philosophy to Google’s approach to goal setting is as follows:

The Google goal setting process happens in a 90 day cycle…

    “Every quarter every group at Google sets goals, called OKRs, for the next 90 days. Most big companies set annual goals like improving or growing something by x%, and then measure performance once a year. At Google a year is like a decade. Annual goals aren’t good enough. Set quarterly goals, set them at impossible levels, and then figure out how to achieve them. Measure progress every quarter and reward outstanding achievement.”

Don makes the following observations and insights of his experience with the goal-setting process at Google:

        * OKRs are Objectives and Key Results. I submitted my Q1 OKRs with what I thought were aggressive yet achievable goals. Not good enough. My manager explained that we needed to set stretch goals that seemed impossible to fully achieve. Hmmm…I said “This is just a 90 day window and we can predict with reasonable accuracy what is achievable. Why set unrealistic goals?” Because you can’t achieve amazing results by setting modest targets. We want amazing results. We want to tackle the impossible.
        * Failure is not an option – A while ago I wrote a post about the culture of “failure is not an option” and how, taken the wrong way, that actually conditions people to set modest achievable goals that they are certain they can achieve. Because if they fail…they are fired. Taking great risks, pushing innovation, and striving to achieve the impossible will never happen at companies like that. In that post I discuss how startups definition of “failure is not an option” is completely different. For startups it means they will try 5 or 10 or 20 approaches until they find one that works. They won’t stop until they succeed. Google’s culture seems to follow the Thomas Edison approach which paraphrased is “I haven’t failed, I’ve just found lots of approaches that don’t work, and I am closer to the solution”.
        * Achieving 65% of the impossible is better than 100% of the ordinary – Setting impossible goals and achieving part of them sets you on a completely different path than the safe route. Sometimes you can achieve the impossible in a quarter, but even when you don’t, you are on a fast track to achieving it soon. Measuring success every quarter allows for mid course corrections and setting higher goals for the next quarter.
        * Rewards For Success – The rewards for achieving the impossible are significant. As you might expect there is an algorithm for calculating engineering bonuses with various multipliers. Google attracts the best people in the industry for many reasons, maybe most importantly because they give people the resources and support they need to achieve the impossible. Financial rewards are significant, but they are not the primary motivator. Working with the best people in the world and achieving greatness is the ultimate reward.

It seems to me this continually striving for breakthrough innovation, by setting BHAG’s and clear objectives is working for them. Too many organisation don’t take this process seriously enough to commit the necessary time and resources to defining a limited set of clear outcomes and committing the necessary resources to ensure it’s achieved.