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Comment by wtvanhest | Hacker News Reader

On the Nestle example:

One of the biggest constraints in a business is employee focus. Theoretically, you want to maximize future free cash flow. Unfortunately, there are many inputs: rev growth, solid roi on capex, lowering non-essential costs, employee retention, unit costs, brand etc.

Management teams have to distill the message about what they want in a way that many employees can get behind. Nestle was too focused on unit costs, and should have likely added one more constraint like rev growth, but if they added too many, employees as a group would lose focus.

Most businesses have 2-3 essential business drivers. 1 is never enough, 4+ is likely too many to focus on.

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I think Alibaba has a nice priority list:

Customers, employees, shareholders.

That looks on the face of it nice and worthy but it's rather be meaningless because those are not actual goals. Those words are way too loose for that. The other thing about it is it smells like a marketing phrase rather than anything truthful

Why would they be meaningless?

You can use this list in any way. For example when you want to increase your product price. This is fine when it is good for the customer (because they will get a better product). But it is not fine when you do it for the shareholders alone.

They are also goals because the ultimate goal is to please the customer, then the employee and than the shareholder.

I think they are great guidelines.

Does that also mean it is always a great idea to decrease your product price?

In the consulting company where I work at employees come before customers. Employees are the single most important asset and much harder to replace than customers.

Why not make everything free? That would benefit the customer dramatically. The reality is that 'customer first' is a good idea, but not actionable.

Google uses a hierarchical system for quarterly and annual goals called OKRs (Objectives and Key Results) that tries to align goals for the company, orgs, teams, and individuals.

http://www.businessinsider.com/googles-ranking-system-okr-20...

Anyone else using that? We use it at my company with very varying levels of success.

Almost all big companies. It was done when I worked at Intel 2010sh

Interesting. How did you like it? Does every person at Intel have their own quarterly OKR list, or do they stop propagating down at some level? Were they always on time? How did lower levels give input with regard to what they thought were important goals? Or did really everything come top-down?

A lot of places. It dates back to (IIRC) Intel in the late 70s. Doerr brought the idea to Google.

Oh, I hadn't heard it was that old. Fascinating, so far I've always thought it was something that came directly out of Google itself.

Google has a good PR department? ;)

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