Unlocking How KPIs and OKRs Are Hurting Your Company With Radhika Dutt

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Timestamps:
00:00 — Cold Open & Intro
03:42 — Turning OKRs on Their Head (Where Goals Really Came From)
06:55 — Performance Illusion: When Numbers Lie to Leaders
07:35 — Goals vs Puzzles: A Simple Question That Changes Everything
12:49 — Dutt’s Law: Metrics Are for Insight, Not Evaluation
17:28 — The Avid Story: Hitting Targets While Losing the Market
21:19 — The Infinite Game: How to Stay Curious and Keep Growing
23:19 — Fear of Losing Control: Leaders and the Puzzle Mindset
31:02 — The O-H-L-A Method: Objectives, Hypotheses, Learnings, Adaptation
31:23 — Psychological Safety: Getting the Truth from Your Team
38:13 — Why Big, Hairy Goals Are Bullshit

Radhika Dutt (00:03.038)
Set aspirational goals that you can never hit because that’s what motivates people. It is wrong on so many levels. There’s nothing right about that statement.

Our market on the low end was being eroded. The mid-tier was being eroded. The way we were hitting our numbers was by moving further and further into the high end.

The more you start to use this approach, the more you get actual control over what is happening because people are sharing with you what they have learned and what they’re going to try next. The less important, the targets become.

Skot Waldron (00:41.00)
When I’m not hosting Unlocked, I’m speaking at events all over the world. I’m helping leaders and I’m helping teams communicate better. I’m helping them build trust faster and actually enjoy working together. I’ve spoken for companies like The Home Depot. I’ve spoken at national architectural firms. I’ve spoken for pharmaceutical company offsites. I’ve spoken at associations, you name it.

With 99% of attendees of all those events, over 1800 people have reviewed me at this point. 99% of them saying they got some value. That’s pretty awesome. Even the caterers have thanked me. And if they are thanking me and they’ve heard a lot of talks and they’re busy doing their jobs, that’s saying something. If you’re an event planner looking for a speaker who’s really easy to work with, trust me, I want to be the last thing you’re worried about on event day. I’m going to take care of you. And who actually delivers value for your audience that they are going to use on Monday morning when they return to the office, then let’s talk.

If you’re still using OKRs and KPIs to measure your business performance, it might be backfiring on you. Yeah, completely backfiring. And if you’re feeling the pain, my guest is going to tell you why. Radhika Dutt is going to explain this whole philosophy around why OKRs and KPIs and things like that are backfiring and actually hurting our ability to grow in business the way we should be growing in business.

Radhika, she is the author of Radical Product Thinking: The New Mindset for Innovating Smarter which has been translated into Chinese and Japanese. The methodology she introduced in her first book is now used in over 40 countries. She is an entrepreneur, speaker, and product leader who has participated in five acquisitions, two of which were companies that she founded. She is currently Advisor on Product Thinking to the Monetary Authority of Singapore, and does consulting and training for organizations ranging from high-tech startups to multinationals on building radical products that create a fundamental change.

She has built products in a wide range of industries including broadcast, media and entertainment, telecom, advertising technology, government, consumer apps, robotics, and even wine. Yes, wine, the kind that comes from grapes, y’all.

She graduated from MIT with an SB and M. Eng in Electrical Engineering and speaks nine languages. I didn’t know that. That’s pretty epic. She’s now working on her second book, and we’ll talk about that at the end just a bit. So, I hope you’re gonna get something out of this conversation. I wanted to, you know, clarify some things and kind of push back on a couple things in the interview. And I hope that they help you because I know that they helped me. Thanks. Let’s go.

Good morning, Radhika. How’s it going?

Radhika Dutt (03:44.00)
Good Skot, it’s great to be here.

Skot Waldron (03:47.00)
Good to be here. Yes, it is. I get super excited when I have super guests on like you that flip traditional concepts on their head because I want people to think different. I want people to like, you know, not to steal from Apple, like this thing, how do we, how do we turn a concept that we hear about every day on its head? And I, you know, no pressure, but that’s the goal today. You’re going to do that for us.

Radhika Dutt (04:16.00)
I think so. Let’s dive right into it. And goals in OKRs, by the way, the reason I realized that we have to rethink them, and this is something that very few people know, OKRs sound like a new concept, but they actually date all the way back. Their origins are from the 1940s. 1940s, Skot.

Skot Waldron (04:38.00)
You know, I thought you were going to say like 200 BC or something. I thought you were going to be like, no, Skot, if you knew OKRs, they go way back. And I’ve been like, really? You know.

Radhika Dutt (04:50.15)
Well maybe they have them, they just didn’t document it as well, you know, they were inventing the wheel and they were like, okay, let’s set some OKRs for this.

Skot Waldron (04:58.00)
Yeah, we gotta get three wheels done by the end of the month, everybody, you know? All right. So, 1940s origin. Go ahead and me, give it to me. What happened?

Radhika Dutt (05:10.00)
John Doerr, he evangelized them in his book, Measure What Matters, right? And that was 2018. So, we think this is a new thing. But he says, well, it was actually Andy Grove at Intel in the late 70s who brought in OKRs. And that’s how John Doerr learned about it. And so, you go back into history, and you go like, OK, Andy Grove at Intel, 1978. That’s when he introduced OKRs.

Where did he get this idea from? And the answer to that is, he basically took management by objectives from Peter Drucker and tweaked it slightly. But 1940s is when Peter Drucker came out with Management by Objectives. And it’s really worth noting, like what problem was he trying to solve? Because, you know, we just take goal setting for granted in the corporate world. We think this is how you have to build great companies. But why? Why? Where did it come from? And so, if you go back to what problem was Peter Drucker solving. It turns out he was working with General Motors at the time. And the problem statement was that the workforce was primarily unskilled, unionized labor, working on assembly lines, and it was primarily repetitive tasks. And in that case, goals and targets worked really well because you set them together with employees and you can then tell, okay, Andy is a better performer than Bob. He installed 45 tires. Bob did 40, right? There’s one right way to install tires. Great. It worked. And now you take the same concept and apply it to the workforce of today. And let’s just take an exact comparison of a manufacturing floor.

We’ll look at Boeing’s manufacturing floor. And then you set production targets at Boeing, right? And you see the kind of quality issues that come up with panels flying off of planes. And it’s because every task that could be automated has been automated. So, when you then set production targets, what you’re seeing is performance illusion when people hit numbers. It’s not necessarily actual good performance.

Skot Waldron (07:23.00)
Performance illusion. I like it. Yes. That’s the word I want. I wanted that word. Um, you, I mean, you talk about this idea that, you know, the paradox of goals, right? The goals and targets often backfire actually. Um, that’s a pretty radical statement in an entire world that is so focused on OKRS and KPIs, and any other three letter acronym you want to come up with. Um, but what is the biggest misconception, misunderstanding that leaders are having about goal setting as a motivator because sales teams will use this all the time, right?

Goal setting as a motivator. Let’s use it as a motivation to get out there and crush those numbers y’all. And then I was just talking to somebody yesterday. They’re like, I don’t know. My boss really loves goals, but I don’t really thrive on goals. You know, like, I don’t know. What do they get wrong as a motivator about, about goals?

Radhika Dutt (08:25.622)
Yeah, let’s do this experiment live, right? For all of our listeners. Okay, I’m going to ask you two questions. Tell me how you feel at the end of each question, right? Just think about your feelings. What goals do you want to achieve for your company this year? What goals? How do you feel? Versus what puzzles do you want to solve for your company this year? How do you feel?

Skot Waldron (08:57.93)
Okay, for me, goals, I’m like, okay, I’m gonna get some clear-cut thing here. And it gives me something to kind of artificially work towards assuming like all this other stuff fits into place.

The puzzle solving thing. So, it gives me this feeling of like, okay, I’m doing what I’m supposed to be doing. Like that’s what business is. That’s what everybody says you’re supposed to do. So, I’m doing the thing I’m supposed to be doing and that’s all I know to do. And I’m just kind of setting this goal and it’s kind of giving me something to work towards now. Um, the puzzle solving thing was puzzles. Do I want to solve? That’s a little bit different because I sit there and think that’s around problem solving. And then how do I feel when that happens is I feel the sense of accomplishment that I’ve solved a problem and there’s some, I’ve become better and we’ve fixed something that probably might’ve been broken in the past and now we don’t have to worry about that thing. I don’t know, like there’s something there too. So, tell me what you hear when you hear that.

Radhika Dutt (10:12.00)
So, I’ve tried this question at workshops and talks on podcasts, right? And what I consistently hear is, first of all, with goal setting, what I hear is there’s the sense of heaviness, a burden, right? And it’s this anxiety of, wait, what numbers did I have last year? Let me recall so that I can set something similar because I’m afraid of being evaluated against those goals, right? Like I have to set the right numbers. It’s generally this fear-based approach.

And then with puzzles, what I generally hear is curiosity. It sparks this curiosity of, “Oh, what puzzles would I solve?” Right. And it’s one person articulated this so well. He said, puzzles make me feel like this is what I want to do as opposed to goals makes me feel like it’s what the company makes me want to do. It’s the internal drive. And this is kind of what you were alluding to, you know, your sense of accomplishment. What problems will I solve, right? The sense of ownership that comes from it.

And so, this is what I’ve seen when I actually work with teams. Goal-based approach, there isn’t the sense of ownership that it’s what I want to do, right? And when I saw them working on puzzles, when we’ve defined a puzzle clearly and we’re working through puzzles, there’s the sense of motivation and we’ve driven much better business results by taking this puzzle-based approach.

And there isn’t a sense of exhaustion because you know, what happens with goals is, I strive towards a goal, I hit it. And then there’s this feeling of tiredness, “Oh please let me relax.” But no, there’s this next goal, right? Even in sales, we feel that “Oh, now you’ve raised the target. Now this is next thing I’m running after.” Whereas when you set puzzles, right. Then we solve the puzzle, but we don’t end there. Like, in working with these teams, solving one puzzle has already led us to the next puzzle that it has unlocked for us. And therefore, what next puzzle are we solving? As an organization, you never get complacent because you’re constantly solving puzzles. And it’s based on an internal drive, as opposed to me as a leader having to tell someone, I want you to do this, then this, then this, right? I’m not constantly giving you these arbitrary things to work towards. I do give people direction, right? I help promote kind of here’s the next puzzle.

But you’ll see that they come back with puzzles that they also come up with and realize, we need to solve this for the business.

Skot Waldron (12:42.00)
Are you saying we shouldn’t have metrics or goals that we’re working towards?

Radhika Dutt (12:49.00)
There’s a difference in what you just said, metrics versus goals. Metrics are super important. And in all of this puzzle setting and puzzle solving, I am constantly looking at metrics and we’re in fact more rigorous about measurement than we were with OKRs. The difference is that I don’t make my team feel like I’m constantly evaluating you against those metrics about your performance, right?

So, the difference is this, I coined Dutt’s Law for metrics, which is metrics are only effective when they’re used as tools for insight, not yardsticks for evaluation. Tools for insight, right? That is how I use them. We constantly use them as tools for insight to figure out how well is this working? What have we learned? What will we do next? Those are the three questions of puzzle solving. We can go into how I’ve used this in a company and how we drove better business results, and we can talk about sort of what puzzle setting and solving actually means. But metrics and measurement are super important.

Skot Waldron (13:54.00)
Okay. Well, let me push back on this one. Okay, so maybe it’s not pushing back, but it’s just giving you little more context. So, if a company has to have 15 sales every month in order to meet their revenue targets of whatever by the end of the year, what’s flawed in that?

Radhika Dutt (14:17.07)
When you set this target of whether it’s 15 sales opportunities, whether it’s leads, whether you say I want X million in revenue, let’s see what actually happens. In every company I’ve ever worked at, you know that scramble at the end of the quarter, end of the year, like what revenue can I pull in from the next year? But not just that, like, if we’ve done really well, I don’t want targets to be too high next year, so I’m going to push off some revenue into next year. We always play with these numbers. This is what happens.

So, what would I do instead in this puzzle-setting and puzzle-solving approach? I would still say, you know, we or the market expects us to hit X million by the end of this year, but I see a problem. And here’s the problem that I’m seeing in the puzzle we need to solve. Sales grew in the last three years, and they’ve plateaued over the last year. What might be happening?

What do we need to uncover? And so here are some questions that I genuinely don’t know the answers to. One question, is it that the market has changed and there’s something that’s fundamentally different that we haven’t really figured out? Like, is there a trend that is a signal that we’ve missed? The second question, maybe it’s that as a sales team, we knew how to sell to the early adopter, but we haven’t figured out how to sell to the mass market. Is our messaging even resonating?

Or there might be a product puzzle. You know, maybe our product was working well for the early adopters. Maybe they were the tech savvy people. Maybe our product does not hit the needs of the mass market. So, there might be different pieces to this puzzle, right? As a leader, I’m defining the puzzle. I’m genuinely asking questions I don’t know the answers to. And for a leader, by the way, this is so vulnerable because, you know, I was talking to a leader who was saying she was using this approach and the team was like, well, shouldn’t you know the answers to this?

No, as a leader, you can’t know. You’re also working on solving this puzzle. Share what you don’t know sometimes with the team, right? And you’re going to solve this puzzle together. Ask these questions. These are the questions that are going to help you unlock that puzzle. And then you can solve it together. So now we’ve talked about puzzle setting. We can get into puzzle solving, but I’ll pause there.

Skot Waldron (16:36.236)
Okay, I’m going to also argue that I believe companies will do that. They’ll look at the metrics and they’ll say, hey, we’re not meeting, we haven’t hit our 15 sales that we need this month. And we haven’t hit it for the last six months. Something’s wrong here, what is going on? And so, they’ll use it as a way to evaluate, but then they’ll look at, okay, I think companies are trying to diagnose, is what I’ll say, diagnose the problem of looking at what’s going on here, what’s happening here, what’s going on. But I will say that in a world that hello, stock market that is completely measured on performance numbers, quarterly revenue targets and whatever they are, that we are constantly measured up against that. And that is what’s going to cause people to buy your stock or not buy your stock or invest in this or not invest in this. And there is that metrics there. But I think people are

Trying to do that. Are they, or no?

Radhika Dutt (17:28.00)
Well, there are very few companies I’ve come across where there is this culture of constant experimentation, learning adaptation, right? So, there are a few companies where I’ve actually seen this happen, but for the vast majority, this is not what I see. And I’m going to give you an example in sales. I was working at a company called Avid technology, right? And we made products for video editing. We dominated the movie industry. Every single movie that was nominated for Oscars, every movie made in Hollywood used our products for video editing. If you looked at our numbers and our targets, we were hitting all of our targets. We were doing really well. Let’s look under those numbers. Let’s look under the hood, right? What was going on? Our market on the low end was being eroded. The mid-tier was being eroded. The way we were hitting our numbers was by moving further and further into the high end.

So, you’re right that in some companies, maybe you talk about this hard stuff, and you say, what is not working? Maybe you talk about, you know, our low end is being eroded. What are the threats? Maybe that happens in some companies. For the vast majority, what happens? As a leader, you have the illusion that things are going well. Whereas what happens is the team is showing you numbers, not maliciously, but they want to show you numbers to please you. They’re showing you numbers that you want to see.

So as a leader, you’re getting a view, but it’s not the reality from the trenches. So, in this case, what happened at Avid? We kept moving further and further into the high end and we kept pouring money into the video editing business. What should we have done? We should have looked at the fact that our low end and mid-tier was getting eroded. And it was a commoditization of the entire video editing industry.

Apple and Adobe had a different business model, they could give away this product and sell hardware. That’s all they cared about, right? What we should have asked is the puzzle of what does the movie industry need? How should our model evolve? Right? We should have been asking these questions. And in reality, in hindsight, because we didn’t ask these questions, we put way too much money into that video editing business. We should have invested in other parts of the business that were growing. We should have fueled that growth instead.

We should have put a Do Not Resuscitate order on the video editing business and invested in broadcast. Or even if we did something in the movie industry, it wasn’t by just selling more video editors.

Skot Waldron (20:14.00)
So, they’re riding the wave of momentum into this area and not worrying about the destruction that was happening in the background. Is that what you’re saying? That sometimes, we get clouded by the metrics just start driving our judgment a little bit too much and we don’t pay enough attention to solving the puzzles.

Radhika Dutt (20:37.00)
Exactly. So, one of two things happen. One, things are going well and therefore you’re hitting numbers and therefore you get complacent. Two, things are going badly. So, you’re missing your targets. And in that case, what happens is there’s frantic activity. Everyone is moving in different directions.

Everyone wants to make the number and please leaders, but then you see a lot of, you know, lack of collaboration between teams. How often has it happened by the way that one team needs this from the other team, but this team says, listen, guys, we have our numbers to hit. I can’t help you right now. Right. This is the kind of stuff we see.

Skot Waldron (21:19.00)
Yeah, I’ve seen that quite a bit. The silo mentality, basically it’s all about me and my numbers and my thing. in Simon Sinek’s book, The Infinite Game, that concept talks about that a lot. And I use that a lot when I’m doing strategic planning with companies, talking about a finite versus infinite mindset around this. You win and die by the quarter, you win and die by the month, you win and die by, you know, you live or die by this, live or die by that.

Instead of this idea of like, can we continually grow? How do we continuously move forward and what we’re doing? You don’t win or lose the game of business as Simon’s argument, right? We just keep moving. The game is how do you stay alive and keep moving?

Radhika Dutt (22:07.916)
Exactly. And this puzzle-setting and puzzle-solving approach is basically this infinite game that you’re playing. Right. And it doesn’t feel exhausting because it’s not like, you know, you can see that it’s a marathon already right from the start. And it’s not like a goal where you hit one goal, then you want to just relax. Then you want to then a higher goal is set. It’s not about just goals. You can constantly see what you’re solving for.

So, you know, in terms of this infinite game, let me give you the puzzle-solving part and show you how it fits into this infinite game model. Right. So, let’s take the same sales example that we started with, you know, so maybe the puzzle is that, our early adopters, we knew how to sell to them, but we don’t know how to sell to the decision maker. And maybe there’s the first hypothesis that I have that I look at my data and I’m saying, you know what? We’re not getting enough leads even incoming. So, what is going on? So maybe my first hypothesis is my messaging was resonating for early adopters. It’s not resonating in the mass market. So, I try a different messaging. I try it out and that’s my first hypothesis. And then I asked the three questions of puzzle-solving. So, the first question is how well did it work? And notice it’s not binary. I’m not asking, did it or didn’t it work? Or I’m not asking, did you or didn’t you hit this goal or this number? It’s inviting the good and the bad.

How well did it work? And maybe the answer I find is, you know what? This new messaging is working. I’m getting lots of leads. Great. What have I learned? So, I got these meetings. What have I learned? I’m seeing that, okay, in terms of early adopters, I’m getting these meetings with the decision maker, but it turns out the mass market is different. That I get these meeting with decision makers, but there is another group that needs to be sold on this. And traditionally, we have never spoken to this other group. So that’s our learning. What will I do next? So here is the third question. So, based on how well did it work and what have I learned, what will I do next? And in this case, you know, we’ve never sold to this other group. Maybe what I can do is I have webinars to target this other group so that the buyer doesn’t have or decision maker doesn’t have to also go convince this group. There’s another thing I want to try, which is maybe there is stuff I give to the buyer that is easily forwardable to this other group, and it engages them. And maybe this is the other piece that we can try. So those are the two things I’m going to try next, right? Now that is a puzzle that I’m going to cycle back on. And that’s the next thing that I will solve in terms of a puzzle, in terms of asking, how well did that work? What have I learned? What will I try next?

And so, we keep going through this loop and I’m going to constantly increase business results by doing that. And as leader, now I have true visibility when my team is sharing with me what they’re trying, how well it worked, what did they learn and what will I do next? And you start to see how you can develop performance as opposed to just evaluating people.

Skot Waldron (25:23.00)
What resistance do you experience when you’re bringing this up to a leadership team about how they’re the old way of doing things versus kind of your new way of thinking about how to approach things? Because my guess is that a lot of leaders fear that if they remove these things, if they start changing the way that they’re measuring stuff, performance will suffer. What do you think is behind that fear? How do you help them replace this idea of control, because that’s kind of what it is, with the idea of what you’re presenting as curiosity.

Radhika Dutt (26:03.00)
Yeah. So, there are two big fears, right? So, one, to the point of control, the word puzzles even makes leaders feel like, you know, does this mean I’m just letting my team out on the playground? You know, come back when you guys are done playing. It’s the sense of, you know, how much control do I have? Will performance suffer? That’s the first one, right? And for that, what I’ll say is this whole scaffolding that you’re going to give to teams, which is about, first of all, defining the puzzle with a lot of detail so that they know exactly what they’re solving for. And then they have to come back to you with answers to how are they going about solving this puzzle. It helps you make all of those metrics a lot more actionable. It actually makes measurement more actionable because you can course correct and you’re seeing the answers to what are their learnings. If you’re seeing learnings that seem very superficial, like I can ask the team a couple of questions. And then I realized, come on guys, like we haven’t thought deeply enough about this, or have you considered this, you know? And then I get kind of see exactly how they’re thinking about it. And then what will they try next? You know, sometimes I feel like, oh this is too big a risk. Maybe, you know, can you try something smaller as an experiment, right? This is the kind of course correction that leaders need. So, it’s not going to the playground. It’s actual control that you have. So that’s the first thing.

And the second big fear that leaders have is, you know, how will I evaluate my team? How do I quantify performance? And to this, what I say is, you know, what you’re seeing is actual performance. So, I’ll give you an example. I was working with this company where there was a product manager who came from one of these big companies like Google or Amazon. And, you know, she was presenting numbers to me on a regular basis and the numbers always sounded great.

And when we shifted to this model where I was saying, don’t just tell me numbers. I want to know how well did it work? What have you learned? What will you try next? All of a sudden I realized that the numbers that she was sharing with me, yes, the numbers sounded good, but the learnings didn’t show depth. Because I would dig into the numbers a little bit and I’m like, I’m not seeing the depth of learnings. Like what is actually going on? So, what are the users doing? How are they behaving?

The numbers isn’t telling me why are they doing that? And so, this is what you actually see. What you can figure out based on the true answers to these questions is how much scaffolding does your team actually need? Right? You can see how much knowledge, skills, and experience they have and who needs more handholding and who you can give more leeway to a longer leash. Let them go solve bigger puzzles. And I know they’re able to do this. That’s what you want to the leader.

Skot Waldron (29:01.102)
Okay, I agree. I think that there’s deeper thing. I think that we try to scratch the surface. We try to give us all this surface level stuff. And I don’t think that’s telling the real story. And I think you’re looking for the real story. And what are we really trying to solve for here? And how do we make sure that Infinite Games stays alive, that we are thinking long-term of growth mindset, not scarcity mindset of fear-based numbers that are trying to control our outcome and control our behaviors.

When we’re looking at the idea of KPIs, targets, goals, OKRs, I’m guessing, here’s what I’m, I’m going to say, Radhika. I don’t believe they’re ever going to go away. Like I think that they’re just part of our mentality and business world of how we do things.

So, say we’re embracing this world of OKRs and goals and targets and KPIs. How do we do it right then? How do we set them correctly to where it’s embracing the puzzle and the curiosity, but we still have the marrying of the two?

Radhika Dutt (30:12.00)
So, what I’ll say is as a leader, I don’t expect you to give up on OKRs on day one, right? What I find is that in fact, one of the big fears is for a leader, does my team, you know, if I don’t set a number, are they going to give up on measurement and just tell me stories, right? But the reality is as you start to use this approach, and this is what happened with the companies that I’m working with, the more you start to use this approach, the more you get actual control over what is happening because people are sharing with you what they have learned and what they’re going to try next, the less important the targets become. Because what happens is with targets, you might set a target, but halfway through the year, you realize what you should be working on is actually this metric, not this original metric that you had set.

So, what do you do as a leader? The first thing is, this methodology, I call it OHLA. O-H-L-A (Objectives, Hypotheses, Learnings, and Adaptation). So, the Objectives, the O, is how you summarize the puzzle. So, think about OKRs. Right now, with OKRs, you’re setting an objective, and you might say the objective is grow the business. Instead, maybe set the objective as the puzzle. Set the objective as the puzzle where you describe what is the problem with growing the business. And, the might be exactly like we described. We want to get to this growth curve, but maybe sales have plateaued. Describe the questions and summarize the puzzle that you’re seeing. What are some problems that we need to uncover so that we can actually get to that growth curve? So set the objective as a puzzle, first of all.

The second thing you can do is, even if you’re setting metrics because it feels too scary to let go of objectives. When you work with teens, invite the reality. Invite the reality by asking for the good and bad, by asking, how well did it work? Asking for those, you know, what are the experiments they’re trying? How well did it work? What have you learned? What will you try next? Because just asking to see OKRs in red, green or yellow, it’s going to give you the illusion of performance. It’s not going to give you the reality from the trenches. Create the psychological safety by not shooting the messenger when you invite the good and bad answers in how well did it work and talk about it in this way yourself, right? Talk about an initiative that you’ve taken on and talk about how well did it work? What have you learned? What will you do next? You can do this role modeling so that your team is not going to be afraid to share with you in those same terms what they’re working on.

Skot Waldron (33:07.022)
Good, good. So, for those companies out there that want to hold on to these things, because that’s the way they’ve done things for 486 years is that they really need to understand, okay, use the number, but let’s go deeper. Let’s understand those three questions. I think are brilliant. How well did it work? What did you learn? And what are you going to do next? I think just the concept of that is really important because it’s like, that says, we want you to think, we don’t want you to just report a metric. And I saw this a lot when I was doing a lot of work with marketing companies and marketing companies would go and just produce what we call vanity metrics. And you see them on social media all the time and on Google searches and all kinds of things that you post. We got 40,000 views last month and it’s like, okay, like so what? And so, I think that there was a lot of that going around too.

So, thank you for that perspective. I hope I summarized that okay.

Radhika Dutt (34:07.00)
That was brilliant. I loved it. There’s one thing I’ll add to what you said, right? Which is as a leader, if you always set targets and then you’re setting a puzzle, if there is research that shows that the more a person feels evaluated, the less they are likely to take your feedback.

So, what do I mean by this? You know, the more someone feels like you’re evaluating them and quantifying their performance, you want to give them ratings on a scale of, you know, 1 to 5, you know, you Skot are 5 and this other person here is a 3. The more they feel this evaluation, you know, even when you set a puzzle and ask them how well it’s working, the more likely they are to want to tell you, you know what? It’s working brilliantly. Let me tell you all about these learnings, right? And they want to show you all the positive numbers about how fantastic everything is. And so, your challenge as a leader is to create that psychological safety where people want to give you the reality from the trenches.

Skot Waldron (35:13.00)
Do you ever advise, this just kind of came out of what you just said, do you ever advise leaders, I mean, to push them, and I know if there’s value in this, to not even report a number. Say, you know what, if your sales team comes in, I don’t want them to tell you how many sales they’ve had this month. Because really, I just want to know how well did it work? What’d you learn? What are you gonna do next?

Do you ever encourage leaders to just have that conversation without the numbers conversation?

Radhika Dutt (35:46.00)
I have not, and here’s why. I do think the numbers are important, right? I really do think that the numbers tell you both leading and lagging indicators are important and sales is a lagging indicator. If all your experiments are working, eventually it’ll show up in your lagging indicators too, right? So, I don’t feel like we should stop looking at those numbers. I think the key to all of this is yes, let’s look at the numbers, but those numbers are tools for insights, not yardsticks for evaluation. I like to just make the team feel like I’m in the trenches with you.

You know something interesting? Andy Grove at Intel, when he was the CEO, he didn’t have a corner office. He had an office that was a cubicle, a standard size cubicle, just like everyone else. Why? Because he wanted to hear the reality from the trenches. He wanted people to be able to challenge his ideas as an equal. This is the kind of environment we need to create, the culture we need to create as a leader. People shouldn’t be afraid to share honest truth with us. And we need to create that sort of psychological safety.

Skot Waldron (36:58.00)
Okay, I’m going to run through some little lightning round questions. You ready?

Radhika Dutt (37:01.00)
Let’s go.

Skot Waldron (37:02.00)
Okay. This might be easy. You probably did some research on that. Who’s a company that actually gets this right?

Radhika Dutt (37:13.29)
Oh my God, that is a really tough one. Who’s a company that gets this?

Skot Waldron (37:18.00)
Because it’s so many get it wrong? Is that, is that why it’s so hard?

Radhika Dutt (37:22.29)
That’s the reality. I think there’s a company I’m working with right now, Signal Ocean. I feel like we’ve worked together long enough that yes, we are getting it right. There are other companies too. I’ll tell you once where I felt like I had psychological safety in my group, right? In the broadcast division at Avid Technology, there was the head of broadcast, David Schleifer. He did it right.

We weren’t focused on targets. We had numbers actually. We had numbers, we had targets, but he wasn’t focused on targets. We focused on the puzzle. And I find that a lot of amazing leaders who do this right, do it out of intuition. And the whole reason I created this framework is so that we are able to do this in a systematic way, not just through intuition.

Skot Waldron (38:13.00)
What’s the worst leadership advice about goals that you’ve ever heard?

Radhika Dutt (38:20.12)
Set aspirational goals that you can never hit because that’s what motivates people. It is wrong on so many levels. There’s nothing right about that statement through scientific research.

Skot Waldron (38:31.00)
So, the Big Hairy Audacious Goals, the (BHAGs), you’re not a BHAG fan?

Radhika Dutt (38:36.00)
Bullshit.

Skot Waldron (38:40.00)
So, what do they do psychologically to us? Why don’t we like those?

Radhika Dutt (38:45.00)
Because it turns out that it’s not motivating at all to have goals that you can never hit. That’s one. Two, it creates really perverse incentives where especially if you have a stretch goal and you’re this close to hitting it, it creates unethical behavior. And it sets goals, especially when they’re on it. An example of this is Google Chrome.

And Google, in fact, got hit by the biggest fine from the European Commission to date because of their monopolistic behavior. And it was because of OKRs that were set that were entirely too aspirational.

Skot Waldron (39:23.00)
That’s amazing. Okay. Good thoughts on that. We can have a whole podcast about that one.

What’s harder? Should we unlearn bad habits or building new ones? Which one’s harder?

Radhika Dutt (39:37.00)
I think both are equally hard actually, because unlearning bad habits is like saying, I want to create organizational change and create transformation. Transformation is hard, change is hard. And relearning good habits, that’s the same thing in terms of transformation. So, my advice is to do the two things together, not just talk about unlearning bad habits, but what do you replace them with? And if you’re going to do transformation, you know, being able to explain the “why” behind it and in which case you should both share what is the bad habit we want to unlearn and what is the good habit we want to create.

Skot Waldron (40:13.00)
What’s a metric that you hear from companies that you would retire forever if you could? I never have to hear another company talk about that stupid metric. It’d be great.

Radhika Dutt (40:23.826)
User engagement. Oh my God.

Skot Waldron (40:16.00)
You don’t like that one, huh?

Radhika Dutt (40:28.00)
It is such a flawed metric because it’s something you can chase in the short term, and it absolutely kills your company in the long term. If you, if you just optimize for that one metric. I’ll give you an example. The entire dating industry has been ruined by this one solitary metric. Think about Tinder, swipe left, swipe right, optimized for user engagement in the short term. It created a toxic dating environment in the long term. And now the entire dating industry is in a slump because they copied the swipe left, swipe right. And gamification has toxified intimacy.

Skot Waldron (41:11.00)
Finite mindset right there, right? Finite like the short term, sacrificing the long term for the short term.

Radhika Dutt (41:20.00)
Exactly. And oh my God, we’re doing this with AI because there was just an article this morning about how teenagers are using AI for both therapists therapy sessions, but also to find companionship relationships. We’re optimizing for user engagement and the effect this is going to have on society. It scares the shit out of me.

Skot Waldron (41:45.00)
I was talking to somebody, one of my guests, about this very thing and the statement was, AI can never love you. Right?

Radhika Dutt (41:57.00)
It will pretend to.

Skot Waldron (41:59.00)
It will pretend to. Totally pretend to. I’ve caught it doing that. I’m not trying to love me, but you know, doing other things where I’m just like, are you serious? It’s like, no, I can’t actually do that. You know, it was about empathizing. I asked the kid, it empathized with me and it said yes. And, I actually got it to, like admit that no, it can actually do that. So, I was arguing with it. I love my AI, but I don’t think it’s can empathize with me.

Okay. One more, a book. Other than your own, that has changed the way you think about process.

Radhika Dutt (42:35.00)
That has changed the way I think about process.

Skot Waldron (42:37.00)
Or leadership. Go throw in.

Radhika Dutt (42:40.00)
One book I really like is Amy Edmondson’s Right Kind of Wrong. I really like that because it gives you the right way of thinking about failure. But what I found missing was a framework for how do you actually do this in companies? And so, yeah, I feel like what I’m working on next, this book that I’m working on is sort of a compendium to this right kind of wrong.

Skot Waldron (43:09.00)
Well, that’s a beautiful segue. What is your new book? Tell me about it.

Radhika Dutt (43:14.00)
So, the new book that I’m working on is exactly about this, Why Goals and OKRs Backfire and what actually works. Traditional publishing takes a while, so it won’t come out until the end of 2026, early 2027. But in the meanwhile, our listeners can download the free toolkit. You can go to radicalproduct.com and there is the OHLs toolkit. And I’ll send it to you, and you can include that link.

And by the way, since I’m working on the book as we speak, when our listeners use this approach, they’re welcome to share their experience with me. Just reach out to me on LinkedIn. And I would be very happy to perhaps include this as a case study if it makes sense.

Skot Waldron (44:01.00)
Wow, we could be immortalized in your book. That’s fun.

Radhika Dutt (44:08.744)
It’s a fun project to work together on.

Skot Waldron (44:10.00)
Yes, it is. Yes, it is.

Well, thank you so much for this. Thank you and thank you for enduring my questions. I like to be, you know, a little skeptical and like push back a little bit. Um, I think some of my listeners were probably having the same questions I was. And so, I appreciate you answering them and being, you know, being a, being a champ about it. That was, that was really good. So, thank you so much for serving me, serving my audience. I appreciate it.

Radhika Dutt (44:36.00)
I love the insightful questions. I think this is the kind of conversation we need to have.

Skot Waldron (44:44.494)
Okay, I hope you’re thinking, rethinking, reinventing, reimagining what your business could be like, those weekly meetings that you have, whether it’s a sales meeting, a project management meeting, whatever meeting that you’re having that month, that week, to measure the progress of your company. I hope you’re gonna rethink your approach in those meetings.

And again, it doesn’t have to be a massive things. And my guest that I had previously, Ashley. She talks about that idea of, you know, sometimes it’s not that we have to create this monumental shift of our thinking right now and do this thing. Sometimes it’s the incremental steps. What can we do right now that’s the smartest, the fastest, the cheapest next step I can take in order to make progress. And that’s sometimes what it is. If it’s something little, something small that you can do to start creating a proof of concept that this is something that we want to do here. Goal setting. I love it. It creates anxiety, heaviness, fear, puzzles, create curiosity, growth. What is the next step for us? That type of thinking.

And these three questions, they’re so good, y’all. How well did it work? What did you learn? What will you do next time? How well did it work? What will you learn? What will you do next time? And those get deep, those get actionable, those get into the methods and the framing up of solving the puzzle. So, get out there, solve some puzzles. We don’t need more fear. We don’t need more, you know, that feeling inside of our organizations. Okay, we need more curiosity. We need more growth. We need more imagining of what could be.

If you want to find out more information about me or check out the show notes where there’s going to be more information and links to the things referenced in this episode, visit skotwaldron.com. And lastly, I’m asking for a little bit of love, just a little bit. So please take a moment, follow, rate the show. The algorithm is like that; it helps me get the word out. I really appreciate it.

Thank you. And until next time, stay Unlocked.