E-Book

Getting Started with

Objectives & Key Results (OKRs)
Best Practices for Implementing OKRs in Your Business
Ideas are precious, but theyre
relatively easy. Its execution
thats everything.
John Doerr, Partner at Kleiner Perkins Caufield & Byers

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Table of Contents

Introduction 4
The Basics. What are OKRs? 5
The Right Fit. Are OKRs Only Useful for Certain Organizations? 8
Setting OKRs. Where to Start? 9
A Closer Look. How Did John Doerr Explain OKRs? 11
More OKR Examples 12
Cadence. How Often Should OKRs Be Set? 14
Teams. How Do OKRs Engage a Multi-Generational Workforce? 16
Measurement. How Should OKRs Be Scored (or Should They)? 18
Human Resources. How Do OKRs Work with Performance Management? 19
Potential Issues. How Can Enterprises Address Them? 21
Input and Tracking 22
Next Steps. How Do Organizations Extend OKRs? 23
About BetterWorks 24

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Introduction
Since the 1950s, business leaders have embraced a variety of
management techniques designed to improve employee performance.
Peter Drucker introduced Management by Objectives (MBOs), a process
during which management and employees define and agree upon
objectives and what they need to do to achieve them. In the early 1980s,
S.M.A.R.T. goals and Key Performance Indicators (KPIs) became popular
methods for organizations to set objectives. Then in 1999, John Doerr
introduced Objectives Key Results (OKRs) to Google, a model he first
learned about at Intel, and revolutionized goal setting. Today, OKRs are
a de facto standard for aligning company and individual goals.

A management methodology that helps businesses focus effort on the

same important issues throughout their organization, OKRs have been
cornerstones to improving operational excellence at industry leaders
such as Intel, Oracle, Google and others. As employees leave these
companies for start-ups and other ventures of their own, from Twitter
and Zynga to LinkedIn, they are bringing the OKRs model with them as
a way to drive organizational alignment.

This e-book is designed to help your organization:

Understand the value of OKRs

Begin to effectively set OKRs
Choose the right OKR software

OKRs
MBOs S.M.A.R.T. John Doerr introduces
OKRs to Google
George Dorans
The Effective Executive S.M.A.R.T. Way
by Peter Drucker
KPIs

1967 1973 1981 1984 1990 1999 2012

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The Basics. What are OKRs?
OKRs are a framework for employers and employees to discuss how
the work of an individual employee is connected to the overall business
strategy. When championed by management and implemented
throughout a business, OKRs help organizations:

Impose disciplined thinking so major goals surface

Inform everyone about whats important
Enable more accurate communication
Establish indicators for measuring progress
Focus effort and ensure alignment

Because they are visible to everyonetop-down, bottom-up and cross-

functionallyOKRs ensure everyone is working toward the same result.

WHAT IS AN OBJECTIVE? WHAT I WANT TO ACCOMPLISH

Objectives should be significant to the company and personally
meaningful, as well as aspirational. They should also be aligned
and supported by the entire organization.

Example: Put a man on the moon by the end of the decade

WHAT ARE KEY RESULTS? HOW I WILL ACCOMPLISH THE OBJECTIVE

Key results should be measurable, limited in number and time-bound.

Example: Build a lunar module weighing

under 40,000 pounds by December 1965

John Doerr, the father of OKRs, talks about goals for

the enterprise.

>> Watch the video

>> Read the Q&A

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 Once-a-year or every six-months feedback is not
frequent enough to meet the ever-changing pace
of business. 1
Paul D. Hamerman and Claire Schooley, Forrester Research

HOW MANY OKRs ARE IDEAL?

Best practices encourage setting four to six objectives and five or
fewer key results for each objective.

HOW SHOULD THEY BE COMMUNICATED?

Organizations foster clarity and transparency by hosting Q1, Q2, Q3
and Q4 company-wide meetings and/or enabling OKRs dashboards
that show individual, team and corporate-level goals with associated
performance metrics.

Q3

1
Forrester Research. Disrupt the Employee Performance Process to Align with Business and Customer Outcomes,
Paul D. Hamerman and Claire Schooley, July 2, 2014.

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HOW DO OKRs FIT WITH S.M.A.R.T. GOALS?

S.M.A.R.T. Goals help remind employees that every goal they set should be:

Specic

Measurable

Attainable

Relevant

Time-bound

But goal setting has evolved since the introduction of S.M.A.R.T. Goals
more than 30 years ago. Best practices are to create specific, measurable,
relevant and time-related OKRs, but rather than always be attainable,
some OKRs should be aspirational.

Companies that are recasting the A from attainable to aspirational

may not always achieve their goals, but they foster greater innovation
by encouraging workers to push their limits. OKRs are more akin to
stretch goalsa little uncomfortable and slightly out of reach.

Beyond S.M.A.R.T. Goals, OKRs also help organizations better answer other
meaningful questions: who is involved with a goal? How does the person
setting goals get feedback and measure progress? Why is a goal important
to the individual and the company?

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The Right Fit. Are OKRs Only Useful
for Certain Organizations?
OKRs are a good fit for all types and sizes of organizations because they
lead to the organizational alignment that drives operational excellence.

LARGE ENTERPRISES
In organizations with many departments, its critical for all members
of the teamacross teams, top to bottom, and across functionsto
be able to provide feedback and input into the goal-setting process.
By making everyones goals transparent and visible, organizations can
attain and maintain alignment. The process of recording operational
goals (e.g., grow revenue, hire employees, etc.) and aspirational goals (e.g.,
how an individual will help the company move into a completely different
space, revolutionize a market, etc.) drives operational excellence. Google
successfully used OKRs to grow from 40 to 40,000 employees. OKRs can
also be effective tools for retaining top talent.

SMALL AND MEDIUM-SIZED (SMB) ORGANIZATIONS

As organizations try to determine market fit or maintain competitive
advantage, OKRs keep employees driving toward the same goals.
SMBs may set and evaluate goals more often than enterprises.

SERVICE FIRMS
In more fluid reporting structures, such as highly projectized consulting
organizations where individuals move between projects, its important to
provide a way for employees to see and support the work being done by
other team membersonsite and offsite.

Activity does not always equal progress. Vision without

operational excellence just becomes a dream. Great
enterprises marry a huge sense of purpose with amazing
operational excellence.
Deep Nishar, former Senior Vice President of Products
and User Experience at LinkedIn

>> Watch the video

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Setting OKRs. Where to Start?

Innovation without
execution is hallucination.
Thomas Edison

The most difficult step for many organizations is committing to the

OKRs process. Businesses should identify an OKRs champion who fully
understands the benefits of the approach and can help teams that may
be having difficulty getting started or staying on track. This person is
often a chief executive, line-of-business leader, operating officer or
human resources professional.

OKRs are a multi-step process. Businesses may choose to roll out the
entire OKRs process at once or simply one step at a time:

Ask employees to individually set OKRs.

Establish a time frame after goals are set (one day, one week, etc.)
during which managers meet 1:1 with employees to review OKRs.
Establish a time frame after goals are negotiated for a larger group
(e.g., all employees in a group) to review and collectively negotiate
departmental OKRs.
Establish a time frame after goals are negotiated by the group
to present OKRs to everyone in the company during an all-hands
meeting.

It is important to start with and keep teams centered on four-to-six

objectives at a time with five or fewer key results for each objective.
Focus will yield the best results for employees at every level.

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 From a practical standpoint, OKRs typically fall into two large buckets:

OPERATIONAL
These goals have to do with a companys metrics, such as product
releases, bookings, hiring, number of customers, etc. They are the
organizations operating drumbeat. Management will typically set
these at the company level while employees set operational goals
at departmental levels.

ASPIRATIONAL
In contrast to operational goals, aspirational goals are bigger picture
ideas about how a company is going to go about changing the world.
These goals set the scene and are designed to help all employees figure
out how they can contribute to the aspirational ideas. Aspirational goals
can come from any level in the organization.

Both sets of represented goals must be as measurable as possible

and measurement should be linked, for example, I will accomplish
this goal by doing x, y and z. When both operational and aspirational
goals are visible, all employees know how a company is oriented and also
understand that thinking big is required. Additionally, some operational
goals may be aspirational because one size does not fit all.

Forrester Research. Disrupt the Employee Performance Process to Align with Business and Customer Outcomes,
Paul D. Hamerman and Claire Schooley, July 2, 2014.

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A Closer Look. How Did
John Doerr Explain OKRs?
When John Doerr talked to Google executives about implementing OKRs,
he offered a football analogy:

General Manager
OBJECTIVE KEY RESULTS
Make $ for 1. Win Super Bowl
owners 2. Fill stands to 88%

Head Coach Head of PR

OBJECTIVE KEY RESULTS OBJECTIVE KEY RESULTS
Win Super 1. 200 yd/game passing attack Fill stands 1. Hire 3 colorful players
Bowl 2. 3 ranked defense in NFL
rd to 88% 2. Get 2 Monday night games
3. 25 yd punt return average 3. Highlight key players

Special News Publicity

Oense Defense Scouts
Teams Sta Agent
OBJECTIVE OBJECTIVE OBJECTIVE OBJECTIVE OBJECTIVE OBJECTIVE
200 yd/game 3 ranked
rd
25 yd punt Hire 3 colorful Get 2 Monday Highlight key
passing attack defense in NFL return average players night games players

KEY RESULTS KEY RESULTS KEY RESULTS KEY RESULTS KEY RESULTS KEY RESULTS
75% completion Less than 3 blocked punts Visit top 25 5 ESPN special Hire 10 new
100 yd passing colleges features cheerleaders
per game

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More OKR Examples
Table 1 is an example of OKRs that a senior executive might set. Because
employee goals typically cascade from management goals, Table 2 provides
examples of line-of-business manager OKRs from various departments
across the business.

OPERATIONAL

Senior Executive OKRs

OBJECTIVES KEY RESULTS

Improve Financial Close three deals over $10M

Performance

Increase Customer Increase upgrade conversions to 10%

Satisfaction Engage customers through features voting (see innovation objective)

Measure Employee Institute bi-annual, company-wide NPS survey

Engagement

ASPIRATIONAL

Senior Executive OKRs

OBJECTIVES KEY RESULTS

Increase Market Move into the Challengers category of the Gartner Magic
Leadership Quadrants (MQs)

Innovation Institute suggest your own feature within product by 2/15

Accelerate Strategic Sign partner agreement to expand into Latin America by Q2

Growth

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OPERATIONAL

Manager OKRs (Various Departments)

OBJECTIVES KEY RESULTS

Improve Financial Enable digital signatures for purchase orders

Performance Add a systems engineer to each proof of concept

Increase Customer Grow per day views to 10,000 by personalizing content

Satisfaction Run quarterly phone blitz campaign targeting top 100 customers

Measure Employee Develop NPS survey by 1/20

Engagement Automate survey distribution and results collection by 2/15
Read out results within 30 days

ASPIRATIONAL

Manager OKRs (Various Departments)

OBJECTIVES KEY RESULTS

Increase Market Meet with Gartner analysts publishing relevant MQs

Leadership Get three reference customers to speak with Gartner analyst

Innovation Trial three new similar product features per quarter, enable
users to vote
Collect results and solicit other ideas
Build most popular features into Q2 product release

Accelerate Strategic Engage with five possible partners

Growth Conduct due diligence by Q1
Work closely with legal to develop contract terms by Q2

Well-developed OKRs are very powerful tools. Employees across the

company, even those located globally, can link their goals to the corporate
goals, knowing that their work is having a direct impact on the success of
the business. Moreover, corporate goals should be inclusive of ideas that are
created at the individual contributor level, which keeps senior leadership in
tune with the organization. For example, at least 60% of objectives at many
companies come from the bottom up because too much top-down dictation
kills motivation and aspiration.

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Cadence. How Often Should
OKRs Be Set?

Q3
Q1
Q2 Q4
Q4

Most organizations work through OKRs quarterly. However, some

companies have been known to set OKRs in monthly or six-week
intervals. It is important to be sure the cadence matches the stage
and culture of the business.

For example, setting OKRs quarterly may be too long for a very early
stage company trying to determine its market fit. It may also be too long
for a unit within a larger company that is working to substantially change
its delivery processes. The reason the interval is important is because
over time, the relevance of goals diminishes in fast-paced environments.

Whether the cadence is six weeks, one month or quarterly, businesses

will typically see huge operational wins when they move from annual
assessments to more frequent goal setting. Moreover, because agility
is a key indicator of business success, companies should consider
providing a way for employees to set, show progress, and get feedback
on goals daily.

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 In Start-Up Speed, Kristen Gil, VP of Business Operations at Google,
explains some of the changes Google instituted to help it operate at
small business speed, even as it grew.

Creating quarterly OKRs has been part of Googles culture since

board member John Doerr introduced the concept in 1999. More
recently, however, weve elevated their importance and are using
the quarterly OKR all-hands meeting (which is led by Larry Page
and other company leaders) as a rallying point for all employees.
Team by team, the leaders lay out their objectives and how theyll
measure success. Afterwards, theyre posted for anyone within the
company to see.

A recent OKR objective for our search team was to improve the
worlds information and make it universally accessible and useful,
which restates and reiterates the companys mission statement.
The key results underneath that objective included metrics and
projects for the quarter, many of which span a number of teams,
ensuring a well-coordinated push toward a shared goal. Having
these shared goals also has the benefit of helping prevent the
formation of silosalways a concern as companies grow. 2

2
Think with Google. Start-Up Speed, January 2012.

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Teams. How Do OKRs Engage a
Multi-Generational Workforce?
Although the Baby Boomer generation dominates the workforce today,
many older employees will retire in the next 10-15 years. The challenge
for businesses is to replace this group that currently holds leadership
positions with new talent that keeps innovating. CEB recently completed
a Talent Report, based on millions of assessments of employees
worldwide. The results (shown in Table 1) identified six motivational
factors that any manager must be aware of to engage and retain a
multigenerational workforce.

In the PWC Millennials at Work report, authors offered six suggestions

to businesses to help ensure they understand the millennial generation
and are acting to attract and inspire the best of them:

Understand this generation Use metrics to segment the

workforce to better understand and address generational
differences and tensions
Get the deal right Ensure everyone knows what is expected
Help millennials grow Understand personal and professional goals
Feedback, feedback, and more feedback Give real-time,
honest feedback
Set them free Provide flexibility yet clear instruction and
concrete targets
Encourage learning Deliver continuous training and development
Allow faster advancement Value results, not just seniority
Expect millennials to go Build churn into business plans 4

OKRs are an ideal way to help organizations manage and keep

generational groups working toward common objectives. By establishing
clear goals and making them visible company wide, everyone on the
team gains a better understanding of what tasks are important to
whom, how individuals prioritize them, what motivates employees
across generations and how the workforce can team to achieve success.

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 BOOMERS GEN XERS MILLENNIALS

WHAT GETS ME OUT OF BED IN THE MORNING?

Power Percentile

30 41 52 55 70

Competition Percentile

30 50 54 59 70

WHAT BRINGS ME BACK THE NEXT DAY?

Autonomy Percentile

30 41 42 57 70

Progression Percentile

30 40 53 59 70

WHAT WILL MAKE ME STICK AROUND?

Personal Principles Percentile

30 32 42 50 70

Personal Growth Percentile

30 32 48 54 70

Table 1: Motivation by Generation Numbers represent percentile ranking

3
CEB. The CEB Talent Report: Big Data Insight and Analysis of the Global Workforce. SHL Talent Measurement, June 2014.
4
PWC. Millennials at Work. Reshaping the Workplace, 2011.

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Measurement. How Should OKRs
Be Scored (or Should They)?
Historically, Google has emphasized the importance of defining scoring
criteria for each key resultand Google takes an ambitious approach to
measuring OKRs. Executives recommend that employees consistently
achieve scores of 60-70%. Individual scores for employee goals are
automatically calculated by a proprietary application.

>> Read about Googles The OKRs model is most effective for businesses that separate the
scoring practices, and OKRs process from the performance evaluation process. Keeping the
how OKRs helped two distinct encourages employees to set aspirational OKRs and work
Google grow from 40 toward them. Tying the two together stunts innovative thinking and
to 40,000 employees. leads to conservative, and sometimes even sandbagging, behavior.

A retrospective look at how employee skills align with

job requirements may be useful, but it doesnt drive the
results that the business cares about. 5
Paul D. Hamerman and Claire Schooley, Forrester Research

Is it critical to assign scores if its a subjective process and one

that could be prone to game playing? Because the achievement of
individual OKRs should not be (and typically isnt) directly related to
a performance review or compensation, scoring OKRs may become
unnecessary. Depending on your company culture, self-assessment
and peer-assessment models may be as effective in goal measurement
strategies. In cases where companies have chosen not to score goals,
employees take time for self-reflection. They think deeply about what
they achieved and did not achieve before setting a next set of goals.

5
Forrester Research. Disrupt the Employee Performance Process to Align with Business and Customer Outcomes,
Paul D. Hamerman and Claire Schooley, July 2, 2014.

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Human Resources.
How Do OKRs Work with
Performance Management?
Although whether to measure OKRs or not may be a topic of debate in
an organization, there should be no question as to whether OKRs should
be tied to performance evaluations. The answer is they should not.

Refactor your performance process so that you can

continuously measure and recognize employees for
achievements and outcomes that drive business success.
Paul D. Hamerman and Claire Schooley, Forrester Research

As a best practice, OKRs should be decoupled from performance

evaluations so individuals feel free to take more innovative risks than
they might otherwise. Separating the two also means employees wont
spend time trying to game the system to reap rewards. Performance
management systems are typically subjective and can be extremely
demotivating. In contrast, OKRs are designed to bring alignment, focus,
better coordination, and sometimes even fun, to companies. 6

6
Forrester Research. Disrupt the Employee Performance Process to Align with Business and Customer Outcomes,
Paul D. Hamerman and Claire Schooley, July 2, 2014.

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The question may also arise as to whether human resources (HR) should
be responsible for the OKRs process in the organization. According to
Josh Bersin, Principal and Founder of Bersin by Deloitte, Deloitte
Consulting LLP, The HR role is a difficult one today because leaders are
being asked to continue to do their job of making sure the business and
employee interactions are fair, in compliance, and dont create risk for
the business. HR professionals are also now being asked to be
innovators. I think HR teams can be great facilitators to their businesses
without having to own every domain.

Although HR may not be the champion for the business, HR staff

can actively help to make the transition to the OKRs process and the on-
going adoption of OKRs a smooth process.

What youre going to find in the really high-performing

companies is that HR is really a people-optimization
function. They are looking at the way people work. The way
they set goals. The way work gets done.
Josh Bersin, Principal and Founder of Bersin by Deloitte

>> Watch the video >> Read the Q&A

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Potential Issues. How Can
Enterprises Address Them?
Inevitably, there will be some trial and error as executives, managers
and employees adopt the OKRs process. Because one size does not
fit all, the OKRs champion should be aware of individuals and teams
finding the most success and those having the least success with OKRs,
and work to understand why. Critical assessment, especially in the first
few quarters of a roll out, and modifications to the process will be keys
to on-going success.

As adoption grows, OKRs champion John Doerr and others recommend

addressing the following potential issues early:

Lack of support across the entire organization For OKRs to be

effective, goals must be supported by the entire organization. Every
team and working group should agree on goals and priorities.
Lack of accountability Just setting goals isnt enough. Goals must
be measurable or have quantifiable targets. From shipping a certain
number of products to hitting a release schedule, teams have to be
able to track and measure the goals they set.
Lack of reality, especially timing Goals should be aggressive yet
realistic. Individuals and teams should stretch, but not to the point
of breaking.
Lack of risk OKRs should not be tied to bonus payments.
Organizations should think about using OKRs to build a bold,
risk-taking culture.

Leaders must evaluate employees holistically by discussing with

employees how they have met their goals, their contributions to the
team, how they have worked collaboratively to drive business value,
and how they have embraced the organizational culture. 7
Paul D. Hamerman and Claire Schooley, Forrester Research

7
Forrester Research. Disrupt the Employee Performance Process to Align with Business and Customer Outcomes,
Paul D. Hamerman and Claire Schooley, July 2, 2014.

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Input and Tracking
When an organization has fewer than 10 employees, setting and sharing
OKRs in a Google doc or an Excel spreadsheet may be practical. Yet as a
business grows, it requires a more robust enterprise goal-management
platform to capture, share and track progress toward key objectives
and results.

Any business evaluating software to track OKRs or manage goal setting

should ask a potential provider whether its offering includes the
following critical goal management capabilities:

1. Does the software support both bottoms-up origination of OKRs

with individuals, as well as top-down, cascading processes where
managers define OKRs for their direct reports?
2. Can OKRs cross teams to enable horizontal alignment/flag
dependencies or must they be set up separately for each team as
dictated by the organizational chart?
3. How easy is it to access updated OKRs? Are there mobility options?
4. Can anyone see a history of how OKRs change over time? Is
charting available?
5. How does the software encourage behaviors, such as frequent
check-ins, to keep goals and progress fresh?
6. How easy is it for colleagues to support, collaborate, encourage and
comment on one anothers goals?
7. What engagement techniques exist in the software to drive adoption,
usage and re-engagement? Are there notifications, social gestures
and feedback loops?
8. What dashboard capabilities exist to serve as an early-warning
system for the company? At the executive level, the manager level,
and individual level, what types of notifications are available?
9. What examples of enterprise-scale deployments has the
software served?
10. Does the software try to combine many other features, or does it
really solve the OKRs problem deeply? And most important, will
employees actually want to use rather than it being forced on them?

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Next Steps.
How Do Organizations Extend OKRs
to Further Operational Excellence?
Todays best practices for managing and tracking business objectives
include modern Goal Science thinking based on five pillars:

Connected Supported Progress-Based Adaptable Aspirational

Vertical/horizontal Working transparently Frequent, measurable Flexibility to respond Greater achievement
alignment and with praise and feedback and to changing goals and encourage
clarity recognition frequent wins and business needs excellence

Modern goal-setting platforms support these practices by ensuring goals

are easy to set, manage, track and see throughout an organization.

OKRs are a timeless framework, but the methods for

implementing them are antiquated. They need to be
modernized.
Kris Duggan, CEO and Co-founder of BetterWorks

>> Listen to Kriss conversation with

Upstart Business Journal

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About BetterWorks

BetterWorks is an enterprise goals platform trusted by high performing

companies to easily set, measure and cross-functionally align
goals. Rooted in the Objectives and Key Results (OKRs) method for
goal setting, BetterWorks uses Goal Science principles to inspire
employees to reach their full potential with better clarity, direction
and visibility on work that matters.

Founded in 2013, the company is headquartered in Palo Alto, CA,

with an office in New York, and is privately held and funded by venture
capital firms Kleiner Perkins Caufield & Byers and Formation 8.
BetterWorks has an elite team with talent from industry innovators
including Palantir, Yammer, Box, Cisco and Salesforce.com. To learn
more about BetterWorks, visit www.BetterWorks.com.

2015. BetterWorks. All rights reserved.

170 University Ave, Suite A, Palo Alto, CA 94301 | 844.438.2388 | hello@betterworks.com

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