The 4 Secrets of OKRs That Actually Work

The 4 Secrets of OKRs That Actually Work [CFRs]

9 min read


In isolation, goals are simply to-do list items. That’s where OKRs and CFRs — your secret to humanizing and aligning your goal-setting process — come in.

To take advantage of the power of OKRs, you’ve got to integrate them into your continuous performance management processand your everyday. We’ll show you how.


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The 4 Secrets of OKRs That Actually Work


What are Objectives and Key Results (OKRs)?

Objectives and Key Results (OKRs) are a goaling method critical for organizational alignment

Objectives are high-level goals that define where a business wants to go. Think about objectives as a destination. Where do you want to be when you reach your goal?

Key results are the directions you use to reach your destination. Key results should be quantifiable or measurable in some way.


Who developed OKRs?

The OKRs management method was developed by Andy Grove, Hungarian-born American engineer and businessman, and former CEO of Intel.

Because of his influence in the global electronics manufacturing industry, Grove came to be known as one of the great business leaders of the 20th century, as well as “the guy who drove the growth phase” in Silicon Valley. Grove used an OKR cycle to align all levels of an organization with the overall company goals


How do OKRs work?

OKRs are critical for organizational alignment. Here’s how they should be working at your company:

At the highest levels in the organization, leaders set the company’s objectives. (These are high-level aspirations, tied to the company’s quarterly and/or annual goals.) Then, those objectives are broken down into key results. These are time-bound, measurable, outcome-based benchmarks that indicate progress toward the goal.

In isolation, goals are simply to-do list items.

So how does this drive alignment?

Once the company defines its high-level OKRs, each department identifies the role it can play in achieving the company’s objectives. Then, each team and team member create their own OKRs to define and measure progress toward that objective. So every team member, from the bottom up, has a clearly defined and aligned role in achieving the company’s high-level goals.

At the end of the day, the OKR method empowers organizational leaders to take an aspirational objective and break it down into a set of measurable outcomes, then track progress in a measurable, verifiable, and scalable way.

(🚦 Just as a side note, if your company’s goal process is not this aligned, that’s a problem — and we can help. Check out our free online Master Class in Creating a Company Goals Program. You’ll receive 7 emails full of videos, resources, tips, templates, and more to overhaul your company goals process for maximum efficiency and alignment.)

Example of a company-level OKR

For example, your company may set an objective to increase employee retention next year. It’s important that the entire organization is aligned, because the increase in retention will impact your company culture, productivity, and the overall bottom line. 

Since there are many factors that impact employee retention, the next step is to determine the key results. What are some specific, measurable outcomes that would indicate whether or not retention is on an upward trend? Here are some samples:

  • Voluntary turnover is reduced by 15%
  • Exit interviews are conducted with 100% voluntary terminations
  • 100% of the workforce participates in quarterly performance reviews

If the objective is the big, shared outcome you want to see, then key results are the clear criteria that must be met by various departments, teams and individuals along the way in order to achieve it.

Larry Page, co-founder of Google, credits the OKR methodology with Google’s successful growth. “OKRs have helped lead us to 10x growth, many times over,” Page wrote in the foreword of John Doerr’s Measure What Matters. “They’ve kept me and the rest of the company on time and on track when it mattered the most.”


Want to dive deeper into OKRs? Check out
Objectives and Key Results (OKRs) Explainedobjectives and key results OKRs explained


So why aren’t our OKRs working?

If you’re reading this article, chances are, your company’s OKRs aren’t driving the kind of alignment and change you want. Too often, we set OKRs in a vacuum, without taking the time to align and connect with those around us. And when we don’t integrate them into our performance management processes, they become to-do list items, rather than guiding forces.

So how do we fix OKRs?

By making them more human, and bringing them into our everyday.

Here’s how we fix them.


What are Conversations, Feedback & Recognition (CFRs)?

Meet your alignment and humanizing super toolset! Conversations, Feedback, & Recognition (CFRs) is a workplace model that brings OKRs into the company culture so that they can be realized at their maximum potential.


Who developed CFRs?

In his book Measure What Matters, American investor and businessman John Doerr added to the OKR framework by introducing Conversations, Feedback and Recognition, or CFRs. Doerr attributes his success in business, which includes a net worth upward of $7 billion, to his focus on setting goals, and tracking them with OKRs and CFRs.

CFRs add a human element to the OKR system by providing an organized way to motivate individuals and teams. Doerr described CFRs as “giving OKRs their human voice.”

 

CFRs give OKRs their human voice.”

In order to meet ambitious goals, it’s likely many employees will need to develop new skills. Conversations, feedback and recognition help them do that.

Since CFRs may seem nebulous at first, we’ll start by clearly defining each term in a management context. Then, we’ll follow it up by outlining the best practices for implementing your own CFRs. And as a bonus, we’ll introduce you to Incentives, the secret weapon that ties it all together.


Conversations

Definition: a verbal exchange between manager and employee that drives performance, covering employee development, engagement, behaviors and competencies.

Few things are bigger drivers of success than a positive manager-employee relationship. And positive relationships are based on mutual trust, which is built and maintained through frequent and authentic conversations. 

Conversations support OKRs and other business goals by providing a safe place for ongoing progress updates. Plus, when OKRs are part of the ongoing conversation, they stay top-of-mind, ensuring they don’t fall to the back burner until the goal cycle ends.

4 best practices for having effective conversations

  1. Be consistent. Don’t wait until there’s an urgent need to have an important conversation. Instead, schedule regular 1-on-1 check-ins on a weekly or biweekly basis.
  2. Co-create an agenda. Minimize the mental labor required to have an intentional conversation. Just make it the same every time by using an agenda.
  3. Listen. Conversations are, by nature, bidirectional. Listen just as much as — or better yet, more than — you talk.
  4. Up your EQ. Emotional intelligence is foundational to good communication. Learn to be direct, empathetic and non-defensive. This will greatly improve your ability to build trust through authentic conversations.

2 examples of how to use conversations with OKRs

  1. “Last week you mentioned feeling stuck in meeting your key result of increasing your individual sales by 10% by the end of this month. How’s that going? Have you tried the strategy we talked about?”
  2. “I know you’re working toward our team objective of increasing brand awareness. Let’s take a look at our marketing analytics to see how your new blog posts are contributing.”

Want specific examples?
OKR Examples by Industry and TeamOKR examples - objectives and key results for the workplace


Feedback

Definition: Communication up, down, and across organizational lines that assesses behaviors and outcomes, and guides improvement

Feedback is a response to an individual’s behavior or work product. Though it can initially be uncomfortable to give and to receive, it’s critical for employee growth and direction. Plus, when you integrate feedback into your regular conversations (which you’re definitely having because, although you’re only halfway through this guide, you’re already 100% committed to making your OKRs more human — right?), it actually removes the fear factor. When feedback is as frequent as sneezing or topping off your coffee, it just becomes another part of your day. (We’ve got more info on the power of a fear-free feedback culture here.)

Feedback supports OKRs by providing necessary course corrections along the journey to completion, with the intention of helping individuals and teams grow and develop.

4 best practices for giving effective feedback

  1. Be specific. General feedback such as “Do better next time” is much, much less effective than feedback that points out precisely what someone can do to improve.
  2. Tie feedback to impact. When people are able to see a cause-and-effect relationship between their behaviors and the impact those behaviors have on a broader scale, they’re often able to course correct on their own when needed.
  3. Give feedback in real-time. Give feedback immediately to allow the recipient to process the information while it’s still fresh. That way, they can incorporate any necessary changes into their work.
  4. Stop using the “positivity sandwich.” Many business leaders and coaches buy into the positivity or “sh*t sandwich,” which packages negative feedback between two pieces of positive feedback. But we say — stop! Giving positive feedback is good and necessary. But bundling it with criticism can feel inauthentic and confusing to the recipient. It’s better to keep things clean and clear by focusing on one piece of feedback at a time.

2 examples of using feedback with OKRs

  1. “Blakely, I’m frankly concerned that at this pace you may not hit your KRs on time. And that’ll delay our new brand launch as a whole. Let’s take another look at your timeline and see what we can prioritize.”
  2. “Anjali, I’m impressed with how quickly you’re hitting your KRs. It looks like you’re going to achieve your objectives well before the end of the quarter. So for you to keep growing and learning, let’s think about how you might make those KRs more ambitious next quarter — it seems like these aren’t enough of a stretch.”

Recognition

Definition: The demonstration of appreciation for effort, attitude, and achievement.

Recognition is the single most powerful driver of engagement. Recognition is the single most powerful driver of engagement. 81% of employees say they feel motivated to work harder when their boss shows appreciation. That’s right — just a simple thank you can drive productivity and cut retention. Of the components of CFRs, this is probably the easiest to implement. And it’ll make for a big morale boost right away.

Recognition supports the OKR process by motivating team members to contribute at their highest level. In fact, 81% of employees say they’re motivated to work harder when their boss shows appreciation. Additionally, companies with effective recognition programs see 31% lower turnover, and 41% that use peer-to-peer recognition reported seeing increases in customer satisfaction.

4 best practices for giving effective recognition

  1. Celebrate the small wins. There’s no good reason not to send a quick text, shoot off a Slack message or make a phone call to say “thank you” for a job well done, no matter the size. The cost of your time is small, and the impact is huge! Starting small is the best way to build a culture of continuous recognition.
  2. Make it public. People like being recognized. People love being recognized in public (well, most of them). Technology makes it easy for your team to share appreciation with the whole team. And it’s as easy as a dedicated Slack channel, or by using a peer-to-peer recognition platform.
  3. Be timely and specific. Just like feedback, recognition needs to be timely and specific to be most effective. Give it quickly, and take the time to point out why you’re appreciative.
  4. Enable peer-to-peer recognition. Manager-employee relationships are critical, but so are those among coworkers. Make it easy for your team to share recognition stories with each other by using Kazoo’s all-in-one recognition software.

2 examples of using recognition with OKRs

  1. “Diego, I noticed how much effort you put into getting the brand refresh ready to go this month. Thank you.”
  2. “One thing I’ve known about you for a while, Shaynia, but that I really appreciated this week, is that you always have such a positive attitude. Thank you for bringing your energy to our team day in and day out, and for making the people around you better.”

Learn more in our article:
The Power of Employee Recognition and Rewards


Bonus: Incentives and OKRs

Definition: A reward that reinforces a desired action or behavior.

John Doerr defined CFRs as the all-star tool set. Kazoo adds one more, and we recommend you do, too: Incentives. These custom bonuses encourage employees to participate in activities that drive your company’s culture and goals. This could include attending a webinar or training, giving a presentation, completing a pulse survey, or even participating in your HR team’s wellness program. It’s a light form of gamification that rewards employees for doing things that boost your company. And they can easily be tied to and support your company’s priorities, whether those are OKRs, learning & development, culture, well-being, or social causes.

We use Incentives ourselves at Kazoo (the writer of this article just earned points in our rewards platform for “Breaking a Sweat” with an hour-long yoga practice, for example). And to us, Incentives are a necessary part of the employee engagement flywheel. In this engagement framework, each component supports the others — and keeps your company moving forward.

employee engagement flywheel

4 best practices for supporting OKRs with behavior incentives

  1. Create incentives consistent with your company culture and values. What behaviors do you want to support? Start by listing out your core values and high-level objectives. Then work backward from there.
  2. Update incentives to reflect change. As the world changes, so do your company’s needs. For example, in for the COVID-19 pandemic, we created new incentives for sanitizing your workspace and getting a flu shot. 
  3. Tie incentives to goal-setting. Offer incentives for entering new goals, or for completing them. (At Kazoo, we earn points for goals completed. A nice bonus!)
  4. Ask for feedback. Company culture comes from the people. Ask employees at your company for incentive ideas so that you stay in close step with the culture, rather than seeming out of touch.

2 example incentives to use with OKRs

  1. Set a goal. To get your employees into the mindset of setting and working toward goals, create a bonus for setting goals at the beginning of the cycle. (Bonus: Require employees to align their goals with departmental or company goals.)
  2. Complete a goal. This is a great incentive to offer in the platform. Keep in mind that OKRs are meant to be stretch goals with a 70%-80% success rate, so employees should not necessarily be hitting this one every quarter.

What about SMART goals, OKRs and CFRs?

Does your org love SMART goals? Kazoo does, too. In fact, we advocate that you don’t choose between them. Instead, use the SMART methodology to inform your KRs when you set OKRs.

That’s because these two methodologies aren’t opposed to each other. They serve different purposes. As we explain in our article, How to Set and Use SMART Goals at Work, SMART goals are a formula for writing effective goals. OKRs do the broader work of aligning these goals to organizational and departmental goals.

Dig deeper in our article about SMART goals here.


OKRs and CFRs in continuous performance management

To succeed in today’s world of work, continuous performance management is a must. While OKRs help answer the question “What will we accomplish?” CFRs help answer the question, “How will we develop and motivate our people in order to accomplish it?” 

Together, and in contrast to the traditional (and often dreaded) annual performance review, OKRs and CFRs speed up and simplify the review process, resulting in better communication and a bigger impact.

Want a deeper dive? Learn more in our article, What Is Continuous Performance Management?


Keep goals on target with Kazoo

We hope this exploration of OKRs and CFRs has planted the seeds of transformation in the way you think about goals. We can’t emphasize this enough: goals in isolation are simply to-do list items. You can take full advantage of the power of OKRs by integrating them into your continuous performance management process. And we’re here to help.

Because at Kazoo, we’re passionate about bringing together all the tools you need to make work work better for everyone. That’s why the Kazoo Employee Experience Platform brings performance management and recognition and rewards — including Goals, Feedback, Conversations, Recognition, Incentives, and more — into one simple, easy-to-use platform.

If you’re ready to align, connect, and engage your workplace, check out our Kazoo overview. Or, schedule a personalized demo today.

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