10 differences between OKRs and SMART goals and when to use them.
Whatever your preferred method, goal-setting is a vital aspect of effective team management. Without it, your employees are doomed to waffle aimlessly into overtime. That’s why objective tracking is one of the two primary features of our employee check-in, which offers managers a choice of SMART Goals or Objectives and Key Results. But there are several key differences between goals and OKRs, so take the time to figure out which works best for you.
What are OKRs and SMART Goals?
Before you move forward, you’ll need to figure out the most effective goal-setting framework for you and your team. A shared framework makes it that much easier for you to keep employees engaged and ensure people know what they’re doing. In order to highlight the differences between goals and OKRs, let’s start with basic definitions.
SMART Goals: While there can be some ever-so-slight variations on the acronym depending on where you look, SMART stands for Simple, Measurable, Attainable, Relevant and Time-bound. Those are the criteria a goal needs to satisfy to be valid. In other words, this form of goal-setting is excellent for making sure that you assign manageable workloads to your team with minimal confusion.
Objectives and Key Results (OKRs): OKRs are useful for blending qualitative information with quantitative results, allowing you to tie otherwise nebulous contributions to easy-to-understand statistics. For example, you might have the objective of increasing web traffic by at least 50%, and achieve that through the results of a full website re-design, re-vamped SEO, and a new virtual ad campaign.
10 key differences between goals and OKRs
SMART Goals and OKRs can seem very similar at first, but if you take a closer look, you’ll see that they’re actually quite different in terms of approach. Let’s look at how they vary, and figure out which one appeals to you the most.
1: The meaning of SMART Goals is more malleable: OKRs always means Objectives and Key Results, but the SMART acronym is more susceptible to change. So, M might be “motivated” or “meaningful,” whereas A might be “achievable,” “assignable,” or “actionable.” The general balance of meanings usually stays the same, but what the acronym stands for can sometimes be an indication of management priorities.
2: SMART Goals can be broken down into sub-goals more easily: SMART Goals are a formal implementation of what we informally refer to as “chunking.” SMART Goals are designed to be manageable by nature to minimise job stress. If tasks can’t be dealt with in a reasonable length of time, that usually means you should go back and break them down into smaller tasks.
3: OKRs help align employee tasks to company objectives: With SMART Goals being as accessible as they are, you might wonder, what are OKRs good for? Well, one of their biggest benefits is the fact that they make it much clearer to employees just how much impact their contributions have.
Company objectives can be connected to direct and indirect key results from personnel across your business. This is great for keeping employees engaged and productive, because it gives them a sense of involvement that they can take pride in.
4: SMART Goals focus on the objective, not the method: One of the biggest differences between goals and OKRs is that, whereas OKRs involve establishing both an objective and the means of reaching it, the focus of SMART Goals is a bit more one-sided. This type of goal-setting doesn’t pre-determine how you approach a given task. Instead, progress is achieved by completing sub-goals that help you to reach your final goal.
5: SMART Goals are more adaptable to change: So, as you might expect, OKRs tend to be much more rigid. The fact that people across a team or business contribute to the same OKRs means that it’s harder to change those objectives further down the line.
By comparison, SMART Goals are made to be flexible. There’s usually the option to break a task down into smaller objectives. And if not, the fact they’re usually set for individuals or small teams means that it’s easier to change them or throw them out if circumstances change.
6: Objectives are often much more specific than goals: This isn’t a hard rule, but one of the differences between goals and OKRs is that, in general, objectives tend to be more targeted than goals. So, for example, a goal might simply be to increase company profit margins by the final quarter. An objective would go a step further by specifying a target figure or percentage. It’s not that SMART Goals can’t have specific targets though, just that OKRs tend to work best with that level of specificity.
7: SMART Goals are better for personal objectives: If you rely on OKRs all the way down, things can get a bit muddled. They’re great for bringing the work of different people together, but if someone’s just working by themselves, SMART Goals tend to be the easier and more flexible solution.
8: OKRs are most effective on the team and company levels: Group work can easily become a massive headache if you don’t keep people organised. That’s where the flexibility and loose feel of SMART Goals can let you down. With OKRs, everyone knows what they’re supposed to be doing, what impact it’ll have, and exactly whose day they’re ruining if they don’t do their bit on time.
9: OKRs are an evolution of 1950’s MBO: In a way, OKRs are a modern improvement on the outdated Management By Objectives (MBO) model proposed by Peter Drucker in the 1950’s. His intention was to prevent managers being caught in an ‘activity trap’ and being distracted from ‘their company’s wider vision.’ While the approach is now considered flawed, it laid the groundwork for the more refined OKR model we know today.
10: SMART Goals were defined in the 80’s, but go back a bit further: SMART Goals also had their formation in the 20th Century. The acronym was first put to paper by George T. Doran, in a piece titled ‘There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives.’ But the general concept actually goes back to 19th Century philosopher Elbert Hubbard, who suggested people that failing in their endeavors simply weren’t putting energy into their goals effectively, rather than lacking intelligence, courage or commitment.
When to use SMART goals and when to use OKRs?
So, now that we’ve been over the various differences between goals and OKRs, let’s quickly recap which is the most effective goal-setting framework in different situations.
Use SMART Goals when:
- You’re assigning solo projects.
- You want to encourage employee autonomy.
- You’re helping employees to plan for personal development and skills training.
Use OKRs when:
- You need to foster collaboration in your team.
- You need to bring together disparate contributions from different parts of the organisation.
- You want to show your employees how their work contributes to the success of the business as a whole.
Get a clearer measure of how engaged your people are with a simple 10-minute employee check-in.