10 differences between OKRs and SMART goals and when to use them
Goal-setting is key to running an effective team. Without it, your employees are doomed to wander aimlessly into overtime. That’s why goal tracking is one of the two primary purposes of our employee check-in. We support SMART goals and OKR, but there are several key differences. So you should 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. This matters because helps to ensure people know what they’re doing. In order to highlight the differences between goals and OKRs, let’s start with basic definitions.
The "SMART" letters form an acronym that stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. SMART goals are well-defined objectives that are designed to be clear, actionable, and results-oriented.
Each element of the SMART framework contributes to a comprehensive goal-setting process:
- Specific: Goals are clear, precise, and unambiguous, outlining exactly what needs to be achieved.
- Measurable: Goals include quantifiable criteria that allow progress and success to be tracked objectively.
- Achievable: Goals are realistic and feasible within the given resources and constraints.
- Relevant: Goals are aligned with the broader objectives of the individual, team, or organisation.
- Time-Bound: Goals have a specific timeframe or deadline for completion, creating a sense of urgency and accountability.
Strengths of SMART Goals:
Clarity: SMART goals leave no room for ambiguity, ensuring everyone understands the intended outcomes.
Focus: The framework helps in prioritising goals and minimising distractions.
Accountability: Clear criteria and deadlines hold individuals accountable for their performance.
Alignment: SMART goals can be aligned with larger organisational objectives.
Weaknesses of SMART Goals:
Rigidity: The strict criteria might not accommodate dynamic or creative projects.
Singular Focus: SMART goals may not encourage the pursuit of broader objectives.
Limited Feedback: The framework doesn't inherently promote ongoing feedback and adaptation.
Objectives and Key Results (OKRs): OKRs are useful for blending qualitative information with quantitative results. With them, you can tie otherwise nebulous contributions to easy-to-understand statistics. For example, you might have the objective of increasing web traffic by at least 50%. You could achieve that through the results of a full website re-design, re-vamped SEO, and a new virtual ad campaign.
OKRs (Objectives and Key Results):
Regarding OKRs, they involve setting high-level Objectives, which define ambitious and aspirational goals, and Key Results, which are specific, measurable milestones that indicate progress towards the Objectives.
OKRs are characterised by their focus on stretching beyond the current capabilities:
- Objectives: Inspiring and challenging goals that provide direction and purpose.
- Key Results: Quantifiable and time-bound measures of progress towards the Objectives.
Strengths of OKRs:
Ambition: OKRs encourage bold thinking and striving for significant accomplishments.
Flexibility: OKRs allow for adapting to changing circumstances and priorities.
Alignment: The framework can align different teams and individuals towards shared goals.
Feedback and Learning: OKRs encourage regular assessment, learning, and course correction.
Weaknesses of OKRs:
Over-ambition: Setting overly ambitious goals can lead to burnout or unrealistic expectations.
Complexity: Managing numerous OKRs might become overwhelming or dilute focus.
When to use SMART goals and when to use OKRs
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.
- Bring together disparate contributions from different parts of the organisation.
- Show your employees how their work contributes to the success of the business as a whole.
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 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." On the other hand, 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 are better for setting sub-goals
SMART Goals are what we informally refer to as "chunking." SMART Goals are designed to be manageable by nature to minimise job stress. Some tasks are too big to handle in one sitting. That usually means you should break them down further 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? One of their biggest benefits is to make it much clearer to employees just how much impact their contributions have. You can connect company objectives to direct and indirect key results from personnel across your business. That gives your people a sense of involvement to take pride in, which is great for keeping them engaged!
4: SMART Goals focus on the objective, not the method
One of the biggest differences between goals and OKRs is that, whereas OKRs involve setting both an objective and the means of reaching it, the focus of SMART Goals is a bit simpler. This type of goal-setting doesn’t pre-determine how you approach a given task. Instead, completing the tasks helps you to achieve your final goal, step by step.
5: SMART Goals are more adaptable to change
So, as you might expect, OKRs tend to be much more rigid. Everyone contributing to the same OKRs means that it’s harder to change those objectives further down the line. But SMART Goals are designed to be shuffled around as needed. That makes them the perfect method when something might change last-minute.
6: Objectives are often much more specific than goals
This isn’t exactly a hard rule. However, one of the differences between goals and OKRs is that 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 setting a target figure or percentage. It’s not that SMART Goals can’t have specific targets though. It's just that OKRs tend to work best with that level of detail.
7: SMART Goals are better for personal objectives
Relying on OKRs all the way down can create a muddle. That's one reason why we're talk about Hybrid goals. They’re great for bringing the work of different people together. But if someone’s just working by themselves, SMART Goals tend to be an easier solution than OKRs. Their adaptable nature is better for when you don't have to check with others before you alter the workload.
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 need to do. They'll also know what impact it’ll have. And last but not least, they'll know exactly whose day they’re ruining if they don’t do their bit on time.
9: OKRs are an evolution of 1950’s MBO
Decades ago, Peter Drucker proposed the now outdated Management By Objectives (MBO) model. But in a way, OKRs are a modern improvement on Drucker's concepts. His intention was to prevent managers being caught in an ‘activity trap.'
This is because failing to delegate would distract them from their company’s wider vision. Experts may consider Drucker's approach to be flawed, but it laid the basis for the more refined OKR model we know today.
10: SMART Goals definition dates back to the 80’s, but goes 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 author Elbert Hubbard. He suggested that people failing in their efforts simply weren’t putting energy into their goals in an effective manner, rather than lacking intelligence, courage or commitment.
Want to know more about how OKRs can help you align strategy and employee performance? Grab a copy of our best practice guide: How to set OKRs that actually work 👇