All companies have targets, and they all have different ways of establishing what kind of ambitious objectives they want to reach.
Sales teams set specific goals based on forecasting results, data, and historical guidelines. Business leaders set goals for employee performance based on engagement levels and productivity. Even individuals set their own specific way of establishing new targets.
When it comes to choosing between OKRs vs smart goals, it’s easy to get confused. After all, both are measurable and engaging ways of pushing people toward specific outcomes. Here’s what you need to know about the difference between OKRs and smart goals.
What are OKR Goals? Defining the OKR
To understand the difference between OKRs vs Smart Goals, the first thing you’ll need to do is define both concepts. The term “OKR” in the business world stands for “Objectives and Key Results”. Setting OKRs is a collaborative strategy for establishing specific targets in a company.
OKRs are designed to be challenging. They constantly push employees to achieve new objectives, keep staff motivated, and boost internal inspiration. They’re also inherently collaborative. OKRs are set by all members of a team, rather than being chosen by business leaders.
The core components of an OKR are the “objective” and the “key results”. The objective highlights the target you want to achieve, such as “Improving customer relationships”, while the key results look at how you’re going to measure whether you’ve achieved your target. For instance, in the case of improving customer relationships, you might measure customer satisfaction scores and retention.
What are SMART Goals?
SMART Goals are another form of goal-setting methodology, which involves setting targets that demonstrate five key characteristics. SMART goals should be:
S: Specific: Highlight well-defined objectives with clear terminology
M: Measurable: Easy to track with the use of KPIs and metrics
A: Attainable: You should be able to designate a specific person to the task or goal.
R: Realistic: The goal should be reasonable for the abilities of the team or person
T: Time-bound: There must be a clear deadline by which you achieve the goal
For instance, a SMART goal related to lead generation might be: We want to increase the number of leads we generate for our sale event by 20%, within the next 3 months.
OKRs vs Smart Goals – What is the difference?
So, what’s the difference between Smart goals vs OKRs? Both are goal-setting techniques focused on driving teams toward specific outcomes, but there are some core differences between the two methodologies. Most notably:
SMART Goals can be less challenging: A core feature of a SMART goal is that it should be “realistic”. While it’s also important for OKRs to be realistic, they can also be a lot more ambitious, as they’re designed to inspire and motivate teams. Companies pursuing OKRs rarely expect to achieve more than 70% of their target.
SMART Goals are objective focused: With SMART goals, the focus is on clearly outlining the objective. While it’s essential for the results of the goal to be measurable, companies and teams don’t necessarily outline what kind of metrics and KPIs they’re going to measure to determine whether they’ve achieved their goal. With OKRs, the Key Results are highlighted.
SMART Goals are more of a guideline: OKRs are frameworks for goal setting which help to outline exactly what steps companies are going to take to achieve a target. Alternatively, SMART goals are guidelines for how goals should be set to ensure their achievable.
How to Create a Smart OKR
While Smart Goals and OKRs are a little different, they don’t have to be completely separate. Rather than using an OKR as an alternative to Smart goals, companies and business leaders can choose to combine the two. To do this, all you need to do is ask yourself some questions when defining your OKR. For instance:
Is it specific? Does your OKR clearly outline what your employees or team members need to achieve? Is the language used easily to follow, and can your team members understand exactly how their efforts are going to be monitored and measured?
Is it measurable? All OKRs should be measurable, so this is relatively easy. Make sure you have a clear set of metrics in place for how you’re going to track your success.
Is it attainable? Does everyone in your team know what their role is going to be in achieving the key objective? Are the resources you need to achieve your goals in place, and do you have the right initiatives mapped out for all of your staff members?
Is it realistic? While OKRs should be ambitious, they should also be at least reasonably realistic. Your employees should be able to envision themselves achieving the target, or they’re more likely to lose their motivation.
Is it time bound? Can you set a specific date for when you want to achieve your goals? How will you check your progress over time and implement milestones?
For instance, a smart OKR might be: “We want to increase the number of prospects we bring to our site by 20%, monitoring traffic numbers and repeat visitors from all avenues. We hope to achieve this goal in the next 3 months.”