June 25, 2021
OKRs for Business or SMART Goals: What Would you Choose?
For any organization to achieve operational excellence, effective goal-setting is quite essential. You may think about whether there is an ideal approach to setting goals or not. There are certainly different ways to set goals, but the strategy you opt for makes all the difference. The traditional goal-setting method lacks alignment and transparency, making it difficult for employees to accomplish their targets.
Most organizations prefer building a team that is less task-oriented and more outcomes-led in the modern business world. So, setting SMART goals may not best fit organizations, and they may need to use Objectives and Key Results (OKRs).
SMART Goals: What are they?
In 1981, George Duran coined SMART (Specific, Measurable, Attainable, Relevant, Time-bound) goals. Most of the times, employees don’t know how to set objectives, and therefore, organizations provide them with a particular criterion which is:
- Specific- Goals must give clarity to everyone within the organization in which direction to move
- Measurable- Every objective must be linked to quantifiable results
- Attainable- Goals must be set in a way that they are ambitious yet achievable, thus driving employee engagement
- Relevant- Goals created should be in relevance to the expected business results
- Time-bound- Set a deadline for every goal to review progress timely
SMART Goal Example-
Drive Website Engagement by 20% till June
The above goal fulfils the SMART goal criteria where improving engagement indicates the specific objective, and 20% states the metric. Since 20% is not a considerable increase, the goal is achievable. The goal is time-bound as it needs to be completed by June. It even shows relevance in a broader picture as increased website traffic also leads to more sales and improved business growth.
OKRs: What are they?
In 1999, John Doerr popularized OKRs in business as a robust goal-setting and performance management framework. OKRs comprise two things- objectives and key results.
- Objectives– They represent the simple, bold, and ambitious goals that you may want to achieve
- Key Results– They reflect the indicators to measure how effectively you can accomplish the goal. Key results are quantifiable metrics that may change as you progress towards meeting the goal.
Company OKR Example-
Objective: Expand business in the European market by the end of 2021
Key Result 1: Hire 20 new employees to manage sales and customer success
Key Result 2: Launch 5 new geo-targeted marketing campaigns by Q2
Key Result 3: Onboard 50 new customers in the EMEA market by Q3
The above example defines the company-level goal to expand business in the European market. So, to achieve this, expected key results may include hiring twenty new employees to manage sales, launching five new marketing campaigns to target the EMEA markets, and onboarding fifty new customers in the region to increase business revenues.
Andy Grove, Father of OKRs, rightly said, ‘ There are so many people working so hard and achieving so little.’ So, if you want to enable success for your organization, start using OKRs to drive alignment towards common goals, execute an agile strategy, and achieve improved business outcomes.
Also Read: OKRs in Business: Good OKRs Vs. Bad OKRs
How are SMART Goals and OKRs Different?
Though both the goal-setting approaches seem identical, there are still different. OKRs enable businesses to set shared goals at the individual, team, and company levels. This makes everyone avoid working in silos, turning the OKR methodology into an enterprise-wide goal-setting approach. At the same time, SMART goals are set in isolation and follow a simple structure for goal accomplishment.
SMART goals state rules to define objectives but restrict the scope to innovate by linking specific and achievable attributes. On the other hand, objectives and key results are flexible and focus on unlocking employee potential. OKRs help businesses align towards the company’s vision, improve cross-functional team collaboration, and ultimately drive business impact.
If you are looking for a robust goal-setting framework, choose the one that helps accelerate business performance and unlock success. Unlock:OKR can prove to be an ideal goal management tool that caters to your business needs and unlocks the employee potential.
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