Knowing when to use objectives and key results (OKRs) versus SMART goals can be the difference between meeting targets with ease and losing focus in the turmoil of everyday tasks.
In the long run, using a less-than-ideal goal-setting approach can set your team up for frustration and difficulty by decreasing engagement and motivation levels, stifling innovation and ingenuity, and making the workplace feel stagnant.
Because failing to meet objectives isn’t due to anyone’s inability; it’s about lacking the resources to plan and map out the future effectively. And OKRs and SMART guidelines are tools anyone can use to boost success for themselves and their organization.
This article covers definitions, key differences, use cases, and tips for both methodologies.
What are OKRs?
OKRs — objectives and key results — are a management and goal-setting methodology that enables organizations to break down aspirational goals into manageable, measurable tasks.
This framework aims to boost employee engagement, increase productivity and focus, drive transparency, and align employees and leaders around their company’s strategic vision.
When implementing OKRs, your ‘objectives’ should fit in with your company’s general purpose, along with being ambitious and maybe even a little out of reach. That will encourage you to think creatively about your organization’s overall direction and how to get where you want to be.
Your ‘key results,’ on the other hand, must be specific, measurable, time-bound, and quantitative. That’s because they’re the exact steps you need to take to reach your goals.
Objective | Our customers are engaged with the product and don’t feel inclined to churn
Key Result 1: Develop and implement a customer loyalty program with personalized offers and rewards to incentivize repeat purchases, with at least 50% adoption rate from customers.
Key Result 2: Conduct regular check-ins with customers to identify and address issues and provide proactive support, with at least 90% of customers contacted at least once per quarter.
Key Result 3: Develop and launch targeted email marketing campaigns to re-engage customers who have not made a purchase in the past 6 months, with at least a 20% open rate and 5% conversion rate.
🤔 Want to optimize how you set and track OKRs?
Leapsome empowers you to implement and monitor company OKRs and increase accountability with dashboards and progress timelines.
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What are SMART goals?
The criteria for SMART goals encourage you to establish objectives that are:
Each element in this approach should eliminate generalities and vagueness when creating targets and give you a sense of direction when building a roadmap for a specific goal. SMART goals accomplish this by pushing you to:
- Make precise statements about what you want to achieve. Instead of saying you want to improve customer satisfaction, focus on how you could reach that goal. For example, expand your customer support team by hiring new talent.
- Implement measurable, trackable criteria that help gauge your progress.
- Set targets that are realistic and feasible, while still challenging yourself. It’s tricky to balance setting ambitious targets for yourself that are still achievable.
- Focus on meaningful work that contributes to short- and long-term company success. Doing so helps you prioritize the tasks that’ll make the biggest impact.
- Create precise, reasonable deadlines that will still push you. This ensures everyone feels excited and driven to work toward their goals without getting overwhelmed or burnt out.
SMART goal example
Our customer care team wants to improve our satisfaction rates, so we aim to reduce the wait times on customer support tickets from an hour to 30 minutes.
To do that, we need to hire three new customer support agents by the end of Q2. Reaching this hiring goal will require more recruiting efforts, but is doable.
Can OKRs be SMART?
Yes, and no — parts of OKRs can be SMART.
OKRs and SMART guidelines are two different goal-setting methodologies. And while they aren’t interchangeable, they have some similarities. Both OKRs and SMART goals foster clear communication, pave a straightforward path toward success, and provide clear roadmaps for achieving your objectives.
They also urge you to set targets that:
- Align individual, team, and company objectives
- Are specific and have clearly defined scopes and directions
- You can measure using trackable metrics
- Have clear start and end dates
So, your key results need to be SMART in order to be effective. However, you shouldn’t limit your objectives with SMART criteria, since they need to be more ambitious.
Key differences between OKRs & SMART goals
OKRs encourage people to shoot for the stars when setting team goals and objectives. The purpose of this aspirational methodology isn’t to achieve a 100% completion rate — reaching 60-80% is the sweet spot.
SMART guidelines, on the other hand, help you set specific goals that are much more realistic.
Other differences between OKRs and SMART goals include:
- OKRs are a framework, while SMART goals are a set of guidelines.
- OKRs help you understand why, SMART guidelines tell you how.
- OKRs are best for achieving long-term goals, whereas SMART guidelines are more suitable for short-term and smaller projects. That’s because OKRs are set up to help you achieve bigger-picture stretch objectives, while the SMART goal methodology calls for targets that are achievable within shorter timeframes.
- OKRs are flexible and agile and can be evaluated and adjusted monthly or quarterly, while SMART goals are more fixed due to their short-term nature.
- OKRs are effective for achieving multi-metric goals because you can use your key results to focus on multiple initiatives simultaneously. SMART criteria, however, are more suitable for single-metric targets.
When to use OKRs vs. SMART goals
Both approaches to goal management have distinct advantages depending on your goal-setting strategy. OKRs are better suited to large-scale, slightly out-of-reach objectives, while SMART guidelines work best for individual, short-term, or one-off goals.
Let’s say your organization aims to achieve a 20% profit margin. This initiative will likely take a few quarters and several milestones to accomplish. In this situation, it would be best to rely on OKRs to break down your complex target into smaller, more manageable steps.
However, if your goal was to implement a teamwide feedback-collection workflow over the coming month, it would be more effective to rely on SMART guidelines to create a list of tangible steps.
It’s also best to use the OKR framework for goals that might evolve in the future, as it offers you more flexibility. Since OKRs are associated with strategic aims, you should monitor them monthly or quarterly and adjust them to reflect any changes in circumstances.
Imagine your ‘objective’ was to enter the European market by the end of the year. However, by the OKR check-in meeting in Q2, your team knows that, due to the current economic conditions, you don’t have the budget to accomplish this goal within the established timeframe. So, you’ll need to shift focus and recalibrate.
This contrasts with SMART goals, as those should be attainable from the onset and have limited opportunities for additional tweaks.
🔎 Curious how we use OKRs at Leapsome? Check out our OKR template to learn more.
Tips for setting productive OKRs & SMART goals
Implementing OKRs and SMART goals can be daunting — especially if you have little experience with these goal management practices. That’s why we’ve prepared a list of best practices to help you get started.
Top OKR tips
- Don’t set and forget. Establish a process to review your OKRs regularly, or they won’t be as effective.
- Store and document your OKRs. Use a data dashboard to monitor goal progress, increase transparency and accountability, and keep your objectives top of mind.
💡 Leapsome’s user-friendly Analytics can give you better insights into how effectively you’re working toward your goals.
- Keep it simple. Don’t set too many objectives or key results, so your team doesn’t lose focus.
- Encourage team members to collaborate on their OKRs. Invite employees from different departments to work together to align how to check off milestones and drive the company mission forward.
- Celebrate wins regardless of scope. Shout out your team members informally on a messaging app like Slack or acknowledge them formally by offering rewards and recognition. This is a great way to keep everyone motivated and engaged, especially for longer-term objectives.
🔥 Turn OKRs into your organization’s superpower
Leapsome helps you streamline OKR creation and implementation with customizable templates, analytics dashboards, and automated scoring.
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Top SMART goal tips
- Understand why you’re setting your goals. This keeps you from viewing your SMART goals simply as items to check off your list. Knowing the why fosters motivation and helps you move forward with purpose.
- Have your big-picture goals in mind. Make sure your SMART goals are aligned with and feed into your company vision.
- Keep the lines of communication open to encourage feedback. Encourage leaders and employees to exchange feedback regularly. This helps ensure your SMART goals are practicable and a good use of everyone’s time.
- Have an accountability partner. This can be a manager, a coworker, or your entire team. Having someone following up on your progress can help keep you engaged.
Hit your targets with ease with Leapsome
The OKR framework helps you break down ambitious objectives into bite-sized chunks and clarify the steps you need to take to achieve your targets. And when paired with SMART goal-setting guidelines, this methodology can help boost transparency, alignment, and engagement at all company levels.
Goal and OKR management is a long-term endeavor that calls for collaboration, practice, and iteration. And Leapsome’s all-in-one people enablement platform gives you the tools for a goal-setting process that seamlessly integrates with your daily workflows. Our Goals and OKR Management Module provides you with:
- Powerful, customizable OKR templates
- Automated calculations and scoring capabilities
- Easy-to-navigate analytics dashboards for added transparency and accountability
- OKR check-in reminders to build a culture of feedback
Finally, you can integrate your OKRs with 1:1 and team meetings, performance reviews, and rewards and recognition to give your team the tools they need to succeed.
💥 Set efficient OKRs that propel you toward success
Our Goals and OKR Management Module empowers leaders to align employees behind big-picture objectives and improve engagement.
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