Let’s Be Clear on Definitions: OKR, MBO, Goal, Objective, KPI and Metric

Know Your Terms

Many words and phrases are used interchangeably in the business world, but at a certain point, we must refer back to their true definitions to get clarity about what’s really being said. Even at Atiim, we occasionally use “goal” and “objective” interchangeably to avoid being overly pedantic. But in order to hold meaningful conversations about your company’s true aim, you’ll need the proper knowledge about how to use the following terms correctly.

Goal

Goals are longer-range and broader than Objectives.  They are typically said in the context of a 3-year or a 5-year aspiration. Goals are meant to be broad for a timeframe that extends beyond the period of one year. They can be broad and general and do not require quantification or a specific deadline.

OKRs

Stands for “Objectives and Key Results;” it is a goal-setting framework which helps create clarity, focus, transparency, engagement, and alignment by organizing predetermined Objectives and the Key Results or the metrics that show progress towards the objective.

Download the Ultimate List of OKR Goal Examples

MBO

Stands for “Management By Objectives;” it is an approach to business management that was first introduced by “Father of Management” Peter Drucker in the 1950s that encompasses manager/team collaboration to establish short-term goals.

Objective

The “O” in OKRs; the thing to be accomplished which should be specific, measurable, time-bound, and ideally, quantifiable.

KPI

Stands for “Key Performance Indicator;” a metric of performance – determines if you are achieving success in an organization. KPIs are used as indicators that look backwards (i.e. retrospective) in most contexts. KPIs can also be found inside a Key Result in an OKR.

Metric

A quantifiable unit of measurement that tracks and/or gauges the status of a particular process,

Do you manage a company or teams (either as a CEO, a senior executive, a middle manager or even a front-line manager)? Do you set and track objectives? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!

Add a comment:

Your email address will not be published. All fields are required.