In this article, we’ll contrast SMART goal setting and OKRs. We’ll define both protocols for you, and then explore the similarities of the frameworks, and how they differ. It should be noted SMART goals are an integral part of the evolution of OKRs.
Let’s Review the Evolution of Objectives and Key Results.
In his 1954 book The Practice of Management, Peter Drucker (a.k.a. “The Father of Modern Management”) coined the term MBO, or “management by objectives.” This participative approach to goal setting was to involve all employees in the process of determining their priorities and course of action planning. The concept was to boost engagement and commitment by giving a voice to employees at all levels.
Corporate implementations of the MBO methodology varied greatly and strayed from Drucker’s original intent. Perhaps the biggest mistake firms made was transforming the process into a top-down exercise in which senior managers dictated objectives with a lack of regard as to how they would be executed.
SMART Goals is a system that was introduced by George T. Doran in 1981. It is an acronym that sets the criteria for setting goals and objectives. SMART goals have also played a significant role in shaping today’s OKRs. The SMART approach acronym, which stands for Specific, Measurable, Attainable, (sometimes referred to as Aligned), Relevant, and Time-Bound, is used to develop goals that are concrete and geared towards execution in a defined period.
Andy Grove of Intel is generally credited with adapting Peter Drucker’s Management by Objectives to today’s modern OKR system. Along the way, Groves coined the phrases “Management by Objectives and Self-Control” the foundation for OKRs; and he referred to the methodology as “iMBO’s,” or “Intel Management by Objectives.” He was also the first to use the term Key Results.
Read on, and you’ll see how OKRs encompass elements from SMART goals.
A Definition of OKRs (Objectives and Key Results)
In his book, “Measure What Matters,” author John Doerr tells us that OKRs (Objectives and Key Results) is a collaborative goal-setting protocol for companies, teams, and individuals. The methodology is a discipline to align everyone at your company, focus everyone’s effort on what truly matters, and make progress measurable to help you achieve your top corporate objectives.
OKRs is a simple protocol, with a simple language. It’s the modern-day solution to the goal setting challenges all companies face by creating the laser focus required to succeed in today’s markets.
Objectives (Os), are WHAT is to be achieved. They should be significant, concrete and action-oriented. They represent the direction.
Key Results (KRs) benchmark and monitor HOW we get to the objective. KRs should be succinct, specific, and measurable. KRs typically include hard numbers.
SMART Goals Defined
The SMART method was first introduced in the November 1981 issue of Management Review in a paper authored by George T. Doran titled, “There’s a S.M.A.R.T. Way to Write Management Goals and Objectives.”
The SMART mnemonic acronym provides the following criteria for setting goals and objectives:
S. Specific, provides a clear description of what needs to be accomplished
M. Measurable, provides a metric, or number, that identifies when the objective has been achieved
A. Attainable, the objective must be achievable, within the timeframe and resources allocated
R. Relevant, meaningful, significant, and aligned with corporate priorities
T. Time-bound, the objective must be concluded by a specific date, scoring occurs at this time to determine if the objective has been achieved.
SMART Goals and OKRs – Similarities in the Frameworks
In three words, Objectives and Key Results encompass each of the criteria of SMART Goals:
- Objectives are Specific, answering What needs to be accomplished
- They are Attainable, yet inspirational, and in some cases aspirational. Google uses two types of Objectives which they refer to as Aspirational and Committed. Aspirational goals require more of a stretch by the organization and may need to be rolled from period to period before being accomplished
- Objectives are Relevant. They must be aligned with corporate priorities, moving the organization in the desired direction, often in support of the Mission or Vision Statements. Quarterly OKRs determine the focus of the entire organization and inform the work to be done in the period
- Key Results are Measurable, they are typically metrics or numbers which determine when the Objective is achieved
- Key Results are Time-Bound, the typical cadence in an OKR environment is quarterly. KRs are expected to be completed within the current quarter
When working with clients, we often mention the SMART approach for setting Key Results. As the above illustrates OKRs are evolved from SMART goals, and SMART goals become a subset of an Objective and Key Result.
Where SMART Goals and OKRs Differ
Both frameworks provide criteria and a methodology for developing goals and objectives and as we have seen both methods address each element of the SMART acronym. Where the two protocols start to diverge is in alignment, cadence, tracking, and re-evaluation.
The beauty in the newer OKR approach is that it allows for each Objective to be broken down into actionable, concrete steps over a clearly-defined timeline, the Key Results. KRs create clarity about individual focal points and direct their effort, eliminating confusion and redundancy.
Two of the most important features of Objectives and Key Results are transparency and alignment. OKRs are articulated across the organization so that everyone knows what needs to be done, and how his or her priorities align with those of the company.
We’ve previously mentioned the cadence of OKRs, the best practice being quarterly. This more frequent goal setting, tracking, monitoring, grading, and evaluating contributes to a more nimble, agile organization.
A “must do” in an OKR execution is regularly scheduled one-on-one check-ins to monitor performance. We also recommend mid-quarter team meetings to update performance and to identify any “at risk” Key Results.
As you can see SMART goals and OKRs start off with similarities, but the OKR methodology continues when the SMART framework has concluded. Which protocol do you believe would be most useful for your organization?
We hope this comparison has helped you to understand SMART Goals and OKRs better. 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!