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OKR vs. Smart Goals: What Are the Differences and When to Use Them?

SMART goals (specific, measurable, achievable, relevant, and time-bound) and OKRs (Objectives and Key Results) are both methods for defining objectives or goals for a project, team, or organization.

Over the last three decades, SMART goals have provided a structured method for achieving goals and focusing efforts. However, startups and multinational firms have increasingly adopted OKRs, focusing on the bigger picture. 

We can compare SMART goals to the Key Results of OKRs. But how do OKRs and SMART Goals goal-setting approaches differ, and can we use them together? But before you continue reading this article, we encourage you to get familiar with the fundamentals of OKRs and then proceed to SMART goals vs. OKRs. 

What Is OKR?

Objectives and Key Results (OKR) is a popular framework used for setting goals in organizations. A key purpose of the OKR is to align the company's strategic goals with their actual execution to create a unified vision of success.

Objectives are more ambitious and even visionary, whereas Key Results are more numeric and measurable. The application of the hierarchical structure of OKRs ensures the alignment between company plans and work execution.

A Simple Example of OKR

Let's see how to set up a simple OKR for a content website in the healthcare industry.

Objective: Become the leading content platform for healthcare professionals seeking the most up-to-date research papers in healthcare.

Key Results:

  1. Increase the number of published healthcare research papers per month from 10 to 20 articles.
  2. Increase the exposure of our platform in industry-specific digital media from 15 to 20 featured articles per month.
  3. Increase our platform’s uptime each month from 94% to 99%.

What Are SMART Goals?

“When it comes to writing effective objectives, corporate officers, managers, and supervisors just have to think of the acronym SMART. Ideally speaking, each corporate, department, and section objective should be: (SMART).” - George T. Doran

SMART goals are a set of guidelines that help you set goals that are specific, measurable, achievable, relevant, and time-bound.

The SMART acronym was introduced in November 1981 by George T. Doran. George was a former Director of Corporate Planning for the Washington Water Power Company. The paper he published was called “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives.”

Let’s explain the meaning behind each characteristic of Doran’s SMART approach

  1. Specific. Goals should be specific, so we can have a clear path to what we want to achieve with that specific goal.
  2. Measurable. Goals should have a measurable outcome to track progress.
  3. Attainable. Goals should be achievable so that the person will not give up on them too soon.
  4. Relevant. Goals should be relevant to the person and their career goals in the organization.
  5. Time-bound. Goals should have an established deadline.

An Example of When to Use SMART Goals

A big brand in the tech niche used the SMART goal setting process to accomplish their organic traffic goal.

Goal: Increase organic traffic by 30% within six months.

  • Specific: The brand will increase its website organic traffic by 30% in six months.
  • Measurable: Optimize five mid-traffic articles per month to increase their organic ranking.
  • Attainable: If each of the five editors from the marketing team finds and optimizes one article per month, the goal becomes realistic and doable.
  • Relevant: Organic traffic is the primary traffic source for the brand's website. This goal is the most stable way to increase organic traffic, and its success will add to the overall business success.
  • Timely: The goal will be accomplished from date “X” to date “Y.”

How SMART Goals and OKRs Are Similar?

Goal-setting approaches such as SMART goals and OKRs are based on the concept that achieving business and organizational success requires setting clear objectives. Both provide specific steps in helping you develop a realistic and time-bound plan for reaching your goals.

SMART goals and OKR are about removing the "vagueness" from the process of setting and achieving goals. Each approach focuses on measuring success based on outcomes, not just on the number of completed activities. And both OKRs and SMART teach you to be specific with your objectives. 

However, the similarities between the two ends here. Where SMART goals end, OKRs take over.

What Are the Differences between SMART Goals and OKRs?

There are five significant differences between OKRs and SMART goals that set the two goal-setting approaches apart.

1. SMART Goals Focus Mainly on the Objective

OKRs always consist of Objective and Key Results attached to each objective. SMART goals are a list of principles that help you create an objective without focusing on the tactics to achieve that goal. 

SMART goals focus on the question—what is the goal? Where OKRs provoke the questions—what is the goal, and how can I reach it? With OKRs, there is an additional layer of ownership for getting closer to a wider vision which happens by gradually reaching its correlated key results.

2. SMART Goals Are a Guideline, Rather than a Framework

Even though SMART goals offer structured criteria used to craft the process of defining goals, they are not a framework. SMART goals are a guiding set of principles or an approach for setting and building goals.

3. SMART Goals Are Frequently Tied to Compensation

SMART goals are often tied to compensation. In OKRs, employees’ performance is not tied to compensation. A key advantage of OKRs is the "dare to fail" mentality, which promotes innovation and stretching beyond existing capabilities since compensation is not tied to them.

4. SMART Goals Are Less Agile

Usually, organizations set SMART goals annually, where the cycles of OKRs are quarterly or monthly. This makes OKRs more agile than SMART goals.

5. SMART Goals Are Naturally Risk-Averse

Employees are expected to achieve their goals fully when their performance is linked to their goals, which is often the case with SMART goals. This means that employees’ goals are often set in the safe zone.

OKR and SMART goals have different uses. When choosing which method to use, consider that OKRs are primarily used when your organization or teams want to measure and achieve a very ambitious goal or vision. SMART goals are mainly used for setting daily goals, where these goals don't have to necessarily contribute directly to the larger-scale strategic plan of the organization.

In Summary

SMART goals and OKRs are both approaches to setting goals. And while the SMART goals criteria are easy to remember, it simply describes a goal in isolation. If your organization is looking for a way to measure and achieve ambitious goals, you should consider using OKRs.

  • OKR provides a different context for the organization and turns goal-setting into an enterprise endeavor.
  • With OKR, the entire organization achieves focus and clarity over goals.
  • Since SMART goals have an annual cadence, they offer little room to pivot. OKRs have quarterly and even monthly cadence, allowing them to be adjusted based on changes in the environment, such as those in the competitive landscape.

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