Organizational goal setting is essential to staying competitive, tackling new opportunities, and expanding into uncharted territories. It also ensures all employees are on the same page and pulling in the same direction. However, simply setting goals isn’t enough — you need a structured approach to creating, tracking, and completing these goals. This is why using a goal-setting framework is crucial to the process.
While there are a number goal-setting frameworks to choose from, this article will explore two of the most popular frameworks: objectives and key results (OKRs) and SMART goals. We’ll dive into the differences and similarities between OKRs and SMART goals, list their pros and cons, look over examples of OKRs vs. SMART goals, and explore ways of combining the two.
What are OKRs?
The OKR methodology uses two components to set and track ambitious goals: objectives and key results. Objectives refer to inspirational goals you're looking to achieve and are often short, qualitative, and engaging.
Key results are time-bound and quantitative by nature and allow you to measure progress towards your objective. Each objective is accompanied by 3-5 key results.
Want an in-depth look at OKRs? Read more in our guide below.
What are SMART goals?
SMART goals (or SMART criteria) refer to a goal-writing guide that outlines five standards for your goals. These state that your goals should be:
- Specific: target a particular area for improvement
- Measurable: quantify or suggest progress metrics
- Achievable: ensure you can achieve your goals with the given resources
- Realistic: outline what results you can feasibly achieve using the available resources
- Timely: highlight when your goal should be achieved
While this is the original (and most popular) SMART acronym, the acronym's meaning has had several iterations. For example, A can also stand for ‘Assignable,' and R can stand for 'Relevant.'
The history of OKRs and SMART goals
Both OKRs and SMART goals date back to the theory of Management by Objectives (MBO). Peter Drucker first used MBO in his 1954 book The Practice of Management, where it was put forward as a framework to help managers guide and align employees with broader company goals.
Later in the 1970s, Andy Grove took the MBO framework and expanded it to OKRs. Then, in 1981, SMART goals were developed by George Doran, Arthur Miller, and James Cunningham in their article There’s a S.M.A.R.T. way to write management goals and objectives.
OKRs vs. SMART goals examples
To show the difference between OKRs vs. SMART goals, let’s walk through a quick example of how they diverge in terms of structure and ambition levels in the context of content marketing. For this example, let’s say our goal is to increase blog traffic.
Here’s how to structure it as a SMART goal:
- Specific: the marketing team will publish three well-researched blog posts a week based on keyword research to increase organic traffic by 30%.
- Measurable: We will use Google Analytics to track organic traffic and measure the success of our goal.
- Achievable: Content marketers, SEO specialists, and graphic designers will work closely to ensure alignment.
- Realistic: We have the personnel and resources to sustain an ongoing content calendar.
- Timely: We will release three articles a week throughout Q3, on Monday, Tuesday, and Thursday mornings.
Here’s how to structure it as an OKR:
Objective: Use our blog to become thought leaders in our industry
Key result 1: Increase organic traffic to our blog by 35% in Q3
Key result 2: Double our blog subscribers
Key result 3: Decrease bounce rate to 30%
Key result 4: Increase the average session duration by 20%
Compared to the SMART goal above, this content marketing OKR is more ambitious and contains multiple metrics.
OKRs vs. SMART Goals: What's the difference?
OKRs are a goal-setting framework, SMART goals provide a template for writing goals
OKRs and SMART goals facilitate goal setting differently. OKRs offer an actionable goal-setting framework to promote alignment, transparency, and focus across organizations. Meanwhile, the SMART criteria are a set of characteristics companies can use to write their goals. These act as a template rather than an actionable framework.
OKRs are aspirational, SMART goals are tactical
OKRs and SMART goals also differ in how ambitious they are. OKRs challenge teams and organizations to take on ambitious, stretch goals with attainment rates of 60-80%. These goals often require collaboration, lateral thinking, and innovative ways of working. On the other hand, SMART goals are mostly process-oriented, where they're achievable, risk-averse, and entail the completion of day-to-day tasks.
OKRs aren’t tied to compensation, SMART goals are
As OKRs are used to create aspirational goals, they shouldn't be tied to compensation. Not mixing OKRs with compensation makes employees more likely to set ambitious goals that inspire innovation and constructive failure. On the contrary, SMART goals are often tied to compensation as they’re achievable and more individualistic.
OKRs are flexible, SMART goals are static
OKRs were made to adapt to organizations. Businesses are meant to update, renew, or scrap OKRs as new changes emerge in their business environment. Therefore, OKRs can be set monthly, quarterly, or annually. This flexibility ensures that OKRs don't become outdated. In contrast, organizations shouldn't change their SMART goals after initially setting them. As such, most SMART goals are set annually.
OKRs are public, SMART goals are private
OKRs and SMART goals vary in their transparency. The OKR framework encourages visibility across the organization by making OKRs and the progress accessible to everyone in the business. Meanwhile, SMART goals tend to be more private (unless the organization wants to make them public).
OKRs can be established top-down, cross-functionally, or bottom-up, while SMART goals are set top-down
OKRs can be set top-down, bottom-up, or cross-functionally. This enables input from broader stakeholders, encouraging a wider scope of conversation. On the other hand, as SMART goals are created for individuals, they tend to adopt a top-down approach. This makes them more authoritative and concrete (but less aligned with the broader organization).
OKRs measure multiple metrics while SMART goals measure one
SMART goals are typically measured by a single metric, whereas OKRs are multi-metric goals. As such, SMART goals have a narrow approach to success, whereas OKRs have a more holistic take on achievement.
What do OKRs and SMART goals have in common?
While comparing OKRs vs. SMART goals reveals stark differences, the two share a few similarities.
They create measurable goals
Since OKRs have key results and SMART criteria emphasize measurability, both OKRs and SMART goals are quantifiable. As such, they allow organizations to track goal progress every step of the way.
They add precision to goals
Both OKRs and SMART goals offer a detailed goal breakdown, removing ambiguity when creating goals. Therefore, they can assist organizations in laying out strategic paths for their teams and employees.
Their goals are time-bound
Another similarity between OKRs and SMART goals is that they both have a specific start and end date. OKRs are mostly set per month or quarter (with annual OKRs possible as well), while SMART goals are established yearly.
OKRs vs. SMART goals: Pros and cons
Understanding the advantages and disadvantages of OKRs and SMART goals can give you a more nuanced and in-depth understanding of the two goal-setting approaches. Let's take a look at their pros and cons.
Pros and cons of OKRs
- Quicker to set than SMART goals
- Encourage innovation and creativity due to stretch goals
- Provide a flexible and agile approach to goal setting
- Encourage teamwork by fostering alignment and transparency
- May be perceived as restrictive
- Changing objectives and key results to adapt to fast-paced environments may be tiring and time-consuming
- Complex alignment process where training and experienced staff are needed to oversee progress and redirect attention to what matters
- Require discipline to be effective (i.e., daily, weekly, monthly, and quarterly check-ins)
Pros and cons of SMART goals
- Each goal has a single, specified measurable goal, making it easy to determine success
- Provides a clear, detailed, and structured approach to writing goals
- No limitations on what the acronym stands for — it can be adjusted to suit each organization
- May encourage mediocrity
- It doesn't provide an actionable approach to achieving goals, just an outline for writing them
- SMART goals' attainability hinders motivation
- Can be time-consuming to plan, which may lead SMART goals to overshadow areas of business that require attention
How to use OKRs and SMART goals together
The good news is that it doesn't always have to be OKRs vs. SMART goals — your organization can benefit from having both. Here are several ways of combining OKRs and SMART goals.
Implement a SMART approach to OKRs
SMART criteria can help your organization set goals methodically and consistently. Therefore, applying a variation of SMART criteria to OKRs can augment the traditional process of setting OKRs. The adjusted SMART criteria for OKRs are:
- Superlative: Aim higher than the expected outcome. This encourages employees to try new things and push beyond business-as-usual performance. Moreover, it inspires new habits and innovative ways of thinking.
- Measurable: Ensure that progress is quantifiable. An OKR that's not measurable means you can't objectively or universally accept it as being achieved.
- Aligned: Make sure your objectives contribute to the overarching goals. Alignment speaks perfectly to the purpose of OKRs: objectives are only worthwhile if they collectively benefit the business.
- Resourced: If your business objectives are aligned with the broader organization and have the potential to yield great results, request adequate support from upper management to ensure you can go after your objectives at full speed.
- Time-bound: Time-bound as a criterion remains the same in this case. Yet, its meaning is slightly altered. In the case of OKRs, positive outcomes must exist even if the goal is only partially achieved at the end of the cycle. If the OKR can be fully achieved, you must choose a new objective instead.
This altered SMART framework can train employees to assess whether objectives are aligned, aspirational, and attainable. Considering these brings better focus, greater productivity, and improved collaboration.
Use SMART goals as key results
Using SMART key results is an alternative approach to weaving SMART goals into OKRs. Unlike objectives that need to be aspirational, key results focus on tangible measurements of progress. For example, if you set an objective for OKR adoption (e.g., "Have OKRs become the lifeblood of our organization"), you can use SMART key results to measure progress accurately. These key results can look something like this:
- Key result 1: Everyone on the team owns an OKR
- Key result 2: Achieve overall goal attainment of 70%
- Key result 3: Track 270 key results
- Key result 4: Achieve 100% commitment to OKRs by Q3
These key results are Specific ("own"/" attain"/" track"), Measurable ("70%"/"270"/" 100%"), Assignable ("Everyone"/"We"/"Overall"), Realistic (where only one key result requires 100%), and Time-bound ("by Q3").
Use OKRs for organizational or outcome-related goals, while implementing SMART criteria for individual and output-related goals (H3)
OKRs are best suited for strategy execution. Your organization can use them to facilitate transparency and focus across company, departmental, and team goals. Conversely, SMART goals resemble old waterfall methodologies and entail long planning times. This makes them suitable for creating personal objectives where individuals can control their own outcomes and forgo the need for alignment.
Turn SMART goals into OKRs
If, however, your company is heavily entrenched in SMART goals and you want to strive towards more ambitious goals, you can easily transition to the OKR methodology using the following steps:
Step 1: Support your existing culture before improving it
The first step is ensuring that your employees, processes, and technology are prepared for change. You can aid this transition by creating an effective OKR culture. This is a combination of factors, including transparency, diversity, committed leaders, and clear company values.
Step 2: Aim higher
If your business's achievable measure of success is 40%, double it. If you're aiming for 90%, add an extra 10%. Make the necessary changes required to make your targets a little more challenging and aspirational.
Step 3: Measure more
The third step involves adding more metrics and analyzing goal performance from multiple perspectives. This can improve progress tracking, visibility into why initiatives are (or are not) progressing, and confidence in gathered insights.
Step 4: Establish ownership for objectives
The fourth step is identifying owners. Giving one person the responsibility of spearheading company-wide objectives is a recipe for disaster. Multiple metrics across various platforms mean that many teams and individuals must be held accountable for organizational goals.
Step 5: Facilitate alignment
The penultimate step to turning SMART goals into OKRs is ensuring that other OKRs support your company's objectives. Not only does this ensure employees work together cooperatively, but it also facilitates productivity and growth across the board.
Step 6: Make objectives exceptional
The final piece of the puzzle is making objectives motivating. Use language to shape employees' perceptions of targets and encourage them to tackle their goals. According to several prominent behavioral studies, individuals have enhanced goal progress when they own inspired goals.
How Gtmhub can help you achieve your goals
At Gtmhub, we're committed to helping you bridge the gap between goals, strategy, and execution. Inspired by the Objectives and Key Results (OKR) methodology, our platform is designed to help you align your teams, improve focus, and foster transparency.
Quick-start your OKR journey with ready-to-go OKR templates from our Marketplace or connect with 160+ Integrations to update your OKRs and KPIs automatically to easily make data-driven decisions with our customizable Insights and Dashboards.