OKR v. SMART Goals – Which is Smarter?

OKR v. SMART Goals – Which is Smarter?

Are OKRs SMART Goals Re-branded?

The conference room was fairly dark, only the dim reflection of cove lights on tables and the white background of my slides illuminating the thirty or so people who had gathered to hear me introduce the topic of OKRs to their organization’s leaders. As my eyes moved around the room, connecting with the audience as I made my points, one face stood out among the others. The outline of this gentleman’s face, while not a scowl, certainly didn’t reflect appreciation of my thoughts on OKR. I knew it was just a matter of time before his hand shot up, and in fact I welcomed the interruption, curious as to why he wore the expression he did.

Sure enough, just moments later, his arm sprang skyward and before I could even acknowledge him he challenged me with this: “Isn’t what you’re talking about just SMART goals? They’ve been around forever? What’s the difference?” All was quiet for a moment and I’m quite sure I noticed other heads nodding in approval of his question – what is the difference?

Are OKRs just SMART goals cloaked in the cape of clever marketing thanks to a best-selling book on the matter by venture capitalist John Doerr? In fact the two are different, and in the remainder of this short post I’ll outline how the two contrast, and why I feel OKRs are the better choice for organizations wishing to execute their unique strategies in a world of constant change.

What is SMART, Anyway?

The first difference between SMART goals and OKR is simply terminology. OKR stands for Objectives (what you want to do) and Key Results (how you’ll demonstrate achievement of the objectives). OKR is a global phenomenon, and despite the possibility of cultural norms potentially impacting the taxonomy, the definition remains consistent around the world. Ask anyone from San Diego to Shanghai to define OKRs and you’ll come up with basically the same definition.

Not so with SMART goals. Before reading on, stop and ask yourself how you would articulate the acronym? What does the S stand for? The M, etc.? Over the years I’ve heard a number of meanings. For example, the “R” in SMART is sometimes associated with “relevant.” Others use the R to indicate “realistic,” while still others denote the R as standing for “risk” as in how much risk is associated with the SMART metric chosen? Words and definitions matter. Try as you may to be consistent in your use of the SMART acronym, chances are there will be groups in your organization that determine a better use of each letter and change its definition. This is no small matter. Changing the meaning of one or more of the letters will impact the chosen metrics significantly, and may well lead to an inconsistent approach to measurement across the enterprise.

There is more to OKR than Three Simple Words…

An even more crucial distinction between OKR and SMART goals is the structure that surrounds the two. Or, in the case of SMART goals, the lack thereof. SMART goals is a concept, an idea, but not a true framework with supporting tools and approaches designed to assist practitioners in garnering maximum value from the model. Should you decide to implement SMART goals in your organization tomorrow you possess little more than an acronym which may or may not lead to consistent and valuable tracking up and down the organizational ladder. OKRs, on the other hand, benefit from a growing body of global knowledge that is providing a ‘scaffolding’ to the framework, providing organizations with the means to ensure maximum value from the framework.

For example, at OKRsTraining.com we’ve created a suite of tools that build on the core tenets of OKRs, ensuring our clients can fully harness the OKR framework’s potential. We’ve designed an OKRs Playbook – essentially a user’s manual for OKRs – a roadmap to guide the implementation, and a number of other assets that support the client’s journey. We’re certainly not alone in this endeavor. OKR Coaches and practitioners alike are building on the foundation of OKRs to design tools that are rapidly transforming OKR into the strategy execution model of choice for organizations worldwide.

Our goal in this endeavor is not necessarily to produce a GAAP-like* system of rules and regulations governing OKRs use. There should always be customization in applying the framework based on each organization’s individual circumstances. What we, and others, are engaging in, is the creation of a basic infrastructure of tools, templates, and techniques to ensure we continue to expand the body of knowledge, pushing the frontier outward, allowing more organizations execute their strategy and make their own unique dent in the universe.

Fun stuff, and we welcome you in joining us on the ride.

Paul Niven is a Global OKR Coach and President of OKRsTraining.com, and the author of Objectives & Key Results, Driving Focus, Alignment and Engagement with OKRs.

*GAAP stands for Generally Accepted Accounting Principles. The standards that govern the reporting of financial results.