There are many different goal-setting frameworks that you could utilise to set achievable goals and boost your business growth. SMART business goals are a tool used by many organisations to do just that. But how do they compare to OKRs?
Whilst the two goal-setting processes have their similarities, there are some key differences you should be aware of before you use them to set your organisational objectives. In this article, we’ll show you exactly what these differences are.
What are SMART business goals?
A SMART business goal is one that is set using the SMART acronym. This stands for:
The main benefit of the SMART goal setting process is that it provides a clear objective for you to work towards.
SMART goals can be applied to all areas of life, and they can be used for personal development too. However, many businesses use them to set achievable goals for their organisation to encourage growth and stretch.
Setting business goals using OKRs
On the other hand, you could use the OKR framework to set your organisational goals. Obviously, we’re slightly biased but we believe OKRs are one of the best ways to push you and your business out of your comfort zone and achieve growth!
If you’re new to the OKR process, here’s a quick breakdown of what it involves:
Outlining your business objectives
The first step to setting OKRs is outlining your business objectives. These are supposed to be ambitious, and somewhat scary, to help you push your organisational limitations as much as possible.
Define your key results
Your key results will indicate whether or not you have hit your objectives, and they’ll provide you with a metric to measure your results. In general, an OKR is considered to be ‘achieved’ when you’ve hit 70% progress on your goal.
Assign confidence ratings
Confidence ratings or levels indicate how likely you are to achieve your OKRs. This will help you to allocate your resources accordingly, and it will ensure you don’t waste time on unachievable goals.
Carry out regular OKR reviews
OKR reviews are essential for setting business goals for growth. Why? The review process highlights how close or far away you are from achieving your goals. Therefore, it can highlight any areas for concern early on, and you can switch or update your OKRs accordingly.
The main differences between SMART goals and OKRs
OKRs and SMART business goals are alike in many ways. For example, both SMART objectives and OKRs have time-bound elements. Therefore, you have a set amount of time to hit your goals. Both types of goals are also designed to be as specific as possible, so there’s no ambiguity surrounding your progress.
However, there are some key differences between the two goal-setting processes.
The review process
Firstly, the OKR process involves regular reviews and check-ins to monitor progress, where the SMART goal-setting process does not.
No matter which method you use, regularly reviewing your organisational goals will help to ensure you stay on track to achieving your business objectives.
Secondly, OKRs are designed to be ambitious and they encourage stretch. Whereas, there are no guidelines for how aggressive your SMART goals should be.
Whilst this may sound daunting at first, adopting an aggressive OKR strategy can help you to achieve growth faster and more consistently. Why? Even if you achieve 70% progress towards your business objectives, the amount you gain is likely to be more significant than if you’d set a safer goal.
Which option should you use for your goal-setting process?
It’s likely that you’ll adopt some of the parameters from the SMART goal framework when creating OKRs and vice versa. Both methods are useful goal-setting processes that encourage you to push your business out of its comfort zone.
However, if you want to go the extra mile and achieve consistent growth, the team at There Be Giants can help! Speak to a Giant today to see how we can help you implement and make the most of your OKRs.