Why is goal-setting important?
Furthermore, why is following the perfect method for setting your goals necessary?
A manager usually comes across these questions, every now and then. Goals give you a clear direction and motivation, above all, it clears ambiguity.
The responsibility of setting goals is considered as one of the most crucial one in any organization.
Every goal you set for your firm should be quantifiable and impact-driven. Think of the destination, road-map, and the bigger picture while setting them.
There are many ways to set goals.
But, the method you follow makes all the difference. The traditional top-down approach of goal-setting often lacks agility and alignment and makes work a burden for employees.
In this modern yet sophisticated business environment, it is important that your team is outcome driven and not loaded with a lot of work.
Today's rapidly growing environment demands operational excellence and not just smart work. So an ideal goal setting process to execute your strategies is very important for any organization.
By now, your manager would have mentioned the technique SMART Goals to define their goals, but is this process the one that fits your organization?
In this blog, we will figure out how OKRs - a widely accepted goal-management framework is different from SMART goals.
What are Smart Goals?
The word SMART is an acronym for the fundamentals followed in this goal setting process. S-Specific, M-Measurable, A-Achievable, R-Relevant, and T-Time-bound.
The acronym may have variations, but its essence stays the same.
This traditional goal setting process is often used by the managers to emphasis on a clear definition of their goals. SMART goals set the criteria for goal creation while following the rigid structure of its name.
Specific - Your goals should not be ambiguous of direction, make sure they provide clear direction.
Measurable - This criterion focuses on how every goal should yield quantifiable results.
Achievable - The goals you set must be realistic, eliminating the chances of failure.
Relevant - The relevance of the goal with the organizational goal is important to attain fruitful outcomes.
Time-bound - Any goal should have a deadline to review the progress of the target, whether there is any traction or is it hanging in silos.
Examples of SMART Goals
Increase engagement by 20% on the website till September
Explanation: This goal suffices all the criteria of SMART goals. Increase engagement states the purpose, and 20% states the metrics. Since 20 isn't a big number, this can be considered achievable.
Web traffic also drives users for the products, hence ticking off relevance in the bigger picture.
In 2019, increase market share by 10% in India for product-line X.
Explanation: The product line X should have a particular market share by the end of 2019. Hence the entire team is working towards the given geographic area, making the goal specific and time bound. The target set here is realistic but fails to provide the role in the bigger picture of product line X.
What lacks in the above examples is how to achieve this SMART goal.
Let's take a look at some OKRs Examples.
What is OKR?
OKR is another acronym which is used for goal-setting frameworks. OKR stands for Objective and Key Results, a management tool which helps you break down your strategy and execution in two components. Objective - the plan you idealized and Key Results - to execute the Objective.
The Objective is the goal, and it has a set of 2-3 Key Results, which measures the success of any set Objective. The OKRs are ambitious, qualitative goals which are packed with the caution of failing with deliverables. This is because the tasks are set higher than employee's threshold potential.
Examples of OKR
Objective: Boost engagement on social media
KR1: 50 comments on LinkedIn posts
KR2: 2x increase in blog reads via Facebook
KR3: 10k views on YouTube
Explanation: The Objective has a broad spectrum in this OKR; engagement can be relevant to any Social Media Platform. If you want your team to have a clear direction, make sure the Objective is informative. The KRs listed have three different platforms for the same brand. The second KR again is a comparison, the numbers need to be defined better.
Objective: Increase market share for product X
KR1: Get 50 users monthly with a referral program
KR2: Acquire 200 users periodically via offline campaigns
KR3: Acquire 50% customer-base of product Y; use innovation
Explanation: The KRs here are dedicated to acquiring a particular market share for a product X. The first 2 KRs are strategies to gain new customers, while the third one is an aspirational KR which involves innovation.
The Objective here is clearly defined, and hence KR are aligned towards achieving it within the span mentioned in KRs.
Is SMART Goal just like OKR?
SMART goals and OKR both have few things in common, apart from being acronyms.
Both of these goal setting processes share the same priority for direction, adds a metric to define success and fixes rules and timelines for execution.
These frameworks date back to the days of Peter Drucker and MBO. But, since then, various organizations have refined the functionality of these tools according to what works best for them.
A goal setting framework is presumed to align company goals with individual objectives and provide precision and unified direction to work towards. SMART has a different take on this, it's structure is wired to work in isolation.
Though it is specific, it doesn't set goals for an entire enterprise like OKRs. OKRs follow a hierarchy of company-wide departments while structuring the goals, it functions both Bottom-up and Top-down.
OKRs are widely approached for their ambitious nature and acceptance for failure. On the other hand, SMART sets attainable goals, leaving no scope for risks and failure. Furthermore, advocating communication and cross-functional collaborations, OKRs take a step forward from SMART in contributing transparency at organizations.
Where SMART goals end, OKRs take charge.
Which one to work with - SMART Goal or OKR?
SMART goals are a fun set of rules when you want to define your goals, and they're worth to the team. But without challenging limits, growth remains stable.
It also restricts the area to experiment by attaching the attainable attribute to it, making sure that employees would definitely achieve the goal.
OKRs are meant to be flexible. The focus on aspirational goals induces aspirational thinking, while exponentially raising the employee potential. They also secure the alignment of the entire organization and improves cross-functional communication.
If you want to set big goals for an individual, choosing SMART goals can be an alternative. But if you have various functional levels in an organizational context, OKR gives clarity to your company-wide goals.
How about using a tool for OKR? Pre-sign up for OKR Board - A tool to make your OKR Setting Process Smooth and Clutter Free.