OKRs vs. SMART goals: differences & best practices explained

As today’s teams try to stay as lean, agile, and efficient as possible, goal-setting frameworks like OKRs and SMART goals are more crucial than ever; after all, these frameworks enable teams to prioritize.

Besides allowing for prioritization, objectives are essential for long-term engagement and retention. According to the Microsoft Work Trend Index Special Report, team members who understand their workplace goals are almost four times more likely to stay with their company for more than two years. They’re also four-and-a-half times more likely to say they’re happy at work.

But knowing when to use objectives and key results (OKRs) versus SMART goals can be the difference between meeting targets and losing focus in the turmoil of everyday tasks.

When team members fail to meet objectives, there’s no need to place blame; it often means there was a lack of resources to plan and map out the future effectively. OKRs and SMART guidelines are frameworks that anyone can use to boost success for themselves and their company. That’s why this article explores the key differences between OKRs vs. SMART goals and digs into use cases and tips for both methodologies.

‍🔑 Discover how Leapsome can help you hit your objectives

Take five minutes to see how teams use Leapsome to set, distribute, track, and achieve goals company-wide.

👉 Take a quick tour of Leapsome

What are OKRs?

OKRs, or objectives and key results, are a management and goal-setting methodology that enables organizations to break down aspirational goals into manageable, measurable tasks.

The OKR framework aims to boost employee engagement, increase productivity and focus, drive transparency, and align team members and leaders behind a company’s strategic vision.

When implementing OKRs, your objectives should fit in with your business’ general purpose, along with being ambitious. “Goals at the team or organizational level are usually established first,” shared leadership expert Benjamin Laker on MIT Sloan Management Review. “These overarching goals then guide the formulation of individual objectives and key results, ensuring that they’re in harmony with the broader aims of the organization. This alignment links individual contributions to collective success in a unified direction, fostering a transparent, collaborative, and strategic approach to goal-setting.”

Your key results, on the other hand, must be specific, measurable, time-bound, and quantitative. That’s because they’re the exact steps you need to take to reach your goals. According to Laker, “key results serve as tangible milestones to monitor progress. A fitting team-level key result could be ‘to increase user engagement by 30% within the next quarter.’ This approach delineates a precise path for the team’s concerted efforts, distinct from broader organizational targets, which might encompass a wider scope and longer timelines.”

‍

OKR example

Objective | Our customers are engaged with the product and don’t feel inclined to churn‍

Key Result 1: Develop and implement a customer loyalty program with personalized offers and rewards to incentivize repeat purchases, with a customer adoption rate of at least 50%.

Key Result 2: Conduct regular check-ins with customers to identify and address issues and provide proactive support. At least 90% of customers are contacted at least once per quarter.

Key Result 3: Develop and launch targeted email marketing campaigns to re-engage customers who have not purchased in the past six months; aim for a 20% open rate and a 5% conversion rate.

🤔 Want to optimize how you set and track OKRs?

Leapsome empowers you to implement and monitor company OKRs and increase accountability with AI support, dashboards, and progress timelines.

👉 Learn more

What are SMART goals?

SMART goals encourage you to establish objectives that are:

• Specific 
• Measurable
• Achievable
• Relevant
• Time-bound

Each element in this approach should give you a sense of direction when building a roadmap for a specific goal. SMART goals accomplish this by pushing you to:

• Make precise statements about what you want to achieve
  Instead of saying you want to improve customer satisfaction, focus on how you could reach that goal — for example, by expanding your customer support team by hiring new talent. 
  
  ‍As COO Jennifer Lotito articulates in a piece for Forbes, “writing specific goals requires the goal-setter to be as granular as possible. ‘I want 2024 to be the best year in our company’s history’ is an excellent example of an execrable goal. ‘This year, our sales team will increase business-to-consumer sales by 15% percent compared to last year,’ is significantly better. It tells you who the players are, what’s at stake, what needs to be achieved, and by what time.”
  
  

• Implement measurable, trackable criteria that help gauge your progress
  According to Lotito, “not all goals will be easily measured. That is why your goals should also contain markers or milestones to assess progress. For example, if your goal is to implement a new CRM platform in 2024, some measurable steps may include whether you issued a request for proposal, demoed different platforms, chose a vendor, conducted employee training sessions, and transferred all existing data from the old system to the new one.”
  ‍
• ‍Set targets that are realistic and feasible while still challenging yourself
  Setting ambitious targets that are still achievable can be tricky. Lotito suggests that companies ensure that goals reflect resources. “If you don’t have an unlimited budget or unlimited staff, don’t select goals that require unlimited money or staff time.”
  ‍

SMART goal example

‍Our customer care team wants to improve our satisfaction rates, so we aim to reduce the wait times on customer support tickets from an hour to 30 minutes.

To do that, we need to hire three new customer support agents by the end of Q2. Reaching this hiring goal will require more recruiting efforts, but is doable.
‍

Is there such a thing as SMART OKRs?

Yes and no — parts of OKRs, like key results, can be SMART (specific, measurable, achievable, relevant, time-bound). You can also use the SMART goal framework when brainstorming to ensure that your objectives are as impactful as possible.

OKRs and SMART guidelines are two different goal-setting methodologies. They may not be interchangeable, but you can use both when strategizing in the short and long term. To make an OKR SMART, you’ll need to ensure that your objectives include a set deadline that’s reachable and relevant to your company’s overall mission.

A “SMART OKR” could also urge you to set targets that:

• Align individual, team, and company objectives
  
• Are specific and have clearly defined scopes and directions
  
• You can measure using trackable metrics
  
  

So, your key results need to follow some aspects of the SMART framework to be effective. However, you shouldn’t limit your objectives with SMART criteria, as they need to be more ambitious.
‍

Key differences between OKRs & SMART goals

OKRs encourage people to shoot for the stars when setting team goals and objectives. This aspirational methodology doesn’t aim for a 100% completion rate — the sweet spot is 60-80%. ‍

SMART guidelines, on the other hand, help you set specific goals that are much more realistic. 

Other differences between SMART goals vs. OKRs include:

• OKRs help you understand why, while SMART guidelines tell you how.
  
  
• OKRs are best for achieving long-term goals, whereas SMART guidelines are more suitable for short-term, smaller projects. That’s because OKRs are set up to help you achieve bigger-picture stretch objectives, while the SMART goal methodology calls for achievable targets within shorter timeframes.
  
  
• OKRs are flexible and agile and can be evaluated and adjusted monthly or quarterly; SMART goals are more fixed due to their short-term nature.
  
  
• OKRs are effective for achieving multi-metric goals, as you can use key results to focus on multiple initiatives. SMART criteria, however, are more suitable for single-metric targets.

‍

When to use OKRs vs. SMART goals

Both approaches to goal management have distinct advantages depending on your goal-setting strategy. OKRs are better suited to large-scale, slightly out-of-reach objectives, while SMART guidelines work best for individual, short-term, or one-off goals. 

Let’s say your organization aims to achieve a 20% profit margin. This initiative will likely take a few quarters and several milestones to accomplish. In this situation, it would be best to rely on OKRs to break down your complex target into smaller, more manageable steps. 

However, if your goal was to implement a teamwide feedback-collection workflow over the coming month, relying on SMART guidelines to create a list of tangible steps would be more effective. 

It’s also best to use the OKR framework for goals that might evolve in the future, as it offers you more flexibility. Since OKRs are associated with strategic aims, you should monitor them monthly or quarterly and adjust them to reflect any changes in circumstances.

Suppose your organization’s objective was to enter the European market by the end of the year. However, by the OKR check-in meeting in Q2, your team realizes that the company no longer has the budget to accomplish this goal within the established timeframe. This means you’ll need to shift focus and recalibrate. 

This contrasts with SMART goals, as those should be attainable from the onset and have limited opportunities for additional tweaks.

🔎 Curious how we use OKRs at Leapsome? Check out our OKR template to learn more.

‍

Tips for setting productive OKRs & SMART goals

Implementing OKRs and SMART goals can be daunting — especially if you have little experience with these goal management practices. That’s why we’ve prepared a list of recommendations to help you get started. 
‍

Top OKR tips

• Use AI to help you get started setting OKRs — Platforms like Leapsome make it faster to set customizable objectives with generative AI. Then, you can collaborate asynchronously with stakeholders to flesh out goals based on company objectives.
  ‍
• Don’t set and forget — Establish a process for reviewing your OKRs regularly, or they won’t be as effective.
  
  
• Store and document your OKRs — Use a data dashboard to monitor goal progress, increase transparency and accountability, and keep your objectives top of mind.
  
  💡 Leapsome’s user-friendly analytics can give you better insights into how effectively you’re working toward your goals.
  ‍

• Keep it simple — Don’t set too many objectives or key results, so your team stays focused.
  
  
• Encourage team members to collaborate on their OKRs — Invite employees from different departments to align on how to check off milestones and drive the company mission forward.
  ‍
• Celebrate wins regardless of scope — Shout your team members out informally on a messaging app like Slack or acknowledge them formally by offering rewards and recognition. This is a great way to keep everyone motivated and engaged, especially for longer-term objectives.

🔥 Turn OKRs into your organization’s superpower

Leapsome helps you streamline OKR creation and implementation with customizable templates, analytics dashboards, and automated scoring.

👉 Learn more

Top SMART goal tips

• Understand why you’re setting your goals — This keeps you from viewing SMART goals simply as items to check off your list. Knowing the why fosters motivation and helps you move forward with purpose.
  
  
• Have your big-picture goals in mind — Make sure your SMART goals are aligned with and feed into your company vision.
  
  
• Keep the lines of communication open to support feedback — Encourage leaders and employees to exchange feedback regularly. This helps ensure your SMART goals are practicable and a good use of everyone’s time.
  ‍
• Have an accountability partner — This can be a manager, a coworker, or your entire team. Having someone following up on your progress can help keep you engaged.
  
  

How Leapsome can help you hit targets with ease

The OKR framework helps you break down ambitious objectives into bite-sized chunks and clarify the steps you need to take to achieve your targets. When paired with SMART goal-setting guidelines, this methodology can help boost transparency, alignment, and engagement at all company levels. 

Goal and OKR management is a long-term endeavor that calls for collaboration, practice, and iteration. That’s why Leapsome’s all-in-one people enablement platform gives you the tools for a goal-setting process that seamlessly integrates with your daily workflows. Our Goals module provides you with:

• Powerful, customizable OKR templates 
• Automated calculations and scoring capabilities
• Easy-to-navigate analytics dashboards for added transparency and accountability
• OKR check-in reminders to build a culture of feedback

Finally, you can integrate your OKRs with 1:1s and team meetings, performance reviews, and rewards and recognition to give your team the tools they need to succeed.

💥 Set efficient OKRs that propel you toward success

Our Goals and OKR Management Module empowers leaders to align employees behind big-picture objectives and improve engagement.

👉 Book a demo