SMART Goals vs KPIs vs OKRs: Which Ones Drive REAL Results?
This blog post is a pre-launch preview of an upcoming Thinkydoers episode based on a YouTube Live delivered on 10/18/2024 as part of my Goal Fridays series. This page will be updated to include the produced Thinkydoers episode once it’s available and published. In the meantime, you can watch the full replay via YouTube!
Are you drowning in a sea of goal-setting acronyms?
Do you find yourself wondering what the heck is the difference between a KPI and an OKR?
Well, strap in, because we're about to demystify the alphabet soup of goal setting!
In this episode, goal-setting specialist and self-proclaimed OKR activist Sara Lobkovich breaks down the most common goal-setting methods, helping you choose the right one for your needs. Whether you're fine-tuning personal performance or leading a high-stakes team, this guide will help you set better goals, faster.
Key Takeaways:
KPIs are indicators, not goals - they're the metrics we watch to ensure we're on track
SMART goals are great for accountability, especially when quantifying activity
OKRs help us set stretch goals for uncertain territory and foster continuous learning
Mandatory goals are the non-negotiables - the things we must achieve to avoid negative consequences
Your rhythm of business is more than just meetings - it's your entire performance culture
Highlights:
Sara's unique background in strategy, health coaching, and professional motorcycle racing
The pitfalls of relying solely on activity-based planning
How to write objectives that keep you motivated when the going gets tough
Why key results are powerful tools for neurodivergent brains
The importance of distinguishing between mandatory and stretch goals
Whether you're a seasoned executive or just starting your goal-setting journey, this episode will give you the tools to navigate the complex world of performance management. So grab your decoder ring, and let's dive in!
Want to learn more?
Watch the full-length replay of this video on YouTube here, check out Sara's No BS OKR Workbook or join her upcoming live sessions.
As an OKR coach, one of the questions I hear the most often is:
"What's the difference between acronym A and acronym B?"
So today, we're going to separate out the alphabet soup of goal-setting acronyms into its individual ingredients.
But first, in case we haven’t met…
Hi! I’m Sara Lobkovich!
I wear a few different hats that complement each other perfectly:
I work in the strategy and OKR space.
I'm a board-certified health and wellness coach, focusing on career wellbeing and organizing for career impact.
I'm the team principal for a professional motorcycle road racing team, handling everything from politics and sponsor support to athlete fitness and mental game preparation.
In addition to all of this, I'm a complete and total goal nerd. I've trained over two thousand objectives and key results coaches and led OKR adoption in multi-thousand person organizations, including Fortune 100 and 500 companies. My work isn’t limited to large organizations though: I also work with small, midsize, and solo businesses.
The Common Thread: High-Stakes Performance
What all these roles have in common is that they involve high-stakes situations. We have to get comfortable with change, be nimble, and be creative because we're not in control of our environment - whether it's sports, work, or our own bodies. It's all high-performance, high-stakes stuff that requires goal setting and behavior change support.
Building Your Goal-Setting Decoder Ring
Today, we're going to use analogies from these different parts of my life to build your decoder ring for goal-setting acronyms. We'll cover the alphabet soup of goal setting and some key terms. We'll also discuss when you might use each method.
The Universe of Acronyms
Let's look at the universe of acronyms we'll cover today:
KPIs (Key Performance Indicators)
SMART Goals
OKRs (Objectives and Key Results)
Mandatory Goals
Activity Goals or Plans
EOS (Entrepreneur Operating System)
ROB (Rhythm of Business)
BSC (Balanced Scorecard)
Activity Goals: Where Most People Start
Let's start with activity goals, because that's where most people begin their goal-setting journey. Activity goals are essentially plans - deciding what you're going to do and focusing on that.
The Problem with Activity Goals
While activity goals aren't inherently bad (after all, we have to do things to achieve something), they're incomplete on their own. The issue with relying solely on activity planning is that it can lead to overwhelm. How many items are on your to-do list right now? If you're like most people, it's probably more than your software can keep up with!
Activity goals or plans are just that - plans. They're subject to change based on how we feel when we wake up each day. If this is the only kind of goal-setting we're doing, there's not much to keep us on track when we have a rough day and don't want to stick to our plan.
KPIs: Indicators, Not Goals
Next, let's talk about KPIs or Key Performance Indicators. This is probably the term I get asked about most often.
What Are KPIs?
Here's the thing about KPIs: the term doesn't have a universal meaning. Everyone who uses it has a slightly different definition. But let's break it down:
Key Performance Indicator
It's right there in the name - they're indicators, not goals. KPIs are things we keep an eye on to make sure we're staying healthy. If our KPIs go sideways, we know we might need to pay attention. But they're not goals in and of themselves; they're indicators of our health.
Examples of KPIs
If we use a body-based example, KPIs might include:
Blood pressure
Waist-hip ratio
Sleep efficiency
Number of social plans made per week
Number of social plans kept per week
Resting heart rate
Bone density
KPIs are important because they're the metrics we're going to watch. If we need to maintain a metric or keep an eye on it because of potential concerns, that's a KPI.
SMART Goals: Specific, Measurable, Achievable, Relevant, Time-bound
SMART goals are another common approach to goal setting. The acronym typically stands for Specific, Measurable, Achievable (or Attainable), Relevant (or Realistic), and Time-bound.
An Example of a SMART Goal
In our body-based examples, a SMART goal might be:
"Engage in cardiovascular exercise for 30 minutes, four times a week, for the next three months, tracking progress with a fitness app."
This goal is:
Specific (cardiovascular exercise)
Measurable (30 minutes, four times a week)
Achievable (for most people)
Relevant (if improving cardiovascular health is important to you)
Time-bound (for the next three months)
The Pros and Cons of SMART Goals
SMART goals can be really helpful because they're specific and give us something concrete to aim for. They're often more effective at getting you off the couch than a vague plan to "work out more often."
However, SMART goals can sometimes lead to all-or-nothing thinking. If we miss a workout, it's easy to fall off the wagon completely and struggle to get back on track.
Mandatory Goals: The Must-Achieves
Before we dive into OKRs, let's talk about mandatory goals. These are the non-negotiables - the things we absolutely must do to avoid negative consequences.
Examples of Mandatory Goals
In the health space, mandatory goals might include:
Get at least 6 hours of sleep per night
Drink water every day
Take prescribed medications as directed
In business, mandatory goals might be things like paying your credit card bill or making payroll.
When we set a mandatory goal, our target is 100% achievement. We aim to accomplish these goals 100% of the time because they're that important.
OKRs: Objectives and Key Results
Now we come to OKRs - Objectives and Key Results. OKRs help us identify targets we're aiming for when it's too uncertain to forecast, but we want to give ourselves something to aim for that might be possible if everything went right.
Objectives: What's Important and Why It Matters
The formula I use for an objective is: What's important? Why does it matter?
An example objective might be: "Become the healthiest version of myself to age with grace."
What's important? Being the healthiest version of myself.
Why does it matter? I want to age with grace.
Your objective gives you an idea of what direction you're heading in and why it matters to you. It's like a tiny love letter from your idealistic self to your future self that's going to get frustrated and challenged.
Key Results: Empirical, Data-Based Metrics
Key results align with our objectives. They are empirical, data-based metrics or measures that can be quantified. This includes data from our systems, but also things we can reliably observe or notice.
Examples of key results for our health objective might be:
Reduce blood pressure from 140/70 to 130/80
Reduce A1C (a diabetes marker) from 5.8 to 5.6
Increase VO2 max (cardiovascular efficiency) from 35 to 40
Remember, OKRs are about setting stretch goals for uncertain territory. We're going to be curious about how we do on these, not beat ourselves up. OKRs are about experimentation and continuous learning.
Bringing It All Together: Balanced Scorecard and Rhythm of Business
Finally, let's touch on two more concepts: Balanced Scorecard (BSC) and Rhythm of Business (ROB).
Balanced Scorecard: Your Holistic Dashboard
A Balanced Scorecard is like a holistic dashboard. It's where we decide which KPIs we need to see every day, which key results we need status on, and what our most important metrics are.
Rhythm of Business: Your Performance Culture
Your Rhythm of Business is all the things that make up your culture of performance. It's not just your meeting cadence, but also your communication norms, habits, rhythms for learning and feedback, and ways of recognizing each other.
Wrapping Up
That's it! We've covered a lot of ground today, from activity goals to KPIs, SMART goals, OKRs, and more. I hope this helps break down when you might use each of these in your business or work.
Remember, there's no one-size-fits-all approach to goal setting. The key is to understand the different methods available and choose the one that best fits your needs and situation.
If you found this helpful and want to learn more, check out my No BS OKR Workbook, available for download on my website. And stay tuned for my upcoming print books, including the full-length "You Are a Strategist, Use No BS OKRs to Get Big Things Done."
Thank you all for joining today. I'm grateful that you were interested and took the time to be here. I look forward to seeing you next week for another Goal Friday!
