CAPITALIST NOTE: The email below is a summary I sent to a client last weekend. For background, the client is a technology company with 500 employees, and they've made a real run at goal setting in 2021. They rolled out training on SMART goals with my BOSS Leadership series, have really stayed with it post training, and the CEO has gone through her own key area +KPI (Key Performance Indicators) process to establish some "big rocks" designed to measure progress apart from the SMART goal activity that's going on at the grass roots level.

Investors in the company have introduced the concept of OKRs (Objectives & Key Results) to my leader in the last two weeks, and she asked me for my take on how OKRs, KPIs and SMART goals can play together. Below is the rundown I sent over. I thought it was a meaningful question, and my response reinforces that terminology/methodology can often get in the way of just getting stuff started and done. Enjoy!

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Jill -

Good connecting with you on Friday.  I spent some time this weekend thinking about your question on OKR/Smart Goals. I think they can go together 100% from my perspective.

I could write up something from my research and claim it as my own, but here’s the best rundown I could find, which directionally sets up what I would have told you on Friday if I was on a call with the consultant in question and forced to take a position.

https://www.perdoo.com/resources/okr-vs-smart-goals/

Simply put, I think you can have both. I think your process at the top—where you are focused on KPIs—is similar in my eyes to OKRs.  With your KPIs, you’re identifying a broad area, then you're setting a measurable goal (the KPI). I think any adjustment to looking at OKRs should probably first address the question: What additional work do we need to do on these KPIs to modify them and evolve them into OKRs? I feel like you’ve already done a good bit of this work at the company level.

There might be an opportunity to create departmental KPI/OKRs at the next level down in your company, but candidly, I feel like you’ve done that with your work at the company level.

I think the SMART goal process still works. As the referred link mentions, it gives your people a consumable process that’s easy to understand with goal setting. That’s a good thing. Also you’ll see in the referred link that they say SMART goals exist in isolation. I think that’s true but necessary. You want the manager and employee to work on goals together and figure out what the most important things are to create goals within the employee’s area.

But the link between OKR/KPIs that we had talked about—going out and collecting SMART goals that contribute to individual OKR/KPIs—still stands. In this way, you can create a OKR/KPI and track it, and talk openly about the “big goal” but reward linkage that happens with the SMART goal process.

As I mentioned on the call, execution is still the key. The hard work of your managers working through the goal setting process with their people is where the true magic happens in my eyes.

To summarize from my view:

• Your KPIs are close to OKRs.
• You’ve already done a lot of the work if you want to move to OKRs.
• The SMART goal process is still a great way to make goal setting accessible for the masses and get some traction.
• The hard work is still at the manager/employee level to use goal setting to get better results and velocity at the ground level.

Does this help? Ping me back with questions or we can jump on a call.

--KD