Setting Effective Goals

How do SMART, OKRs, and BHAGs work?

There’s a difference between dreams and goals (and technically “vision” too, but I’m not gonna go there 🤣). Without goals, dreams can be hard to realize. And dreams can be about anything in your life, whether they’re for work, hobbies, or maybe even something completely new that you’ve never tried before. In the face of that ambiguity, you have to set some goals to be able to achieve your dreams. The issue though is how do you make goals that give you the best chance of success?

In this post, I’ll be talking about goal setting, specifically through the SMART, OKR, and BHAG frameworks.

SMART

The “SMART” in the SMART framework for goal-setting is an acronym, which stands for:

• Specific

• Measurable

• Achievable

• Relevant

• Time-bound

Before I get into what each of those mean, just a brief history lesson. SMART was originally introduced back in 1981 by George T. Doran in an article he wrote for the business publication Management Review. Since then, SMART has become a very effective way for businesses to do Project Management and it has been extended to be applicable to all levels in a company, not just the upper echelons of management.

Specific

When a goal is specific, it states what it’s meant to achieve. Is there a new feature you want to build? Is there a process improvement that you want to make? Do you want more teams to adopt usage of your product? Think of the S in SMART as a one-line summary of what you want to achieve.

Measurable

Measurable means that for whatever goal you’ve set, you can define metrics for success. If you have metrics, then progress toward the goal is measurable. For example, if your goal is to make a process improvement, by how much? Saying that you want your process improvement to save 20% in person-days of effort is more measurable than “I want my process improvement to result in a speed up”.

Achievable

This one is a bit harder than the other two above it, because this is where reality checks come in. You want your goal to result in personal or organizational growth, but it shouldn’t be so ambitious that it’s not actually achievable. This is where you start looking into external factors that could affect chances of success, or assumptions you are making about working toward your goal. Continuing the example of process improvement, is there a physical limit to how much faster you can make something? Or did you assume that everyone on the team will start using your new process, with 0 ramp-up time? These are important questions that can frame your thinking about how achievable your goal is.

Relevant

Anyone can make goals, but goals that are useful require deeper analysis. The goal you are setting for yourself or for your organization has to be meaningful and it has to fit within a larger context. The motif in your mind for this aspect of the SMART framework should be "“Why”. Why is this goal relevant to achieve?

Time-Bound

Goals that have all of the above characteristics can have progress made against them, but at what pace? Time-bound goals allow you and/or your organization to say, “Hey, for this goal, we’d like it done by Q2”. Putting an explicit deadline on the goal provides a marker in time that all teams can align on and execute toward, which will also lend itself well to prioritization. Not all aspects of your original goal may be achievable by the deadline, so you need to focus on the highest-priority aspects.

OKRs

OKR is another project management acronym, this one introduced by Andrew Grove, of Intel fame, in the 70s. It stands for Objective & Key Results. John Doerr, who worked at Intel and learned of OKRs from Grove, later showed Google in the late 90s about OKRs while he was working in venture capital. OKRs became a core part of Google’s culture and were also adopted by many subsequent major tech companies.

For a good primer on OKRs, I recommend reading John Doerr’s book "Measure what Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs"

The “Objective” part of OKR makes sense. It’s kinda like the “S” in SMART in that it states a “What”: What you want to achieve. The “KR”, or Key Results, are outputs, not behaviors. A good way to view it is if you do the objective, what do you want it to result in?

Google also has two different kinds of OKRs:

• Committed OKRs

• Aspirational OKRs

Committed OKRs are, well, commitments. They state that a team or org will do something to achieve something measurable, in service of themselves, or a larger project. The “or a larger project” clause I added is reflective of the fact that OKRs fit in very well with cross-org projects that require multiple teams to commit to delivering features to make the overall project succeed. For example, a web app probably has frontend and backend teams working on it and those teams will each have OKRs, specifying what they will achieve in the quarter in service of a larger project.

Aspirational OKRs are a bit non-intuitive because they are designed to not actually be fully met. They should stretch a team to see how its capacity for innovation and barrier smashing grows while tackling hard, ambiguous, and large-scope OKRs.

Note: Both Committed and Aspirational OKRs need to stretch a team, so that it grows, but they do so in different ways. Committed OKRs are specific and are intended to be fully achieved. They still require interpersonal and technical growth, rather than continuing exactly-as-is. Aspirational OKRs are difficult because they can be quite ambiguous and bold at the same time.

The reason for the split between Committed and Aspirational OKRs is that a company has to know how to prioritize its resources toward things that push the business forward in the shorter term vs. the longer term. Aspirational OKRs are more focused on “what do I want my future or my customers’ future to look like?”

BHAGs

BHAG stands for Big, Hairy, Audacious Goal and is pronounced as “Bee-hahg”. The BHAG acronym comes from the book “Built to Last: Successful Habits of Visionary Companies” by Jim Collins and and Jerry Porras.

They are kind of like aspirational OKRs, but they’re closer to visions or moonshots. They are meant to be company-wide and inspirational, a rallying cry that all employees can stand behind. They should stimulate employees to be creative and to want to execute on a long-term vision to build the future they want. By “long-term”, I mean decade-long.

An example of a BHAG was the NASA moon landing in 1969 (see, I even used “moonshots” earlier as a signal about what I was gonna mention 🤣). And President John F. Kennedy stated it:

“This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to earth.”

There are 4 main types of BHAGs:

• Role Model: Mimicking or emulating stand-out characteristics of a good company that is not necessarily your competitor (could be in an entirely different industry). Phrases that evoke this type of goal are: “the Uber of…”, “the Google of…”, etc.

• Common Enemy: Overtaking a larger company from its top spot in the industry.

• Target-Oriented: A clear, but ambitious metric target, such as becoming a trillion dollar company by year 2025.

• Internal Transformation: Inward-facing goal to remain competitive or to revitalize efforts in a space or industry.

Conclusion

As you can see from reading this post, there are multiple ways of thinking about setting goals, in the ways of the SMART, OKR, and BHAG frameworks. And they are not mutually exclusive either. You could have an org that has both OKRs and BHAGs, or even all 3.

Personal note: In the orgs I have been in that used SMART, OKR, and BHAG frameworks, they normally had SMART at personal level, OKR at team level and BHAG at org or company-wide level.

I hope this post helped to show effective ways of setting goals that you can apply to your own life. If you have any questions, do feel free to drop a comment. And if you liked this post, subscribe so you get notifications for all my upcoming posts on Builder Mentality 😃!