What is Goal Setting?

OKRs serve as a goal setting methodology. But before jumping into them in more depth, you should really understand what the term “goal” actually means. You’ve probably heard of different terms like goals, targets, OKRs, and Key Performance Indicators (KPIs)/metrics. In many cases, these terms get mixed-up. Some of these terms overlap or are synonyms as well. Each of them needs to be defined so there’s no real confusion. 

What are goals?

Goals in a business are something that a company plans to achieve in the future. A goal is the result you want to obtain. At their core, goals are all about commitment. They give a business direction and help you focus on what’s important. Goals are usually aspirational and focus on the largest aims of the company. Depending on the level though, goals can fill specific niches based on development needs as well. 

Company goals should be known by everybody in the company and planned initiatives should help your company move towards those Goals. 

Goals vs Objectives

The line between goals and Objectives is so thin that it basically doesn’t exist. They both represent a desired result or achievement. There are different theories saying that goals are usually more long-term and cover the big picture and Objectives are more specific, actionable and set short-term.
Separating goals from Objectives may be relevant to some goal setting methods but it’s definitely not needed while using OKRs. We say it’s the same! Trying to separate those two terms doesn’t actually give you any value, so why bother

What goals aren’t i.e. what are KPIs/metrics and targets?

KPIs/Metrics and targets are important terms for understanding how your company is doing. KPI/Metrics are business measurements and mean the same thing. These measurements represent how the company is performing. Tracking company KPIs helps your understand if the company is in a healthy state or not. It’s important to determine what are the things you need to measure in your company. It could be churn rate, MQL, NPS, etc. depending on what your company is doing. 

Targets are performance levels which you set for your KPIs/metrics. For example, sales people can set a target for how many customer meetings they need per month. While the metric is the number they actually achieved. 

The difference between goals and KPIs/metrics and targets is that a goal is something you want to achieve, while KPIs/metrics represent where you are and what numbers you are hitting on a daily basis to keep the company running. If company KPIs are performing well you don’t need to take any extra actions on them. Goals are something that are in the spotlight and they are all about taking different actions to achieve them. KPIs/metrics and targets that represent the current situation, while goals point you in the direction where you want to go. 

Goals can also be set for the strategic direction of the company. That means, goals tend to come from KPIs/metrics which aren’t meeting their targets or from a strategic decisions (i.e. expanding to a new country/region, or deciding what a company will focus on to differentiate).  

Your goals are set, what’s next?

Goals are driven forward by initiatives. If goals answer the question “where”, then initiatives are the “how” part. We like to use the term initiatives, but you may use different terms like – plans, tasks, (key) actions, projects, etc. Goals definitely aren’t just a list of initiatives because completing one doesn’t mean that the outcome is what was expected. 

Initiatives are important because if you don’t focus on your goals and don’t have a plan for how to achieve them, then there is a big chance you are going to fail. Whenever your goals aren’t moving forward you need to change what you are doing or try new initiatives. It’s crucial to have a readiness and open mindset to change methods or try new things in your Company when you are trying to take it to new heights.