Many organizations tout goals as a means to keep a business moving forward or to evaluate employees. A recent study shows that those who write down goals, and commit to them with another person, accomplish significantly more.
How can you write goals that can help you accomplish more? One common approach is the SMART goal. Many organizations have taken this acronym and adapted it to their own purposes; this article will focus on one popular definition.
Before we get to an explanation of the acronym, let's take a step back and understand the purpose of goals. In a business setting, goals for each employee should contribute to achieving overall, strategic business objectives. These business objectives may be to correct problems, such as weak sales, or to grow the business by entering a new market. The goals of each staff member, then, should support those corporate-level goals.
Now that we have a context, let's get back to the SMART acronym. For our example, SMART criteria stands for
Let's explore each acronym letter and build a SMART goals template that you can use for your own goal setting.
For our example, we'll look at Chris's company, which had flat sales the past year. Flat sales can indicate a bad product, no available new customers, a new competitor, or an ineffective sales team. In this case, Chris knows the sales team is ineffective and wants to provide better training to the sales team members. Let's build Chris's business goal, then we can look at a goal for a member of the sales team.
For our template, we'll use the format, "The business problem is __________."
If you've done your homework to understand the "why" of your business problem, you have your starting point for specific.
For our template, we'll use the format, "I will ____________ (what?)"
In Chris's case, a vague business goal might be "improve our bottom line". However, a better bottom line can come from reducing costs, raising prices, or increasing sales. Chris knows his prices are competitive and his costs are about at industry average. Instead, Chris wants to focus specifically on increasing the number of sales per month. Thus, “We will increase sales over the previous year.”
Next, you'll need to attach a number and unit of measure (like dollars, dollars per sale, number of new customers, etc.) You can use an absolute number, such as "increase monthly revenue to $20,000"; a percentage, as in "increase revenue 12% per quarter"; or a ratio, such as "increase inventory turnover to 4 to 1". Attach your measure to the specific improvement.
For our template, we'll use the format "by __________ (number) __________ (unit of measure)"
In our example, Chris would like to see a sales increase of 14% over the same month the previous year, that is, January's sales should be 14% more than last year's sales in January. The number will be “14”, and the unit is “percent/month”. Thus, “We will increase sales over the previous year, by 14% per month”.
This dimension is not really part of the formula, but serves as a reality check on the goal. Remember, though, that "achievable" doesn't have to mean "easy". Stretch goals are still achievable. A famous example of a stretch goal was set by U.S. President John F. Kennedy in 1961: to send an American safely to the moon before the end of the decade.
The goal should relate back to the business problem. It responds to the the "why" of that problem and increases the specificity of the action with a concrete course of action.
For our template, we'll use the format, "by ___________ (specific course of action)"
In our example, Chris knows the problem is in training and sales tools. For Chris's business goal, we'll add the phrase, "by creating customer-centric training tools for the sales team", meaning they will research customers to see what is effective in the current sales effort, and provide training that helps focus the pitch on solving customer problems. Thus, “We will increase sales over the previous year, by 14% per month, by creating customer-centric training tools for the sales team.”
Finally, the goal should have a delivery date or a time-frame. Even if the delivery date is assumed to be the end of the year, remember that writing down the goal improves the likelihood of success.
For our template, we'll use the format "by ___________ (date)"
In our example, Chris wants to see improvements happen within two months after the sales team completes the new training. His final goal is: “We will increase sales over the previous year, by 14% per month, by creating customer-centric training tools for the sales team, results by two months after delivery of training.”
"The business problem is __________.
I will __________ (end result) by __________ (number) __________ (unit of measure) by __________ (specific course of action) by __________ (date)."
Imposed goals can have unintended consequences. For example, Sears once set a goal of increasing the total sale per customer. Unfortunately, sales staff achieved this goal by overcharging customers! Goals must be framed and monitored to ensure they are not going awry.
One way to achieve this is to iterate the goal-setting process at more granular levels. Tailoring individuals' actions to the overarching goal will provide guidance and forestall unintended consequences.
While Chris needs the sales team to implement the business goal, each team member can also create their own goals. Pat's individual goal focused on taking a lead in developing the training and learning more about customers and their problems.