SMART goal setting

Goal Setting: How to Set SMART Goals in Business

When people in an organisation know they are working toward an important goal, they think and act differently. However, simply having goals isn’t enough; the goal-setting process must be strategic and well planned: you need to make SMART goals in business.

Having goals of any kind is almost always a good thing for an organisation but regular goals do come with a few shortcomings. For starters, their typically arbitrary nature means that even if you achieve your goal it may not really end up being of any significant benefit to your organisation.

Other times, organisations set goals that are not truly achievable. While these goals may make for grand announcements and still inspire the people to push themselves above and beyond their usual, they often lead to more destructive frustration and disappointment when they are ultimately not achieved.

Regular goals may also be hard to quantify, making it difficult for the organization to determine whether or not it is making any real advances toward its desired goal. Relatedly, unless regular goals are time-bound, it’s too easy for an organisation to end up in a state of limbo where it never really abandons the goals and yet never really achieves them either.

This is where SMART goals in business come in to address all of the flaws that come with regular goals in order to provide your organisation with the best possible set of goals for its growth. They help you save time and energy by making the process of goal setting more efficient and productive.

What are SMART goals?

SMART goals are defined as goals with specific criteria – criteria which are easily remembered by using the acronym SMART, for “Specific”, “Measurable”, “Achievable”, “Relevant”, and “Time-Bound”.

Specific: goals should not be vague and obscure but rather clear and concise.

Measurable: goals should be quantifiable in some aspect so that progress can be tracked.

Achievable: goals should be challenging yet achievable not impossible and hence disappointing.

Relevant: goals should add value upon achievement and align with some other goals you have.

Time-Bound: goals should have a target time attached to them to keep motivated alive.

The first-known use of the term SMART occurs in the November 1981 issue of Management Review by George T. Doran. SMART goals in business are also commonly associated with Peter Drucker‘s management by objectives concept and also got a big boost in popularity when Professor Robert S. Rubin wrote about them in an article for The Society for Industrial and Organizational Psychology.

 

10 examples of SMART goals in business

When coming up with SMART goals in business, it’s a good idea to write down each of these criteria then write a sentence or two about how your goal fits each one. If you can write a goal that fits each of, you are sure to come up with a SMART goal that is definitely much more beneficial than a regular goal.

Regular goal: I want to save money.

SMART goal: I want to raise $50,000 (measurable) worth of business capital to start my own custom tee shirt startup (specific) so that I can quit regular employment (relevant) by saving $10,000 a year from my salary (achievable) for the next five years (time-bound).

Regular goal: I want to start a business.

SMART goal: I am going to set up an Etsy store to sell custom tee shirts (specific), which will allow me to make a living from my favorite hobby (relevant). Within 10 weeks (time-bound), I will have an inventory of 50 custom tee shirts to sell and aim to sell a minimum of five tee shirts per week (measurable), building customer relationships through word of mouth, referrals, and local networking (achievable).

Regular goal: I want to grow my business.

SMART goal: I will acquire 10 new clients (measurable) for my custom tee shirts (specific) within two months (time-bound) by launching a social media influencer marketing campaign and offering special discounts (achievable). This will allow me to grow my business and increase my revenue (relevant).

Regular goal: I want to increase sales.

SMART goal: To meet the sales objective of booking $100,000 in annual orders (relevant), five additional salespeople will be hired (achievable) to grow sales of (specific) by 5% in the first quarter, 10% in the second, 15% in the third and 20% in the fourth (measurable and time-bound).

Regular goal: I want to improve product quality.

SMART goal: To meet the company’s annual goal (time-bound) of reducing defects to less than 2% of shipped product (relevant), a new test and inspection procedure (achievable) will reduce the shipping of torn shirts by 10% per quarter (specific), with data tracked weekly (measureable).

Regular goal: I want to reduce staff absences.

SMART goal: To meet the practice goal (relevant) of a 50% reduction in staff absences (specific) by the end of the financial year (time-bound), management will implement a new reward system and more flexible working schedule (achievable), with attendance results tracked quarterly (measurable).

Regular goal: I want my customers to pay faster.

SMART goal: Eliminate mistakes in customer invoicing (specific), the key driver in long payment times (relevant), through new accounting system and clerical training (achievable), to be implemented over a three-month term (time-bound); results to be tracked monthly to stay on track to goal (measurable).

Regular goal: I want to reduce my business costs.

SMART goal: To meet the company’s cost reduction (relevant) goal of 20% (specific), management will focus on reducing production errors such as wrong designs (achievable), by 10% per month for six months, then 5% for six months (time-bound), tracked every two weeks (measurable).

Regular goal: I want to write a business book.

SMART goal: In order to establish myself as an expert (relevant), I will write a 350-page book on clothing (specific) by writing one chapter of 30 pages per month i.e. a page per day (measurable). The book will be completed in 12 months, (time-bound) and then I will self-publish on Kindle (achievable).

Regular goal: I want to become a well-known expert.

SMART goal: I will hire a PR firm and launch a publicity campaign (achievable) to establish myself within three years (time-bound) as a well-known expert in clothing and fashion (specific) who speaks publicly on the topic at least once a month, is interviewed every week and writes one article per month for a top industry publication (measurable). This will underpin my position as a thought leader (relevant).

 

how to set smart goals

Photo: Pexels

Why are SMART goals effective?

SMART goals in business give an organisation and its employees purpose, which inspires passion, loyalty, drive, productivity and high performance through clear and open communication. With SMART goal setting, everyone knows exactly what the priorities are and what is expected of them.

SMART goals help employees enjoy increased focus, increased motivation, improved team work, and an increased sense of worth from being able to quantify their progress. As employee performance improves, managers are in turn likely to overcome common managerial pitfalls like micromanaging, poor communication, and scattered focus.

SMART goals help managers effectively create the focus and drive that employees need to constantly operate as high performers.

SMART goals help employees enjoy increased focus, increased motivation, improved team work, and an increased sense of worth

How to make SMART goals a habit?

In order to make setting SMART goals in business a habit in your organisation you need to encourage employees to see both the big picture and also to break it down into smaller actions. The smaller the steps, the easier it will be to make forward-moving progress and build momentum to reach the goal.

It is key to develop and use a systemised formula where you write everything down so you have a record of what you are aiming for and how you intend to achieve it, for example the SMART worksheet below:

Specific: What will the goal accomplish? How and why will it be accomplished?

Measurable: How will you measure whether or not the goal has been reached (list at least two ways)?

Achievable: Is it possible? Have others done it successfully? Do you have the necessary knowledge, skills, abilities, and resources to accomplish the goal? Will it challenge you without defeating you?

Relevant: What is the reason, purpose, or benefit of accomplishing the goal?

Time-bound: What is the established completion date and does that completion date create a practical sense of urgency?

 

smart goals in business

Photo: Pexels

Further reading

SMART Goals: How to Make Your Goals Achievable

How To Make Ambitious And Achievable Goals For Great Success

Charles Duhigg on the Power of Setting Smart Goals

5 Elements of a SMART Business Goal

Writing S.M.A.R.T Goals

In Summary

When it comes to growing strategically and developing an engaging company culture, goal setting is a major key.

When an organisation has clarified its goals, and when teams understand how their own goals will help the organisation achieve them, productivity and engagement both increase.

Goal setting is at the heart of a healthy organisational culture and setting SMART goals in business is the way to go.