Goal setting is an important part of managing a successful business. However, not all goals are created equal. In this article, we will focus on how to use data to set S.M.A.R.T. goals that are both actionable and effective.
Goals can provide a sense of direction, increase motivation, and boost performance. Moreover, goals help define a company’s purpose and justify its very existence.
What is a S.M.A.R.T. Goal?
S.M.A.R.T. goals follow five different criteria that set up a framework for guiding organisations through the goal setting process. That way, businesses won’t fall into the all too common trap of setting general, vague, or unrealistic goals. They will be set up for success and have a better sense of direction if you consider these criteria ahead of time.
S.M.A.R.T. goals are:
- Specific: You can clearly define the path towards achieving your goal and picture what success looks like.
- Measurable: You can track your progress in a way that motivates you to continue working towards your objective.
- Achievable: You have the necessary tools and skills to reach your goal, or at least have a plan for how to attain them.
- Relevant: You are focusing on an objective that makes sense within the broader scope and vision of your business.
- Time-Bound: You have a target date for deliverables to keep yourself on track and create a greater sense of urgency.
Setting Goals with Data
Once your organisation has a strong understanding of the S.M.A.R.T. goals framework, it’s important to step back and take a look at historical and competitor data. Setting benchmarks based off of this data will help you create goals that are particularly achievable and relevant for your business.
Historical data helps to ensure that goals are attainable. Look back on your performance and data from the past to determine realistic goals for improvement. For example, if you’ve been able to improve customer retention metrics by 5% every year, set your customer retention growth goal to 5%.
If you are making customer retention a priority this year and you want your retention numbers to grow faster than they have in the past, you may need to consider changing your existing process. You could start targeting customers with special offers or adding a more personal touch to your outreach and follow-ups, for example.
Estimate how much you are expecting these new processes to help. If your historical growth rate is 5%, you may be able to set a goal of 7% with your new strategy. Check to see if your lift estimate reached your goal and determine whether or not to continue with the activity based on its performance.
It is important to evaluate your business against the competition to see what benchmarks you should be hitting. Determine which key performance indicators (KPIs) would best indicate whether your business is on track to accomplish their goals or not.
When you research your competitors, look for those same metrics and KPIs. Just make sure to keep in mind the size, age, and average product purchase value of each competitor.
If you are running a social media startup, you may consider Facebook to be a competitor, but you shouldn’t expect to have a similar number of monthly active users.
They are a much larger company with more resources and years of experience, so you shouldn’t set your goals strictly based off of Facebook’s performance and success. Try to find organisations that are more similar in size and age to get a more realistic benchmark.
Tracking Your Progress
The most common reason that people don’t reach their goals is that they forget they set them in the first place. Companies need to prioritise and plan for how they will track their progress towards reaching their objectives.
It also helps to communicate important checkpoints to your team and set meetings to discuss key data that objectively informs everyone of the status of your goals.
Objectives & Key Results (OKR)
OKR is a goal system that is used to create alignment and engagement around measurable business goals and objectives. During the goal setting process, you get a good idea of what you want to achieve and how you are going to do it.
OKRs focus on the next step: Measuring achievement. The general idea is that every goal you set should have a “key result” attached to it. That way, you can more easily track your progress towards reaching your objectives.
The most common way to track your progress is by taking a look at performance data. How are your key performance indicators performing? The status of your KPIs should give you a good idea of what needs to be improved upon in order to achieve your goals. Ultimately, it’s all about figuring out a system, software, or tool that can help automate this step
One way to track all of your KPIs and other performance data in real-time is by implementing a business dashboard. Dashboards summarise live data with easy-to-understand visuals, so you can easily access the metrics that you need to make informed decisions. In these cases, such software as data room for due diligence can help very well.
Tips for Setting Organisational Goals
Researchers have found a strong correlation between a company’s financial performance and an effective goal setting process. While it’s important for employees to set individual goals, they also need to be able to understand how their efforts impact the overall success of the company.
When it comes to a goal, you can’t just “set it and forget it”. Goal setting is a continuous process that requires constant review and adjustments. Here are a few tips for implementing successful organisational goals.
Clearly define your mission and vision
All of your S.M.A.R.T goals should tie back to where your company is headed in the long-term.
Conduct a SWOT analysis
A SWOT Analysis can help you identify the strengths, weaknesses, opportunities, and threats facing your organisation. That way, you can structure your goals around what you can improve on.
If your goals are too large or seemingly unattainable, break them down into multiple steps and set target dates for the completion of each stage. As long as you stay on track, you’ll be able to complete even the most overwhelming goals.
Communicate with your employees
It can be helpful to get employee feedback and allow them to be involved in various steps of the process. Make sure that everyone in the organisation understands your goals and the reasons behind them before you set expectations and assign roles. There will need to be someone in charge of making sure everyone is on track, someone who manages the reporting, and more.
Monitor and review your performance
Collect data to help you monitor your performance toward each goal. Keep yourself constantly reminded of your goals by setting aside time to review them each day.
You won’t always set the right goals in the beginning, but it is important to be able to recognise that and make the necessary adjustments to get you on the right track to success.
Now we have covered the most effective ways to determine how to set S.M.A.R.T goals for your organisation. All the best of luck creating your own S.M.A.R.T goals using the data available to you.
About the Author
Samantha Marsh is the Marketing Content Coordinator at iDashboards, a data visualisation software company on a mission to transform traditional reporting into meaningful dashboards. Outside of work, she enjoys playing golf, listening to podcasts, and cheering on the Wolverines at the Big House.