Why are SMART Goals Necessary In Business?
If you’re in business, it goes without saying that you want to be a success. But what is the definition of success? To decide that, you need to set yourself goals. But not just any goals. You need SMART goals.
Why should you use SMART goals?
It’s not enough to declare that you want to increase your turnover or open two new branches. That’s vague thinking. The truth is, the best goals in business are SMART goals.
Clearly, SMART is an acronym. It stands for Specific, Measurable, Achievable, Relevant and Time-bound.
SMART goals are strategically designed to give any business project structure and support and to set out more clearly what you want to achieve – and by when.
With SMART goals, you get to track your progress and stay motivated. Assessing your progress keeps you focused, helps you hit your deadlines, and creates a sense of excitement when you get nearer to hitting your targets. SMART goal-setting can also stop you feeling overwhelmed by the enormity of a project.
Let’s look more closely at each of those five elements.
What are SMART goals?
Firstly, let’s clear up where the term began. SMART goals were born in 1981, when George T. Doran, a consultant for the Washington Water Power Company, published an article in the November issue of Management Review. “There’s a SMART Way to Write Management’s Goals and Objectives” introduces SMART goals as a way of setting out criteria that improve the odds of achieving a goal.
What do you truly want to accomplish? Specifically. You might have written mission statements before. Well, this is the mission statement for your goal. To help formulate some answers here, think about your goal in terms of the six Ws:
- Who will you involve to help achieve the goal? A question that is especially important if you’re getting a team involved.
- When do you want to complete the objective? More about this under ‘T’, but it’s prudent to have a broad timeframe.
- What are you trying to achieve? Be precise and detailed.
- What obstacles stand in your path? Identifying potential hazards can help you determine if your goal is feasible. As an example, if you aim to open a copywriting business, but you’ve never written copy before, maybe adjust your goal to “Learn how to write copy so I can start a copywriting business.”
- Where will this happen? Not always applicable to everyone but if you specifically need things to happen in Edinburgh or New York, say so here.
- Why are you doing this? What’s the purpose of the goal? If you’re self-employed, the answer will probably be to drive the business forward. But try to make this a more-specific objective. For example, ‘to take 22 percent market share off Competitor X’.
How will you measure progress against your goal? Making goals measurable ensures that they’re more tangible and attainable. It gives you a way of evaluating progress. Will the project take a few weeks or more? Consider setting a few milestones along the way by thinking about what micro-tasks you or your team can complete at various points.
How important is the goal to you? How can you make it happen? Do you need to develop new skills or embrace new technology? It’s key not to get discouraged. Goals are designed to motivate you, to get you out of bed each day determined to move one step closer.
So what do you need to do to achieve the goal? Can you get there within your current skill set? Think about what needs to change to get you there.
Relevance means focusing on your wider business goals. You might be launching a new product. So your goals should be in tune with the business’ overall objectives. Your team might have a product that’s ideal for the Chinese market, but if Far-East expansion isn’t on the company’s agenda, it’s not a worthwhile goal.
You could say, “I’m going to increase productivity by 23 percent,” which would be nice and specific. However, as a goal, it’s useless without setting a specific timeframe in which you want things to happen. You’ll put events off, you’ll let things drift, and it won’t seem to matter because you hadn’t nailed anything down to a set timeframe.
Coming up with a realistic deliverable date is vital. You’ll have to ask yourself precise questions about the timeframe you set and whether it’s genuinely feasible. Work backwards and see if your various staging posts will work. Then add in a little wriggle room in case of unforeseen circumstances.
If you decide your goal will take nine months to achieve, determine what you should have achieved by three months, or at the halfway point, or after six months. With time constraints in place, you’ll have a sense of urgency.
How do you write SMART goals?
You should start by asking you and your team a bunch of questions, thereby defining your strategy. Hopefully, you’ll end up with something that’s attainable. Try to be realistic, but not too conservative. Writing SMART goals is a positive move – giving you something to strive for.
Don’t be put off by this exercise. If you do it right, it should shed a lot of light on your business. Here, we’ve created two scenarios where you might write SMART goals. One’s for a project, and the other is for boosting performance.
SMART goals for completing a project
Remember what SMART stands for. Let’s address each of those letters in the formula in turn.
- Specific: The company is highly reliant on Google Ads to drive traffic to the website. However, this is an area where we’re underperforming. Keyword choice has been ineffective, and adverts have low click-through rates, with some being disabled by Google for poor performance. We need to improve the Google Ads performance by the end of Q3. We’ll need to involve the digital-marketing department, our Google representative and our digital agency.
- Measurable: By the end of Q3, we want to improve CTR (click-through rate) on our Google Ads account from an overall 1.25 percent to 4 percent. We also need to improve conversions by 15 percent by creating specific landing pages with a clear call to action.
- Achievable: Everyone who’s involved has committed the necessary hours to make this possible. Now we have to manage the project and create clear milestones that make sure everyone stays focused and on target.
- Relevant: Getting a higher return on investment in Google Ads and driving more inbound marketing is a crucial target for the business this year.
- Time-Bound: To improve the CTR to 4 percent by the end of Q3, an action plan will need to be in place by the end of Q2. We propose fortnightly meetings with all parties to drive these plans effectively. We’ll also need to continue these meetings after the end of Q3 to review how we’re doing against our target and make necessary adjustments.
SMART Goals for improving individual performance
- Specific: My latest performance review indicated that my presentation skills could be better. Since this is becoming an important aspect of my job – I have to present training courses as well as project updates to my team – it’s vital that I improve in this area. I’d like to be 50 percent better at making presentations, as judged by my immediate supervisor, by the time of my next appraisal in October.
- Measurable: By my next appraisal, I’d like to be 50 percent more confident addressing an audience, as measured by my supervisor. I’d also like to be able to put together a multimedia PowerPoint presentation in under two hours. I also want to be confident in creating PowerPoint templates for my colleagues.
- Achievable: Improving my presentation skills will involve setting aside time to attend short courses, watching courses on YouTube and taking advice from my supervisor and colleagues. I will need to allow two hours a week for this process.
- Relevant: Presenting to an audience right now takes up around one hour a week. However, as I progress in my career, it’s imperative to become more proficient as I’ll need to do much more presenting – perhaps up to five hours a week, or sometimes a full day if delivering a training course.
- Time-Bound: By the end of October, I should be confident enough to be 50 percent more proficient in presenting to an audience, as judged by my supervisor, and able to create PowerPoint presentations quickly. We’ll set progress-review dates at one-month intervals from now.
Having written your goals in the SMART format, you should then be able to combine them into one overarching SMART goal.
SMART Goal: Completing a project
- Description: Improving the firm’s performance on Google Ads is a key target this year. We’ll need to raise our overall click-through rate to 4 percent by the end of Q3 and improve conversions by 15 percent by creating bespoke landing pages with a clear call to action. We’ll involve the digital-marketing department, our Google representative and our digital agency.
- Milestone: Put an action plan in place by the end of Q2 through fortnightly meetings.
- Deadline: End of Q3.
SMART Goal: Improving my performance
- Description: To advance my career, I have to improve my presentation skills by 50 percent and be able to put together a multimedia PowerPoint presentation in under two hours. By taking courses and advice from colleagues and my supervisor, this should be achievable.
- Milestone: Progress reviews once a month.
- Deadline: By my next appraisal in October.
When SMART goals become SMARTER goals
In business, goalposts can move. And so must goals. That’s when you might have to create a SMARTER Goal. What does the E and R stand represent? Evaluate and Re-Do.
The theory is that you might need to evaluate your goals and reset them as circumstances dictate. Things change fast in business, so perhaps that goal you set a few months back is no longer relevant or needs to be tweaked.
One thing’s for sure – whether it’s SMART goals or SMARTER goals you put in place, you’ll discover that being clear about precisely what you want to achieve and when you want to accomplish it by can be the difference between success and failure.
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