All You Need To Know About Setting S.M.A.R.T Goals For Your Small Business
What Are SMART Goals?
Introduced in 1981 by George T. Doran in a Management Review paper, S.M.A.R.T. goals are a way for management to structure it’s goals and objectives.
The acronym is easy to remember, S.M.A.R.T. goals must be:
Specific – What specifically are you looking to accomplish. What is the result you are looking to achieve?
Example: Grow software sales
Measurable – How will you determine if you’ve achieved your goal in an unambiguous way. This is typically some kind of number. What I like to call a “target”. It’s the center of the bulls-eye.
I like to link every goal to a KPI or Key Performance Indicators. You can read about KPIs by going here.
Example: The target is $5.0M. By the way, this goal could be broken down into monthly increments.
Achievable – Each goal must be challenging, but achievable. Ask yourself the question, “do we have the resources, skills and knowledge to achieve this result”?
This can be a difficult question to answer sometimes which is why it’s critical that you can the folks actually responsible for delivering the result are involved in the goal setting process.
Example: We have a team of 4 salespeople, each with a quota of $1.25M. Last year they each did $1.2M. This represents a 4.2% increase over last year. We have increased marketing spend to generate more opportunities.
Relevant – Ask the question, “Does this goal align with, support, or advance the organization’s vision, mission, values, principles, and strategies”?
This is where we test whether the goal is part of an overall strategy of the organization. Often people are working on things that don’t align with what the organization is trying to accomplish.
Example: As part of our strategic planning process we’ve decided we want to grow the business 5% by offering our products and services to a new market segment.
Timely (or Time Bound) – Does the goal have a “due date”. When can we expect the result to be delivered?
Example: By December 31st, 2017
What Are SMART Goals?
Introduced in 1981 by George T. Doran in a Management Review paper, S.M.A.R.T. goals are a way for management to structure it’s goals and objectives.
The acronym is easy to remember, S.M.A.R.T. goals must be:
Specific – What specifically are you looking to accomplish. What is the result you are looking to achieve?
Example: Grow software sales
Measurable – How will you determine if you’ve achieved your goal in an unambiguous way. This is typically some kind of number. What I like to call a “target”. It’s the center of the bulls-eye.
I like to link every goal to a KPI or Key Performance Indicators. You can read about KPIs by going here.
Example: The target is $5.0M. By the way, this goal could be broken down into monthly increments.
Achievable – Each goal must be challenging, but achievable. Ask yourself the question, “do we have the resources, skills and knowledge to achieve this result”?
This can be a difficult question to answer sometimes which is why it’s critical that you can the folks actually responsible for delivering the result are involved in the goal setting process.
Example: We have a team of 4 salespeople, each with a quota of $1.25M. Last year they each did $1.2M. This represents a 4.2% increase over last year. We have increased marketing spend to generate more opportunities.
Relevant – Ask the question, “Does this goal align with, support, or advance the organization’s vision, mission, values, principles, and strategies”?
This is where we test whether the goal is part of an overall strategy of the organization. Often people are working on things that don’t align with what the organization is trying to accomplish.
Example: As part of our strategic planning process we’ve decided we want to grow the business 5% by offering our products and services to a new market segment.
Timely (or Time Bound) – Does the goal have a “due date”. When can we expect the result to be delivered?
Example: By December 31st, 2017
A History Of SMART Goals
In 1981, George T Doran (8/4/39 – 11/30/11) was published in the November issue of Management Review.
Dr. Doran is credited as being one of the first to use the “SMART” acronym although other management thinkers like Drucker had used the concept at an early date without specifically using the acronym.
Drucker’s concept for setting goals followed the “MBO” methodology or “Management by Objectives” which was outlined on Druker’s 1951 book “The Practice of Management“. Drucker introduced a five-step MBO process, where organizational objectives (goals) are set, cascaded through the organization, monitored, evaluated and rewarded. It is expected that each objective be SMART goals.
You can actually watch a video of Dr. Doran speaking about the SMART acronym.
In the video Dr. Doran speaks about the fact that the SMART goals framework is a “tool to get results” not a “checklist” to be followed.
Dr. Doran’s work built on Locke’s work on goals Locke is considered the “father of goal setting theory”. His research focused on how goals drive motivation and influenced by an individual’s cognitive functions and will. He also researched how goals impact task performance (drive results).
Why Are SMART Goals So Important For Your Small Business?
You might think that the answer to this question is pretty obvious.
If we don’t have SMART goals, we won’t achieve the results we want to achieve. Yet, so many small businesses don’t have goals. They are just bumping along hoping that they will have enough cash to make payroll or that the prospect will say yes to their proposal or that they can find the right person to hire.
Goals are strategic (or they should be) whereas many small business owners are stuck in the day to day tactical.
The fact is, if you want to get out of the day to day state of constant chaos, you need to establish SMART goals.
SMART goals give your business direction and focus.
SMART goals help you to decide what to focus on and what NOT to focus on.
SMART goals keep you from getting pulled away into activities which do not help you move the business in a positive direction.
Your business will not magically drift into a better version of itself. You must guide it there and SMART goals can help you do that.
Why Are SMART Goals So Important For Your Small Business?
You might think that the answer to this question is pretty obvious.
If we don’t have SMART goals, we won’t achieve the results we want to achieve. Yet, so many small businesses don’t have goals. They are just bumping along hoping that they will have enough cash to make payroll or that the prospect will say yes to their proposal or that they can find the right person to hire.
Goals are strategic (or they should be) whereas many small business owners are stuck in the day to day tactical.
The fact is, if you want to get out of the day to day state of constant chaos, you need to establish SMART goals.
SMART goals give your business direction and focus.
SMART goals help you to decide what to focus on and what NOT to focus on.
SMART goals keep you from getting pulled away into activities which do not help you move the business in a positive direction.
Your business will not magically drift into a better version of itself. You must guide it there and SMART goals can help you do that.