Making this Year Count: How to Set SMART Goals
What are SMART goals and why is setting them so important for growing companies? With this easy-to-follow process you’ll keep your business focused and on track to make a big impact this year.
As your business kicks off a new quarter or a new year, there are likely several big things you’d like to accomplish.
Maybe you hope to increase sales, attract bigger, better customers, or turn your attention to renewals. Whatever your goals might be, the bigger question is will you focusing on them really move the needle? In other words, are they actually attainable and relevant to your company’s long-term strategy, or are they unrealistic at best, distractions at worst, and more likely to derail your progress in the short-term?
Ultimately, the best way to answer those questions is to ensure that the strategic goals you set for your business are S.M.A.R.T. (specific, measureable, attainable, relevant, and timely).
What are SMART Goals and Why are They Important?
SMART goals are specific results-based objectives that ensure your team focuses on (and effectively prioritizes) the activities, strategies, and initiatives that will have the greatest impact on your company’s short- and long-term aspirations.
Perhaps the best (and simplest) way to define SMART goals is to say that every objective you set must be:
- Specific: The goal must make it blatantly clear who is responsible for achieving it and what the desired outcome will be. It’s also important to communicate why a specific objective is beneficial to the company, when it must be completed, and what the requirements of completion are.
- Measureable: If you can’t track the progress of a goal with concrete criteria, then the goal is probably too loosely defined. If that’s the case, it will be difficult for stakeholders to assess where they stand relative to deadlines, milestones, and completion.
- Attainable: It’s one thing to be ambitious. It’s quite another to be unrealistic. Ensure that every strategic goal you set will motivate team members to push themselves and the business to the next level, without setting them up to fail.
- Relevant: While it might seem like a good idea to increase brand awareness in a new market segment, the reality is that if that objective doesn’t contribute to the most pressing opportunities and challenges your business is facing right now, it will likely prevent your company from moving forward.
- Timely: Every goal you set must have a timeline that creates a sense of urgency around that objective. Otherwise, your team will find it difficult to prioritize their initiatives and activities in a way that facilitates the completion of that goal.
As for the question of why SMART goals are important to your company’s ability to drive more effective growth in 2014, the answer is pretty simple.
As an expansion-stage company scales, the business naturally becomes more complex over time and the odds of losing focus go up exponentially. As a result, it can be very easy for company leaders to get caught up in the weeds and lose focus on the “big picture.” Establishing SMART goals at all levels within your company (functional and individual) can help you avoid that scenario by ensuring that everyone moves in same direction and focuses on the things that really matter.
3 Simple Steps to Setting (and Acting on) Better SMART Goals
So, what does a SMART goal look like?
In many ways, that depends on the complexity or specificity of your objectives. But here’s an example of the differences between a vague goal and a SMART goal from the Massachusetts Institute of Technology’s performance development program:
- Vague goal: Keep our department’s page up-to-date.
- SMART goal: On the first Friday of every month, solicit updates and new material from our department’s managers for the web page; publish this new material no later than the following Friday. Each time new material is published, review the department’s web page for material that is out-of-date, and delete or archive that material.
As you can see, the first goal leaves significant room for interpretation, and doesn’t make it clear how or when that goal should be accomplished. The SMART goal, on the other hand, provides clarity on what the goal is, when it should be addressed, and what needs to be done to achieve it.
With that in mind, here are three steps you should follow to learn how to set SMART goals for 2014:
1) Establish Your Top Priorities
As Ron Ashkenas points out in this Harvard Business Review post, the first step to annual goal setting is to really think about the one or two shifts that would make the biggest impact on the success of your team or business. Once you’ve identified those priorities, you can build your goals around them.
2) Break those Priorities Down into Action Items
The goals that you set for your business will likely involve the participation of several different departments within your organization, and several different roles within those departments. So, once you’ve identified your goals, make sure that you break them down into action items that align with the talent level, maturity, experience, and capability of each person who will play a part in accomplishing those objectives. For more on this topic, read this post.
3) Set, Measure, and Review Key Performance Indicators (KPIs)
The old saying, “You can’t improve what you don’t measure,” certainly applies to SMART goals. It is important to note the KPIs that will be most relevant to your SMART goals will largely depend on the team responsible for executing them. For instance, if you’re dealing with lead generation and your sales team, your KPIs may be based on calls, conversations, and generated opportunities. For more on how to set, measure, and review the right KPIs for your business, read this post.
It’s a New Year in the Life of Your Company: Don’t Blow It
The bottom line is that there is a significant amount of planning that goes into preparing for a new year, and the last thing you want to do is waste that time by focusing on the wrong things.
As you sit down to set your strategic goals, make sure that you emphasize the two or three things that your company must do to consider the coming year a success, ensure that those priorities align with your existing aspirations, and invest the time necessary to communicate those objectives to everyone on your team. That hard work will pay off with greater company-wide clarity and focus, and you will see improved execution and performance as it relates to strategic decision-making.
Additional Reading and Resources
- The Incredible Power of Company-Wide Goal Alignment & Organizational Business Goals by SuccessFactors
- How Google Sets Goals and Measures Success by Don Dodge
- What Really Matters: A Guide to Defining and Realizing Your Company Aspirations by OpenView
How does your company approach annual goal setting? And what advice would you give to fellow entrepreneurs who are setting SMART goals for the first time?
Image by Peter F.