216. Smart Goals For Business

    What are SMART goals and why are they important to business growth?

    The term SMART goals is an acronym and stands for

    • Specific
    • Measurable
    • Achievable or Assignable
    • Relevant
    • Time-bound

    Its criteria are commonly attributed to Peter Drucker's Management by Objectives concept. the first known use of the term was in the Nov 1981 issue of Management review by Dr. George T Doran. 

    You can check out this video where Dr. Doran explains this approach in his own words. 

    Interestingly, Dr. Doran uses the term Assignable rather than achievable in the acronym (which is what I've seen used all too often and I think that's not as good as an assignable goal when you have a business)

    Professor Robert Rubin later expanded on this and created the acronym SMARTER the last two letters in the acronym standing for Evaluated and Reviewed.

    Achieving your goals is more important than setting them, and that's where SMART goals come in.

    Your goals need to be aligned with your business' strategic objectives and your vision.

    SPECIFIC: 

    Setting specific goals helps you get clarity which drives motivation. Getting clear on the context of the goal often helps to increase your understanding of the goal and that leads to clarity and specificity. 

    Try asking yourself the questions that start with the 5 Ws when setting your goal:

    • What am I trying to accomplish?
    • Why is this goal important to me right now?
    • Who will be involved with this endeavor?
    • Where will I have to be located to achieve this?
    • Which resources will I need to involve?

    MEASURABLE

    • How will you know when you've reached your goal?
    • How many happy customers will you have?
    • How much revenue or profit will you have made by the end of the quarter?
    • How many new members will you have enrolled in your membership program?

    By having clarity around how you're going to measure your success you can track your progress which will help you stay motivated.

    Tracking your progress to your goal helps you meet deadlines and feel the excitement of getting closer to achieving your goal.

    ACHIEVABLE

    Setting unrealistic goals is demotivating. You need to ensure that your goal is realistic and attainable — ideally within the next 90 days.

    Your goal shouldn't be super easy to attain. It should stretch your abilities but not be completely out of reach. Here are some useful questions to ask to help you set an achievable goal include:

    • Can I do 10% better than I did last quarter?
    • Will I be able to achieve this goal given the various financial constraints we're working with right now?
    • Do we have the capacity to improve despite headwinds e.g. a contracting marketplace due to Covid-19?
    • Do I have the resources I need to achieve this growth?

    RELEVANT

    You should set goals that are relevant to you and your business. This means they should align with your overall business objectives and your vision. They should also not be in conflict with your other goals. 

    Here are some questions you can ask yourself to test for relevance:

    • Is this goal aligned with my company's vision?
    • Does this goal align with our company values or is there a conflict?
    • Is this the best time to work towards this goal? Are the market conditions favorable?
    • Or are we better off doing this at a different time of year?

    TIMEBOUND

    Without a clear target date, you won't have a sense of urgency which means you won't have agency.

    Here are some questions you can ask yourself:

    • When will I have achieved this goal by?
    • What milestones will I need to hit to achieve the goal and how will I measure my progress using those milestones?
    • What do I need to do to get started today?

    Resources Mentioned

     

    Action Step

    Download the worksheet and get your SMART goals down. Do it now.