The Leading Source Of Original Research And Insights On Business Model Strategy, Digital & Tech Business Models
What Are SMART Goals And Why They Matter In Business
A SMART goal is any goal with a carefully planned, concise, and trackable objective. To be such a goal needs to be specific, measurable, achievable, relevant, and time-based. Bringing structure and trackability to goal setting increases the chances goals will be achieved, and it helps align the organization around those goals.
“SMART” is an acronym which explains how a goal might be achieved. Here is a more detailed look at each letter in the SMART acronym.
S – Specific
When considering the goal, it helps to be as specific as possible. Many individuals and businesses set goals with arbitrary dollar amounts, such as becoming a millionaire or generation 10 million dollars in revenue. If the goal is to make a certain amount of money, a more specific objective may be to make $40,000 per month for the next 5 years by selling 2500 units of a new software product.
Here, it helps to ask questions. What is it, in exact terms, that an individual or business hopes to achieve? Where, how, and when will this occur? What are the reasons for setting the goal in the first instance?
M – Measurable
Measurable goals have metrics that are used to gauge progress. This is particularly important for large and complex goals that must be broken down into smaller steps. Measurable goals also let the individual or business know that they have reached the finished line.
A- Achievable
Goals must be realistically achievable, otherwise, the temptation may be to give up on achieving them entirely. Businesses should set goals that their employees could reasonably expect to see through – given the materials and resources at hand. It’s also important to identify any short or long term impediments that may divert these resources.
R – Relevant
Relevance means that individuals and businesses set goals that are aligned with their values and long-term objectives. There is no point setting goals for the sake of it – so ensure that the reasons for conceiving a goal are aligned with broader strategies and company culture.
T – Time-based
Goals by their very definition need a deadline, particularly in business settings. Time-based goals are also important in tracking progress and setting milestones. For example, a business wanting to double its revenue in 6 months would hope to increase revenue by 50% after the 3-month mark.
Some common mistakes when setting SMART goals
Vagueness
Clarity is key when setting SMART goals. A marketing department might not know where to start when presented with the goal of selling 5000 cars in the next 4 years. However, the more specific goal of selling 5000 small cars in Italy by the end of 2025 gives them something to work with.
No KPIs
If the goal is to improve customer service, then there must be a customer service KPI with which to gauge progress. Many businesses make the mistake of setting goals that simply can’t be measured. Here, quantitative or industry research is key.
Unattainability
If a business is particularly successful, it is easy to get carried away with goal setting. An ambitious goal of selling 1 million pairs of shoes in the next 5 years is daunting and maybe unattainable without the required due diligence. In this case, smaller goals of selling 20,000 pairs every 3 months may be more suitable.
Key takeaways:
SMART goals are those that are carefully planned against certain criteria to increase the chances of them being accomplished.
SMART goals are specific, measurable, achievable, relevant, and time-based.
Some common mistakes when setting SMART goals include those not backed by reliable KPIs or those that are simply unattainable in the recommended timeframe.
SMART Goals vs. OKR
Andy Grove, helped Intel become among the most valuable companies by 1997. In his years at Intel, he conceived a management and goal-setting system, called OKR, standing for “objectives and key results.” Venture capitalist and early investor in Google, John Doerr, systematized in the book “Measure What Matters.”
SMART goals and OKR are very similar tools, however, SMART goals are used more for personal development. Where instead OKR is a goal-setting system primarily thought for teams. So how to enable large organizations to achieve their goals at scale.
Therefore, while in terms of mindset SMART and OKR are similar. SMART goals usually are used more by solopreneurs, where OKR are used by startups and larger organizations.
SMART Goals vs. OKR vs. MBOs
Management by Objectives or MBO is a strategic management tool whose core principle is to define organizational objectives to align management with employees clearly. OKR is an evolution, as it breaks the silos and makes the shared objectives transparent to the whole company.
And those same objectives are aggressive and aspirational. SMART Goals can be used in the direction of OKRs but more at a personal level or at a smaller scale.
OKR and 10x thinking
OKR has been a system widely used in companies like Google to help scale up, while still aligning the company around so-called moonshots. Or small and larger bets that can make the company breakthrough in various verticals.
As OKR is by nature aggressive and aspirational, it fits well with the 10x thinking mindset.
Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.
Connected Productivity Frameworks
The Pomodoro Technique was created by Italian business consultant Francesco Cirillo in the late 1980s. The Pomodoro Technique is a time management system where work is performed in 25-minute intervals.Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.An action priority matrix is a productivity tool that helps businesses prioritize certain tasks and objectives over others. The matrix itself is represented by four quadrants on a typical cartesian graph. These quadrants are plotted against the effort required to complete a task (x-axis) and the impact (benefit) that each task brings once completed (y-axis). This matrix helps assess what projects need to be undertaken and the potential impact for each.The jobs-to-be-done (JTBD) framework defines, categorizes, captures, and organizes consumer needs. The jobs-to-be-done framework is based on the premise that consumers buy products and services to get jobs done. While products tend to come and go, the consumer need to get jobs done endures indefinitely. This theory was popularized by Tony Ulwick, who also detailed his book Jobs To Be Done: Theory to Practice.Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.The Eisenhower Matrix is a tool that helps businesses prioritize tasks based on their urgency and importance, named after Dwight D. Eisenhower, President of the United States from 1953 to 1961, the matrix helps businesses and individuals differentiate between the urgent and important to prevent urgent things (seemingly useful in the short-term) cannibalize important things (critical for long-term success).A decision matrix is a decision-making tool that evaluates and prioritizes a list of options. Decision matrices are useful when: A list of options must be trimmed to a single choice. A decision must be made based on several criteria. A list of criteria has been made manageable through the process of elimination.An action priority matrix is a productivity tool that helps businesses prioritize certain tasks and objectives over others. The matrix itself is represented by four quadrants on a typical cartesian graph. These quadrants are plotted against the effort required to complete a task (x-axis) and the impact (benefit) that each task brings once completed (y-axis). This matrix helps assess what projects need to be undertaken and the potential impact for each.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookies
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.
Published by