A few weeks ago I wrote about the difference between sales and marketing in the modern age. In that article, I promised to come back to the topic of goal-setting. Specifically, I lamented that far too many businesses today either fail to set goals at all, or they set goals that are patently unachievable or irrelevant to their business. This is true when we are talking about our online strategy or even the business as a whole.
What Are SMART Goals and Objectives
It’s far too common these days for business gurus and consultants to contrive too-clever catch-phrases and cobbled-together acronyms to make their “insights” sound intuitive and make them memorable. But every once in a while, one of those marketing-spin terms actually makes some sense. This is one of those times.
Back in 1981, George T. Doran wrote an influential article published in the November issue of AMA Management Review that described the basic premise. When it comes to goal-setting, you want to make your goals “SMART.”
S – Specific
M – Measurable
A – Assignable
R – Realistic
T – Time-related or Time-delineated
Specific Objectives
Saying things like “increase sales” or “improve conversions on our website” are not specific enough. But saying “add four more recurring customers” is. And so is saying “increase website sales conversions from 18% to 20%.” The point is to be as specific as possible about exactly what you want to achieve.
Measurable Objectives
We have so many tools at our disposal these days that there are not many things that we cannot measure or generate analytics on. This is even more true with it comes to the company website or other online aspects of our businesses. From websites to email campaigns to social media – stats and reports are available. But make sure that those tools are implemented and ready to go before you set any objectives and make sure that those reports are readily available to the people responsible for achieving them. Which brings us to ….
Assignable Objectives
The originating article for SMART Objectives uses the word “assignable.” I would prefer another “A” word – Accountable. But either way, the idea is pretty much the same. A specific person needs to be responsible for implementing a strategy that accomplishes the objective. The old adage is true – if everyone is responsible, then no one is responsible. Of course, you delegate tasks and communicate the objective(s) to the entire team. But managing the drive toward any goal has to be a defined part of someone’s job.
Realistic Objectives
It may be a part of your ten-year master plan to dominate your market-space. But ideas like that are long-term, strategic things. In today’s dynamic market, it’s not possible to assign specific people to act on things right now that can have a measurable impact on a long-term, strategic objective ten years from now. As we’ll see in a minute, defining the time-horizon is an important part of the SMART Objectives process. And setting the bar of achievement has to be realistic. You – and your team – need to have clear visibility to achieving the goals you set.
For example, there are exceptions, but if it took your company three years to reach that first million dollars in sales, doubling that number in six months is probably not realistic. And if you are comparing your online performance to an industry leader, setting a goal of matching that benchmark might be enough of a challenge – beating that benchmark may or may not even be possible.
Yes, many managers worry about setting goals too low. And to a point, I completely agree. Goals and objectives are designed to push us and our teams to higher levels of achievement. But those goals also need to be reasonably attainable. As much as meeting an objective is motivating, missing an objective is demotivating. Remember that all goals and objectives are not about dangling a carrot – they’re about rewarding progress. But that doesn’t mean that objectives can’t be cumulative. A series of realistic objectives adding upon each other over time is often better than a larger, strategic objective that can appear out of reach.
And let me briefly note that you can have too many goals and objectives at one time too. Ideally, each person would have one over-riding objective to focus on at a time. But that’s just not practical for most small business. But at the same time, if you or a member of your team has more than two or three SMART objectives, you run the risk of diluting focus and effort too much. So the number of objectives each person or team has to work on is a definite factor impacting “Realistic” goals.
Time–related Objectives
Finally, all goals and objectives need to be reasonably achievable within a set time-frame. If I’ve said it once I’ve said it a million times – deadlines are a good thing. And remember that human nature dictates that most people have trouble seeing out over the horizon. That means that objectives and goals should be set on a monthly or quarterly basis. My personal opinion is that goals should be set one or two quarters out at a time, and never more than a year.
Yes … when you are leading the company you need to think out farther than that. But leaders also need to remain flexible and responsive to the market. Crystalizing goals for half a year at a time not only makes them more real in the eyes of your team, but it also reminds you that you might have different priorities in six months. The market might change or a new competitor might emerge and change the way you think about your business.
Setting goals on a shorter-term will also mean that you avoid having to pull objectives out from under someone because changing business needs. I have been in that position and it’s not fun. I lead a team once and we were organizing and planning and implementing to accomplish a year-end objective. A few quarters in, the entire project got pulled. My entire team was demotivated. If you set shorter-term targets, things like that might still happen from time to time, but it will happen far less frequently.
When It Comes to Goals, You’re a Person Too
And by the way … if you are a lone entrepreneur or even leading small business with one or two part-time or contract staff, remember that you are a person too. We small business folks deal with an entire range of emotions every day just running our businesses. And we like to think that we “get” the big picture and that we are impervious to the ups and downs of daily life. But we’re not. We’re all just like everyone else. So setting SMART goals and objects for ourselves and our businesses is important even if we are the only ones doing the work. It is still surprising to me how achieving a small task of goal that I set for myself is emotionally and psychologically rewarding.
We all need that kind of thing.
Setting SMART Objectives Can Be Harder Than It Seems
Like all great insights, looking at it now makes the premise seem obvious and simple. But although expressed simply, actually doing the work of setting SMART objectives can be challenging. That’s because each aspect of a SMART objective is influenced by the others. You can be very specific about what you want to achieve and how long you want it to take, but the time allotted may not be sufficient or you might find that the objective itself is not realistic. There is a push-pull dynamic between each of the five aspects of SMART Objectives that provides a crucial balance.
SMART Objectives Might Be the Most Important Task of Leadership
If you are a sole entrepreneur, a corporate CEO, or even the leader of a team within a larger organization, there is perhaps no more important task than setting SMART Objectives, communicating them effectively to your team, and then holding them – and you – reasonably accountable for the results.
If you need help setting objectives or putting the kinds of measurement and analytics tools in place that can help you deliver results to your company, just let us know. We’ll walk through it all with you to help you get the kinds of results you need for you and your business.
Thanks for reading.