SMART goals translate strategy into tangible targets

Goal setting drives organisational performance. According to the set criteria, SMART goals must be Specific, Measurable, Achievable, Relevant and Time-bound. The simple framework ensures objectives are meaningful.

Be the Business spoke to three entrepreneurs about creating goals, embedding the technique and tying personal and team goals to the company’s mission.

How to use the SMART goals framework

Goals provide focus, and having targets is highly motivational. But business leaders need to make sure they are actionable.

Matt Turner, MD of Clownfish Events, has effectively been using SMART goals across the business for the past seven years, but it didn’t start out that way.

“I was setting goals based on dreams and hopes. They often weren’t relevant or were too vague and couldn’t be measured.

“I announced we wanted to buy a warehouse rather than rent one at my first AGM. It was a good goal to have but we were only 12 months into the business and it was totally unrealistic,” he said.

SMART goal setting is attributed to Peter Drucker’s Management By Objectives (MBO) framework, which was first shared in his 1954 book The Practice of Management.

The goal must be Specific. This provides focus and context, helping team members understand how their actions can bring about change. Sift CEO Tom Dunkerly described the Specific part of goal setting as an “art in its own right”.

“It sounds simple, but is the goal absolutely laser-focused on making a contribution back to the rest of the business? Can someone look at that objective and know they understand it?” he said.

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The importance of making your goal Measurable

The Measurable goal makes sure it’s quantified. The famous quote “you can’t manage what you can’t measure,” is sometimes attributed to Drucker.

Achievable means what it says on the tin – but needs to be balanced with ambition. Working towards something that’s difficult is a key part of having satisfaction at work. But failing to achieve what’s expected is demoralising.

Accountancy practice The Wow Company has used SMART goals since its launch in 2004. Paul Bulpitt co-founded the 35-person company. He stresses the need for goals to be achievable, particularly for individuals.

“The goals have to feel achievable. I’d much rather people can do it and set another goal rather than ultimately feel they can’t do it. I’m trying to create a winning mentality. Being on a winning mentality is much better than going out to get slaughtered,” he said.

Making it Relevant ensures it has an impact on the business.

Finally, Time-bound means setting deadlines when it will be reviewed. Staff member goals should be set and reviewed on a regular basis, likely in one-to-one meetings.

Embedding the goal setting processes

Regular reviews are crucial to keep the process of setting goals on track. One option is to set company goals annually, and personal and team goals quarterly, with progress reviews on a month-by-month basis.

Clownfish’s Turner employs the SMART goal methodology with a variety of time frames. Quarterly goals could include client wins or hiring targets. He sets himself SMART goals such as reviewing client case studies day-to-day. The management team has annual reviews where they set personal development goals.

“We have weekly team catch up meetings and the SMART framework is always applied. Anyone who says they are going to do something during the meeting has to justify it. That supports faster and better decision making. It makes people more accountable and motivated,” said Turner.

Bulpitt said a clear company vision makes it easier for staff to align their goals to company objectives.

“Part of what I’m talking about is a decentralised approach. People are empowered to set their own goals and that means there’s a much better chance of it happening and people are much more engaged. This is the purpose of this business, this is the vision, figure out what you need to do,” he said.

Setting too many company-wide goals may reduce focus and make communication difficult. Bulpitt said having one would be the best approach, but added that it would be really tough. He recommends having a company-wide Big Hairy Audacious Goal to help galvanise the team.

“Something that makes you feel a bit sick in your tummy. As a team, it’s nice to have one of those goals that challenges you a bit more,” he added, qualifying it doesn’t mean it’s not achievable.

We talked about this type of goal in our article Setting long-term landing zones helps drive business growth.

Cascading SMART goals through an organisation

Setting goals at different organisational levels ensures the whole business is pulling in the same direction. It’s common for staff members to have SMART goals that feed into team goals, which move the business towards its overall goals. The links improve transparency.

“Does it trace back to the wider company goals?” asked Sift’s Dunkerly. “One way of affirming that is getting people to play it back and explain why it contributes to both personal development and the performance of the business.”

One of The Wow Company’s SMART goals is to ensure every customer knows all the services they offer by the end of 2018.

“Our lead advisors sit down with individual teams and ask: what do we need to do? What’s going to make the difference? Then they go away and set their own goals to achieve that,” explains Bulpitt.

Sub goals are set once the management team has decided on the overall direction of the business.

Making sure clients know what services they offer is a company-wide goal. The marketing team are preparing a handbook detailing the services that can be given to employees and clients. The directors are re-engineering the onboarding process.

Sift has 67 employees and implemented SMART goals about five years ago. The management team starts the planning process, picking objectives that support the company’s three-year strategy. These are SMART goals that teams and individuals can align their goals to.

“The most important thing is clarity,” explained Dunkerly. “People need to understand why they’re here and what they’re doing and why it makes an impact. If they can see that the work they’re doing makes a positive impact on the business, that’s a very positive thing.”

It’s important that the management teams get it right. Dunkerly said mistakes normally occur at this level and getting goals wrong is immediately disengaging.

“There’s a lot of onus on the management team to set the right metrics. It’s got to be something that they have a tangible impact on. How does that translate into real work and is that the right message to be gunning after?” he added.

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