My close colleague, Gene Siciliano (our “CFO for rent” at www.cfoforrent.com) is an excellent strategist, consultant and speaker. His website is filled with resources and articles, and you can sign up for his newsletter. I wanted to share this article with you about his strategies for business goal setting.
Business goal setting is a funny thing. Funny odd, not funny ha-ha.
We talk about setting goals that are really important to meet, and then we set them so loosely that no one can tell if we hit them or not. Or we adjust them at the drop of a hat, if we remember them at all. Or we check in around the time a goal was to be accomplished only to find out it’s been behind schedule for months; and money has been spent elsewhere on the expectation of on-time achievement that we would have known wasn’t going to happen if we’d only looked. Or worse yet, we’re aware of all these things as they’re happening, but we don’t know what to do about it so we just ignore it until someone says we should be planning. Then we claim that business planning doesn’t really work, and we don’t have time for such foolishness.
Does any of that sound familiar to you? I heard variations of it for years during my stint in corporate America. Want in on a little secret? It isn’t that planning doesn’t work. It’s that bad planning doesn’t work.
Enter SMART Goals. Ask yourself these 5 questions about each goal you set, to see if you’re giving yourself – and your team – the best chances for success:
1. Specific? Is there an exact, measurable end result? It’s truly specific if your teenage kids can tell if it’s been met or not. Is it due on a particular date or within an exact timeframe? Is it calculated with enough clarity and precision that it’s obvious that you either got there or you didn’t? “Ninety-five percent of employees with completed performance evaluations by June 30” – now that’s specific. “Improving our product return rates” – well, that’s just pie in the sky, and any change at all would qualify, even if that was not what you had in mind. People like the boss to be clear about what is expected of them, although they may wiggle in their chairs when you ask them if they can do it. Your job is to get their commitment and then give them the tools and support to be able to achieve exactly what you want, or more.
2. Measurable? Can you really tell if you’ve hit the mark? If your goal is capturing a 5% market share in a market where no one knows who has what market share, aren’t you kidding yourself? Even the most obvious and desirable goals are meaningless if you can’t measure them against the benchmark they are meant to achieve. This is a particularly acute challenge for privately owned companies who compete with other privately owned companies for whom competitive intelligence is scarce or nonexistent. If you can’t calibrate against the most relevant goal, then find metrics that directly impact it, and that you can measure, and benchmark your goals against those.
3. Achievable? Is it a stretch to get there, without being unreasonably ambitious? If it’s so far out that employees and others decide ahead of time that it can’t be achieved, they will stop trying. Don’t be fooled by those motivational speakers who tell you to shoot for the moon and hope you hit the top of a mountain. A goal that no one believes in is a waste of time because everyone has a built-in excuse for not reaching it. For those on your team who need no motivation to excel, anything will do, but for most workers, most of whom need encouragement and leadership, your moon shot simply says you don’t really know what is reasonable.
4. Relevant? Does it truly relate to the strategy of the company, and is it truly intended to move you closer to your vision for the company? If not, it’s off target and should be revised or dropped. We’ve all seen the dreamer who has an idea a minute, most of which would be wild goose chases if we followed them. Goals that are focused on your business strategy will get you further than those larks that could make a million if only they would work. Focus, focus, focus – that’s the name of the game.
5. Trackable? Can you break it into smaller action steps or milestones that can be accomplished and managed along the way? If not, you have no way of knowing if you are on schedule or not, until it’s too late to do anything about it. An annual sales goal can be tracked every month. An expansion plan of 10 more offices can be followed office by office. If you’re on track you can encourage staff to keep up the good work. If you’re not, you can take action to keep the goal from being lost completely. Because it’s trackable.
If all your goals are SMART Goals you have taken the first big step to achieving them – you’ve made them manageable. All that’s left is checking the plan regularly, and actually using the tool you’ve created. Wow! What a concept!