Setting SMART Goals

Part 2 of a 3 part series on improving key business priorities through creative performance management

Part 1 of this series was about the process of getting people connected and committed to the performance process. It explained that having agreed goals and having the resources necessary to deliver them is the foundation of employee engagement. This second part of the series is about how to set those goals.

The process of setting goals or objectives is all about focusing everybody in the business on the most important priorities. The idea is that if everyone understands what these are, they can set personal or team goals that will help achieve them. If everyone’s energy is focused on improving the priority areas of the business the impact will be far greater than if there is no clear focus and the energy is dispersed.

The goals clearly describe what people want to achieve, and how they will measure their results. How people achieve their goals is determined by the systems and processes they follow and their discipline in sticking to them. Experience tells us that if the goals are clear, then achieving them is all about the systems and processes used to do the work. The benefit of getting these right is that the results follow automatically and the learning and personal growth that is gained as a result is permanent. In his excellent book “Atomic Habits” James Clear quotes Scott Adams, the cartoonist behind the Dilbert comic strip on the difference between goals and the systems used to deliver them:

“The purpose of setting goals is to win the game. The purpose of building systems is to keep playing the game”

How to build these systems and processes that deliver results will be the subject of the third part of this “Setting Objectives Properly” series. Part 3 will also include a roadmap which pulls together all the elements of setting and delivering objectives that we have covered which can be used as a guide when building your own performance development programme.

Let’s start with setting the goals.

SMART Goals

The SMART in SMART goals is an acronym for a goal setting framework that allows goals to be checked and tested for completeness and achievability.

• Specific (the desired outcome is clearly understood)
• Measurable (a quantifiable basis for judging achievement)
• Achievable (realistic, able to be achieved with the resources available)
• Relevant (the benefit to the key business priorities can be defined)
• Time-Bound (it has a target completion date or deadline)

Benefits of SMART Goals

1. They provide a clear focus on the most important goals to be delivered
2. The owner of the goals must think through the steps and the resources required to achieve them.  This provides a reality check on whether the goal is achievable,  whether it needs to be broken into smaller chunks or whether additional resources are required
3. They provide an achievement target and a motivation to succeed
4. They provide accountability, satisfaction and a basis for reward and recognition

Setting SMART Goals

Let's work through an example to illustrate the process.  James is one of four analysts in the marketing department at Techwiz Company, a medium sized distributor of computer hardware based in Auckland, New Zealand.  He reports to the marketing manager, Melissa.  James’ role is to provide analytical data that enables strategic decisions to be made by Melissa and her marketing team.

Melissa has just had her first goal setting meeting with James, in which she explained the key business priorities and discussed with him where she sees he may be able develop goals that will help deliver them. Melissa’s list was as follows:

1. Key Business Priorities

The key business priorities of Techwiz Company for the coming year are:

• • Increase revenue by growing our share of the laptop market in NZ and Australia
  • Improve our cost and time to market by investing in three new distribution centres in New Zealand and Australia
  • Reduce costs throughout the business by improving productivity and investment in support technology

2. Melissa’s Opportunities list for James

Melissa has developed an opportunities list for each of her analysts.  She has divided the opportunities between them to suit their skills and experience. Her list for James is as follows:

Growing the laptop market share

• • Researching the size of the NZ laptop market and estimating the share of each of our major competitors
  • Analysing sales over the last five years to identify opportunities to gain new clients and opportunities to increase share with existing clients

3. James’ Draft Objectives

James is now using the SMART goals methodology to develop his goals. He asks the following questions under each of the headings:

S: Specific

• • What needs to be accomplished?
  • Why is this goal important?
  • Who is responsible for it?
  • What are the steps that need to be taken to achieve it?
  • Who needs to be involved?
  • How long will it take?
  • What resources or limits are involved?

Answering these questions and discussing them with others who have knowledge in this area helps James clarify what he is trying to achieve. His draft specific goal is:

SPECIFIC

Estimate the annual sales of laptops in the New Zealand and Australian markets for each of the top six distributors

M: Measurable

Making  goals measurable enables progress to be tracked and knowing when the target has been reached. James asks these questions to decide how he will measure his goal:

• • What data will I use to measure delivery of the goal?
  • What are the measures of performance I will include in my target that will tell me if I have been successful?
  • In addition to numbers are there other softer measures that are helpful, such as attitudes, commitment or morale?
  • Are there important sub-targets which are important if the final target is to be achieved?
  • What numbers will change, what is the target?

James decides he needs a measure to be able to tell whether he has accounted for the total market sales.

MEASURABLE

Estimate the annual sales of laptops in the New Zealand and Australian markets for each of the top six distributors and reconcile against the total import data available from Statistics NZ and industry stock levels. Total Market estimate should be within 5% of import and stock numbers.

A: Achievable

This is the reality check part of the SMART goal process. James asks himself if his objective is realistically achievable:

• • How can I accomplish this goal? What are the steps involved in achieving it?
  • Do I have the knowledge and skills available?
  • Can it be achieved within the required time and budget given all the other things I have to do? 
  • Does it need to be broken down into smaller, more manageable chunks? Goals that take longer than 90 days are best broken down to smaller sub-goals so a clear focus on delivery steps is maintained
  • What difficulties or problems can I foresee?
  • Do I have the necessary resources required?

James believes this goal will take him three months to complete and he can do it on his own. Because it will not take longer than 90 days he can remain focused on it until completion and does not need to break it down into smaller sub-goals.  He has mapped out the main steps and will be able to explain these to Melissa.  At this stage he cannot foresee any major problems or road blocks.  He is confident he can do it but with his day to day analytical work he will not be able to take on any further goals. He will discuss this with Melissa when they meet to agree his goals.

ACHIEVABLE

Estimate the annual sales of laptops in the New Zealand and Australian markets for each of the top six distributors and reconcile against the total import data available from Statistics NZ and industry stock levels. Total Market estimate should be within 5% of import and stock numbers. Achieve this goal with current resources in three months from commencement.

When assessing the achievability of goals it is very important to think about how much control you have over the delivery. If the goal depends on input from other individuals or teams you need to discuss your goal with them and be sure they are able to provide their inputs to you. If not, you need to re-assess whether this goal can be delivered another way or whether it is achievable at all. James has done this and does not see any problems.

R: Relevant

This step is about ensuring the goal is important to you and that it will contribute to the key business priorities. It is also important that it aligns with other relevant goals in the business and is part of everyone moving together on the same key priority areas.

James asks the following questions to check the relevance of his goal:

• • Does this goal contribute to the key business priorities?
  • Does it align with the goals others are trying to achieve?
  • Will it help others to achieve their goals?
  • Is this the right time to be doing this?

A good way to determine if the goal is relevant is to define the key benefit to the organization that it will deliver:

RELEVANT

Estimate the annual sales of laptops in the New Zealand and Australian markets for each of the top six distributors and reconcile against the total import data available from Statistics NZ and industry stock levels. Total Market estimate should be within 5% of import and stock numbers. Achieve this goal with current resources in three months from commencement. It will provide input to the sales and marketing team goals to increase revenue by growing market share by providing data on which to base their goals.

T: Time-bound

Goals should have a deadline for three reasons:

• • So you can plan your work to meet the target and every day work does not take over
  • On-time completion is an important measure of success
  • It is a further check on whether the goal is achievable

You, and others contributing to the goal, need to plan when the work is done so the goal can be reached by the deadline.  James decides that his assessment of three months to complete is realistic and adds his completion data to his goal:

TIME-BOUND

Estimate the annual sales of laptops in the New Zealand and Australian markets for each of the top six distributors and reconcile against the total import data available from Statistics NZ and industry stock levels. Total Market estimate should be within 5% of import and stock numbers.

Achieve this goal with current resources in three months from commencement. It will provide input to the sales and marketing team goals to increase revenue by growing market share by providing data on which to base their goals.

The goal will start on 1 April and be completed by 30 June 2024.

The reporting and support process agreed with the manager is critical

James will now discuss his draft goal with Melissa and they will refine and agree it. Most importantly, they will agree a timetable and process that they will both agree to follow to discuss progress, provide coaching, support delivery and remove road blocks. This will have dates and agreed actions. This can include face to face and online meetings and will be recorded in the performance conversation system within Mariner7.

Estimate the annual sales of laptops in the New Zealand and Australian markets for each of the top six distributors and reconcile against the total import data available from Statistics NZ and industry stock levels. Total Market estimate should be within 5% of import and stock numbers.

Achieve this goal with current resources in three months from commencement. It will provide input to the sales and marketing team goals to increase revenue by growing market share by providing data on which to base their goals. The goal will start on 1 April and be completed by 30 June 2024.

The goal will start on 1 April and be completed by 30 June 2024.

Melissa and James will discuss progress whenever either require as a performance conversation in Mariner7 and will formerly review progress on 30^th of each month until completion.

 Overall business success requires people at every level to have goals that contribute towards the key business priorities

The example we have used is of a relatively complex but achievable goal for a mid level person. Having goals for every role and level is the key to improving performance. Everyone moving forward together on improving the key priorities is the key.

Personal development goals

When using the SMART framework to develop your goals you may discover you need to develop additional skills or knowledge yourself to in order to achieve them.  You then need to set some separate personal development goals, asking yourself questions like:

• What do I need?
• How will I get what is needed?
• What will it cost?
• What are the benefits to me and the company for this year and the longer term?

These also need to be included in your discussion with your manager.

To chat about this article or try Mariner7 for free, contact 

Brian.shaw@mariner7.com

Phone 64 21 406 408