The SMARTest Tips to Setting Attainable Business Goals

Your vision is to set goals for the business and they are achieved.

Sounds simple enough but like most things, there are a lot of components to think about when attempting a feat such as setting business goals. The purpose of this article is to provide suggestions as to why you have to take the time to set business goals, using the SMART method, types of goals, and areas to consider in setting well-rounded goals.

Why business goals are something you have to have

Wouldn’t it be nice if everyone were able to understand the company vision and come up with projects that all fit together nicely and make perfect sense? They would all be timed perfectly and no shortage of resources. Well, that is not the case, so what are you going to do? You have to set goals and roadmaps so that employees know where they are going.

Outside of the path you are paving, there are other benefits to setting goals for the business. You can encourage collaboration, improve employee happiness, increase market share, motivate the teams to be better, and reduce cost. All things that are necessary to stay in business.

SMART is the way to go in goal setting

This is the best way I’ve found proven to work over and over in setting goals, no matter what the purpose of the goal is. It works for personal and professional, and whether you are working with employees for personal goals or setting department goals. The idea with this is to set a complete goal that is achievable and measurable. You would use this to ensure you aren’t making goals too generic, too easy, too hard, goals without a timeline, and so on as those would likely be useless and not improve the person or business. The idea is once a goal is set, it’s clear and actionable. Let’s go through what SMART means.

S for Specific

Specific means your goal is narrowed to a topic or area that is detailed enough to know exactly what it means rather than a blanket type statement. Whenever you can use numbers, that is ideal so it’s very clear what is expected.

M for Measurable

Measurable means at some point in time, you will be able to run a report or look at results and say yes, this is on track or no, you did not hit the number for example.

A for Achievable

Achievable means it’s possible to be done by the person or department stating the goal. You want to avoid setting goals that require tools or people that are out of reach or setting a goal for someone who doesn’t have the experience or education to actually complete it. You also want to avoid setting goals for gaining 10,000 customers when your customer base is currently 1,000 for example. That type of increase is completely unachievable in most cases and then you may end up dragging down morale because they know that no matter what they do, it’s not going to happen. Then you may have employees thinking you want to push them out or they will be replaced, or who knows what. Bite-size goals tend to build people up because they feel accomplishment through achievement.

R for Relevant

Relevant means it makes sense for what’s going on right now in the business and would be a useful contribution. If your company is focused on a new handbag launch to completely save the business, relevant goals would be selling that new handbag versus something like last year's shoes already written off and headed to the discount outlet. Unless of course, you were trying to get those shoes sold off, but generally, goals should align with the company strategy.

T for Time-Bound

Time-bound means you’ve set a limit on when this is to occur. You will often see monthly, quarterly, or annually used in goals. Without it, things will drag out and likely never be completed. Not to mention, you can never go to an employee and say you aren’t performing as expected because you never told them when you expected goals would be reached.

Employee goals example with SMART and not so SMART

Example 1: I am going to increase sales!

Vs.

Example 2 SMART: I am going to increase sales of handbags in the U.S. by 10% by June this year.

It sounds great to say sales will be increased but what would happen with example 1 is the end of the year would roll around and how do you hold someone accountable for sales not being where you wanted it to be? How was that employee to know you expected 10%? They thought 2% would be good enough. Using the SMART framework, you now set the expectation, a due date, and you can measure it.

Example 3: I am going to get new customers this year through social promotion!

Vs.

Example 4 SMART: I am going to get 50 new customers by the end of this year through social promotion on YouTube and Facebook.

Example 3 is better than example 1, however, it’s still missing key pieces. Example 3 didn’t specify the number so it’s not measurable and it didn’t specify the social channels or a solid due date. If these things aren’t specified, it can leave it too open and again, how is the employee to know you wanted 50 customers from these social channels in particular? Sometimes you will want to leave things open so that the employee can choose the social channels for example. In our example though, let’s say you put a large ad spend on these channels and therefore, that is what makes them relevant for this year over others. The SMART format will help alleviate frustration and issues down the road.

Types of business goals

Now that we’ve gone over the framework to think of when designing goals, what are the basic types of goals? It’s good to consider all of these types in your goal plan so that you aren’t missing anything. Sometimes you need process improvement rather than just performance, and sometimes goals need to be longer term with smaller ones set first.

Time-based: Short-term or long-term goals. An example is short-term, we need to produce more marketing content, and long term, we want to build our social media following. You have to achieve the short-term goals first most of the time to feed into the big picture of longer-term.

Performance-based: These would be goals where you’re measuring an employee’s results or results of taking an action. An example would be Jane increased sales this year by 10% through cold calling.

Quantitative: This would be more numbers-driven such as we launched a new style of handbag and we had 20% more sales.

Qualitative: This is subjective at times, for example, customers responded better to this latest signage in the store. This is tough to measure without a survey of some sort, but you get feedback from customers in the store and sometimes that’s enough to know mission accomplished.

Outcome: This is a result such as starting a Twitter account for the business.

Process-based: These would be goals geared towards changing behavior or how things are done. For example, we are going to ensure we are meeting monthly to go over production-related issues.

Top areas to consider to have a well-rounded set of business goals

Employees

• Set goals for employee growth through supporting continuing education.
• Set a goal of surveying and taking action on employee wellbeing.
• Set cross-functional goals so that your team has a goal to work collaboratively.

Productivity

• Set goals related to accomplishing more projects by using project management .software
• Set goals to launch 3 new products this year.
• Set goals to find new technology to use to reduce repetitive tasks and cut down on labor costs.

Marketing

• Set goals to get people aware of your brand and therefore increase market share.
• Set a goal of a complete competitor analysis this year.
• Set goals to increase traffic to stores or your website.

Sourcing

• Set a goal to work with vendors on cost reduction through volume or other ways.

Security and Risk

• Set goals to reduce business risk through vetting and attaining secondary vendors.
• Set goals to implement additional cybersecurity measures.

Sales

• This one is most common but set a goal to attain X number of customers or sales each quarter and the path to get there.
• Focus further on goals for increasing profit through various cost reductions.

Quality

• Set goals to increase quality in all areas of the business from product to customer experience.

Look back at your mission statement and values

• Think about what goals you could set that pertain to these areas to further build upon adoption of those.
• Set goals to improve community involvement through the donation of products or services.

In summary, setting goals for the business is necessary to have everyone working on the same path. In order to do this, and keep people accountable, you need to use a format like SMART so that there are no surprises at review time. In addition to SMART, those goals need to be well-rounded so you aren’t neglecting any area of the business. You can do that by thinking about the types of goals you are setting and the various areas to look at.

Written by Nicole Hullihen January 29th, 2022