When you really think about it, setting a goal is just stating a desire to be in a better position than the one you’re in now. To be bigger. To have more customers. To be more profitable. However, the way you define and word your goals can drastically alter their meaning, and even change how useful they are.
Setting effective goals is about more than just describing your general aspirations. After all, there’s not much to separate a vaguely written goal from a wish. You need to write goals that can be scrutinized, refined, communicated – and most importantly – put into action.
By far, the most widely-used method for writing effective goals is the SMART Goals framework (even though it’s sometimes misunderstood). In this article, we’ll cover everything you need to know to develop your own SMART Goals, as well as some of the common pitfalls you must avoid. We’ll also take you through some real SMART Goals examples, taken from the world of business.
SMART Goals is a method coined by George T. Doran in 1981. He proposed goals should be SMART, an acronym that stands for Specific, Measurable, Assignable, Realistic and Time-related.
As acronyms go it’s arguably not that effective. Why? Because clearly not everyone could remember what each of the five letters stood for! You can see this from a quick Google search, which shows many variations on the same SMART acronym, using a combination of different words.
These include: Simple, Sensible, Significant, Meaningful, Motivating, Achievable, Agreed, Attainable, Relevant, Reasonable, Resourced, Results-based, Testable, Time-bound and Time-limited.
We’ll explain how to deal with these variations later in the article, as well as some other interesting evolutions of the acronym including SMARTER and SMART ASSES.
But for now, we’ll stick with the 1981 original – SMART.
Normally, when we set goals and objectives, we start with a strong idea of what it is we’re trying to do, which has been loosely defined.
- Grow the business
- Improve customer satisfaction
- Launch a new product
Although they do give a general sense of direction, goals written like this are hard to quantify, open to interpretation, and are therefore difficult to put into action. Instead we should aim to make goals Specific, Measurable, Assignable, Realistic and Time-related.. This ensures we leave no doubt about exactly what it is we’re trying to achieve.
Here are the goals again, rewritten as SMART Goals:
- The new Sales team will increase revenue by 20% before the end of the financial year.
- Our CS team will maintain an average CSAT of 95% or above by Q2.
- Mike will design a new online course that is available to purchase by the end of June.
Notice these goals are more definitive. The test of a good SMART Goal is that it should be abundantly clear if you have achieved it or not.
It’s a common misconception that all goals should fulfill all five criteria of SMART. This will not always be possible or practical, particularly for goals that support wider objectives. Even the SMART Goals creator, George Doran, argued his method shouldn’t cause us to miss the benefit of more abstract goals.
You should use the SMART framework to strengthen and develop your goals, but don’t worry if SMART can’t be applied to every goal. You can always compensate for any weaknesses in your goal when you’re creating your action plan.
Most of the time, non-specific goals are the cause of confusion and inertia.
Take ‘grow the business’, for example.
We all know what the word ‘grow’ means, but in business, growth can actually be a vague term. Growth might mean an increase in revenue, profits, market share, orders, customers, investment, share price or something else.
Many of these metrics are independent of each other. That means it’s technically possible to increase customers without increasing revenue; increase revenue without increasing profit; or increase profit without increasing market share.
Furthermore, the same metric can often be defined in slightly different ways, this is especially the case when using different online tools and data sources. ‘Monthly Revenue’, as presented by your Finance Director, will likely be calculated differently to the ‘Monthly Revenue’ on your Shopify reports.
The point is, you should try to write your goals so they are not open to interpretation or debate. Use footnotes and additional definitions if necessary. And if you were not already clear, in your own mind, on what the focus of your goal should be – now is the time to pin it down. Because these subtle differences can have a profound impact on the tactics your team members use to achieve your goals.
Note there is a difference between being specific and being prescriptive.
Goals should be specific about the outcome you want. They should not be prescriptive about how to achieve it, unless it’s absolutely necessary. Otherwise your goal very quickly starts to become a plan, and this can stifle creative solutions.
If you can’t write your goal without being overly prescriptive, you should review whether or not it’s the right goal, or whether or not you are setting it at the right level. You might even consider splitting it up into a longer-term strategic goal, and shorter-term tactical goals.
- Non–specific: Increase customer satisfaction
- Specific: Increase our post-call CSAT score to 95%
- Prescriptive: Increase our post-call CSAT score to 95% by reducing the number of follow-up questions asked during each call.
Measurable goals help us to quantify what success actually looks like, so we can better plan how we’re going to get there. It should go without saying, but the metrics you set aren’t wishes, they should be rooted in evidence, experience or just plain common sense (see Realistic).
Being measurable also gives you an opportunity to evaluate whether your goal is even worth pursuing in the first place. Imagine Tim, who is working on an outreach campaign that will cost $10k; it’s only when Tim calculates realistic success metrics he realizes the best case scenario for this campaign is $2k in new revenue. Writing measurable goals helps you to unearth these dead-ends before you start working on them, not after.
Ideally, when setting goals, you should measure performance or results, and not activity. Measuring performance, using Key Performance Indicators (KPIs), helps us understand our impact, which is the thing we care about most. Another way of saying this is: “measure in the output, not the input”.
So, instead of writing a goal that measures activity (the input):
- Create and publish 30 LinkedIn posts this month
You should think about the impact you are trying to create, and write a goal that includes a measure of the results (the output) instead:
- Achieve 100,000 impressions on LinkedIn this month
- Produce 50 new MQLs through LinkedIn this month
- Grow our LinkedIn following to 25,000 this month
However, you should be careful about setting targets, which are several steps removed from your activity. It would not be helpful if this same Social Media Manager wrote a goal saying her LinkedIn posts should result in an increase in total company revenue, or overall customer satisfaction.
That’s because 1) these secondary results are largely out of her control, even if she is partially contributing to them 2) these results are affected by too many other factors to be used as a good measure of performance for the activity she is measuring, and 3) these results take so long to materialize that they cannot realistically be used to create a useful feedback loop.
Sometimes it’s genuinely not possible to measure the performance of a goal with a KPI. Either because the result is too abstract or because the metrics you need aren’t available. In these cases, you might explore proxy metrics – these are related metrics, which you would expect to track closely to the metric you care about. Beware, bad proxies create their own issues.
Otherwise, it is fine to have results-based goals that don’t use KPIs. You just need to ensure you are reviewing quality and judging effectiveness in other ways.
In other words: who will be responsible for achieving this goal? Accountability for a goal can be held by one person, or a group of people (providing all members of the group acknowledge and understand they are collectively accountable). Sometimes, a goal is split into multiple goals, assigned to different people at different strategic levels. This is known as a cascading goal.
Of all the concepts in SMART, Assignable is probably the word most replaced in favor of alternatives (‘Achievable’, for example). Perhaps this is because it’s slightly reminiscent of an old-fashioned style of management, where goals are dictated by managers, in a top-down manner.
More recent thinking suggests goal setting works best when it’s led by the person responsible for achieving the goal. This creates more ownership, and encourages intrinsic motivation.
Nevertheless, there are a number of benefits to a goal being assignable, or at least ‘owned’.
- In instances where two different teams are working towards the same goal. Deciding where accountability lies prevents the ‘silo problem’ where teams might pull in different directions.
- It helps you to appraise whether or not the goal is fair, and can realistically be owned by that person. For example, it wouldn’t be fair to let a junior member of the team set a goal that requires them to influence areas outside their control.
- In instances where a team decides on a goal, but nobody takes ownership. Unassigned goals are not very likely to be progressed, and may as well be on a wishlist
In general, setting unrealistic goals is demotivating.
People who come to work each day, knowing they are never going to achieve their targets, eventually start to ignore them. It becomes as if you had never set the goal in the first place. Realistic goals, on the other hand, are far more likely to become part of everyday thinking and team culture.
Realistic goals also help others approach their longer term planning decisions with confidence. “We feel like we can invest in this new hire now, because Laura is confident her team will hit next quarter’s revenue targets”.
Furthermore, a realistic appraisal of your goals allows you to make better strategic decisions, at a time when those decisions can still make an impact. This might include allocating extra resources, developing new skills or deprioritising other tasks.
And yet, there are still many businesses who recommend Stretch
Goals, Moonshots, and Big Hairy Audacious Goals, making the argument that big (even slightly unrealistic) goals can be inspiring.
There are good reasons for this. In part, they are guarding against two common pitfalls of goal-setting – learned helplessness and sandbagging:
- Learned helplessness is when you incorrectly assume something is out of your control, based on previous experiences, even if the conditions have changed. For example, if a small team grows into a big team, but continues to hold a ‘small team mindset’.
- Sandbagging is when people lower the bar to set targets they know they’ll easily hit. This results in unrealised potential, and is particularly dangerous when applied to high-level or long term goals, because it can sap momentum.
How high you aim will likely depend on your team culture and outlook. But even BHAGs and stretch goals should be there to do just that – stretch. Not be the stuff of fantasy. Ask yourself, where, as a manager, do you see the bigger risk – lowballing your ambitions, or damaging morale from failing to achieve your goals?
One way to create more realistic goals is to use internal or external benchmarks.
For internal benchmarking, look at your previous attempts to achieve a similar goal. How did you do? Taking everything into consideration, what would be a realistic goal for next time?
For external benchmarking, you can compare yourself to industry standards. Customer Satisfaction and Net Promoter Scores are examples of metrics with well-documented industry averages. Be careful, however. Context is key. There will be many instances where an external benchmark will not be appropriate for your company, or even your industry.
You should only use external benchmarks if the source is transparent about the sample of companies used, and how the metrics are calculated (some reports use different calculations). There are also some metrics for which benchmarking is never appropriate, because it’s too affected by other factors. A website's conversion rate would be an example.
Is being time-related just the same as saying your goal should have a deadline?
As well as helping to set expectations and assess realisticness, time-related goals are obviously important if your goals have dependencies – other people who are planning their own goals, based on how quickly you can achieve yours.
Beyond these practicalities, deadlines can also be important for motivation (particularly if the stakes are high) as well as creating a natural point in time to reflect on your success and failures, and review your approach for the future.
Over the years, many have proposed alternative versions of SMART, using different words. (Perhaps they thought the acronym could be improved, or maybe they just misremembered it!)
One of the most common alternatives today is Specific, Measurable, Achievable, Relevant and Time-based. Achievable is just a synonym for Realistic, so the major difference between this version of SMART and the original is that Assignable has been replaced by Relevant.
Questioning if a goal is Relevant is certainly worthwhile – particularly as most goals are designed to support some wider purpose or mission. And as we discussed, Assignable is sometimes associated with micromanagement, so it’s understandable why this has been replaced.
You will also sometimes see SMARTER being used, or you may have even seen Geckoboard’s contribution: SMART ASSES. Here, it’s just the same concept, but covering important areas that the original SMART misses.
Remember the SMART Goals framework isn’t some precise, scientific concept. (In fact, it first emerged as a short article in Management Review.) We use it because it helps us think critically about our goals, and how they can be improved. If you want to make your goals Simple, Motivating, Agreed-upon, Relevant, Testable, or any other adjective you can think of, that’s fine. It’s all about making your goals stronger.
Just be careful not to use a SMART acronym that contains synonyms: like Achievable and Realistic, or Testable and Measurable. You will confuse your team members, tying them in knots, because they will assume the different words mean different things.
OKRs (Objectives and Key Results) is a popular goal-setting methodology within the tech and startup world. The basic premise involves writing a single, ambitious Objective, which is supported by 3-5 Key Results.
When we take each aspect of the SMART Goals framework, we can see it is entirely compatible with OKRs
- Specific: OKRs are designed to take big ambitious Objectives and pin down exactly what we mean by them, in the form of Key Results.
- Measurable: Each Key Result should be measurable (usually on a scale of 1-10)
- Assignable: OKRs are created and owned by people at every level of the organization.
- Realistic: Because OKRs are designed to be aspirational, they are definitely on the more ‘ambitious' end of the spectrum. (It’s often said that if you always achieve all of your Key Results, then you are not setting them correctly.) However, with OKRs, it's a very conscious decision to be ambitious. This means it doesn’t create unfair or unrealistic expectations.
- Time-related: OKRs are designed to cover a short time frame – they are often set quarterly, not annually.
Here are some real examples of SMART Goals, mainly taken from the world of business. In each example, you can see how the writer has thought carefully about the wording of each goal, to produce clear definitive goals that are not up for interpretation or debate.
But even seemingly well-written goals like these are only SMART when used in the right way.
Many of the metrics used, such as MAU or Revenue, are only specific if they’re supported by strong definitions showing exactly how those metrics are calculated. Also, a metric like Brand Awareness might well be measurable for an FMCG company running regular Brand Tracking research, but probably not for a small startup.
And of course, it’s impossible to tell whether any of these goals are realistic without knowing more about the person who set them.
Examples of SMART business goals
- The Founder will secure $3 million in VC funding before the end of the year.
- Achieve $10k in Monthly Recurring Revenue (MRR) in our first year of operations.
- Increase our number of Monthly Active Users (MAU) to 20,000 by 1 September.
Examples of SMART sales goals
- Miriam will bring in £300,000 worth of revenue this financial year.
- Every week, the outreach team will pass on at least 50 new leads who are expressing purchase intent.
- This month, the sales team will sell all remaining winter season stock, for over $30K.
Examples of SMART finance goals
- This financial year, the company will increase its cash reserves to $4 million.
- By the end of the month, the Invoicing Manager will reduce the number of debtors (with payments overdue by 30 days or more) from $99k to less than $50k.
- This year, the Finance Director will reduce the average time taken to report on MI requests from 5 days to 2 days.
Examples of SMART marketing goals
- Increase brand awareness in the 18-25 year old University Student segment, from 17% to 30% by the end of the year.
- Grow our LinkedIn following from 10,345 to 15,000 by the end of next quarter.
- This quarter, increase trialists signing up through our website by 10%.
Examples of SMART personal goals
- Be able to run a marathon in under 3 hours by next year.
- Visit 50 US states before I turn 60.
- Pass my driving test before we go on our honeymoon.
Before you set your goals, you have to have a clear strategy, so we’d recommend these books first:
- Good Strategy/Bad Strategy by Richard Rumelt — a jargon-free guide that explains what
strategy is and isn’t
- Lean Analytics by Alistair Croll and Benjamin Yoskovitz — a practical guide on how to break
your strategy into things that can be measured
And once you start setting your goals, these books are full of practical advice: