To set effective goals the S.M.A.R.T. framework is a great place to start. It’s widely used, doesn’t really have any competitors, and gives clear, practical advice.
We’ll help you get the most from the framework, with an in-depth guide to each of the rules.
But we’ll also introduce some crucial pointers that S.M.A.R.T. doesn’t cover. More on these later, with our new and improved mnemonic…
- Specific – target a specific area for improvement
- Measurable – quantify or at least suggest an indicator of progress
- Assignable – specify who will do it
- Realistic – state what results can realistically be achieved, given available resources
- Time-related – specify when the result(s) can be achieved
The concept of S.M.A.R.T. goals was coined by George T. Doran in 1981, in a surprisingly short article called: ‘There’s a S.M.A.R.T. way to write management’s goals and objectives.’ It’s still hugely popular today, but it’s been expanded upon a lot.
The S.M.A.R.T. framework in detail
Before we go through the S.M.A.R.T. rules, here are the main types of goals we’ll be talking about:
The two main types of goals
- KPI-based goals, e.g. Increase conversion rate to 5% by the end of Q2
- Completion-based goals, e.g. Launch new product in January
You need to make it crystal clear what you’re aiming for, and what success looks like.
Language is half the battle here, so try to avoid any weasel words like ‘leverage,’ ‘develop,’ ‘improve,’ or ‘optimize’ as they’re open to interpretation.
Also, when it comes to KPI-based goals, specify how you’re going to measure them:
- If you’re using averages, decide on the timeframe and whether you’re using the median or mean
- If your goal is to improve something by X%, agree on the baseline
- If you have multiple definitions for a metric (e.g what you class as an ‘active user’) make sure everyone uses the same definition
And lastly, for completion-based goals, make sure the scope is tight and can’t be misinterpreted. For example, if you were a software company shipping a new feature, you should lay out the specifics of that feature from the start.
Good goal: Increase signups per month to 5,000
Bad goal: Improve signups
A KPI goal needs to be measured, but sometimes this just isn’t possible. For example, you can’t measure the exact revenue created by a print ad. So you wouldn’t set this as a KPI.
But even if the thing you care about is measurable, it won’t necessarily work as a goal. Particularly when:
- The metric you’re measuring is naturally volatile. This will make it really hard to see your impact, so you won’t know whether you’ve achieved the goal or not
- The metric is lagging. This type of metric only shows how you’ve done; it doesn’t show how you’re doing right now. And this is no good for your goal as you need it to be actionable and motivational
In both of these cases the solution is to use proxy metrics, which are easily measurable stand-ins for your goals.
There’s no point having a goal if no one’s responsible for hitting it.
But having many owners for a goal can also cause problems. For example, if several teams are working towards the same goal, you can’t see which team is over performing or underperforming. And this can be demotivating for a team if they feel their goal is being affected by someone else. Particularly if one team is more invested than another.
To avoid this, try to assign separate goals for each team. Or combine the teams so they’re not conflicting with each other.
If goals are set unrealistically high they could demotivate your team.
It’s also argued that aiming high is better than ‘sandbagging.’ This is where you lower the bar and set goals you already know you’ll hit. Which is undoubtedly bad for teams as they won’t be inspired to push themselves.
So, how high should you aim?
Well, it slightly depends on your team’s culture, and how receptive they’ll be to lofty, long-term goals. But our advice is to go for big goals like these, so long as you back them up with doable yet ambitious short-term objectives.
This approach would work well with the OKR framework. With this, you set bold objectives, score them from 0 to 10, and break down exactly what needs doing to hit each score. So your team is inspired to aim high but they have something tangible to strive for.
We’ve talked generally about how realistic you should be with your goals. But how do you know what’s realistic when it comes to numbers? For example, if you’re a SaaS (Software as a Service) company, is doubling Conversion Rate from 10% to 20% achievable or ridiculous?
Benchmarking — looking at similar companies’ numbers — can help you answer this type of question. So, if you found that the best Conversion Rate for all SaaS companies was 20% you probably wouldn’t set a goal of 40%.
However, benchmarking isn’t an exact science and it only works if you’re comparing yourself to very similar companies.
Wherever possible, it’s often better to use your own historical data. For example, if you previously ran a marketing campaign and it generated 1,000 Leads it would be realistic to set a goal of 1,500 Leads for your next one.
This pointer really falls under the need to be specific, but ‘S.M.A.R. goals’ isn’t quite as catchy.
Basically, you just need to give your goals a deadline. Otherwise you can’t use them to gauge performance. And teams won’t have the impetus to get stuff done.
Good goal: Increase signups per month to X by the end of Q3
Bad goal: Increase signups to X
Crucial pointers that S.M.A.R.T. doesn’t cover
In our experience, you can follow S.M.A.R.T. to the letter and still do goals badly. This is because there are crucial pointers and pitfalls that it doesn’t cover.
With these in mind, we’d recommend making your goals S.M.A.R.T., but also:
To have a positive impact on your business, it’s crucial that your goals link back to your strategy. Otherwise your team’s efforts could be counterproductive, or at the very least wasted
Why KPIs are generally better
In almost all cases, KPIs are better than completion-based goals. Because, as long as you set your KPIs well, they directly track the progress of your strategy.
In contrast, completion-based goals can quickly become a list of tasks. And if you’re too focused on the task, i.e. to introduce a new CRM, you might lose sight of the desired outcome, i.e. to increase sales.
That said, there will be times when a task is the outcome you want. For example, if you’re holding an event to generate leads then arguably the event is the outcome in its own right.
Really, the type of goal you choose comes down to common sense.
Try to set a KPI that aligns with your strategy, but if you need a completion-based goal in its own right, then go for it. It’s better to have this than no goal at all, and it’s fine to have a mixture of goals.
People can only remember and focus on a certain amount of things, so you don’t want too many goals. While there isn’t a magic number, aim for as few as possible. And only set one if it’s actually important
Goals can easily get forgotten, so it’s really important to discuss them with your team and give regular updates. Naturally, we’d also recommend displaying them on a TV dashboard, to keep them front of mind and allow your team to track their own progress
As priorities change your goals may lose relevance, so it’s important to review them regularly.
Check that they still reflect what you’re currently aiming for, and that your team are still finding them helpful. And if the goals are no longer relevant, kill them rather than putting them on the backburner. Otherwise your team could lose confidence in the system and stop taking goals seriously.
It’s also good to schedule time each cycle for deeper reflection on what’s working or not working
If a goal isn’t carefully considered it can have the opposite effect to the one you wanted — otherwise known as the Cobra Effect. To keep your goals watertight, you should track health metrics alongside them. These are metrics that you’re not directly trying to improve, but help you keep an eye on things. So if one of your goals causes an unintended consequence, you’ll be on top of it
When you’re setting your goals, don’t just think S.M.A.R.T.: think S.M.A.R.T - A.S.S.E.S. Yep, we saw the opportunity for a mnemonic so we took it.
And remember: there are rules for setting goals, but there are no rules for how to achieve them. So encourage your team to find their own way, and be as creative as possible.
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:
- Measure What Matters by John Doerr — case-studies from famous companies who’ve used OKRs for explosive growth
- Practical Performance Measurement by Stacey Barr — if you go for KPIs, this is the ultimate guide along with the Measure Up blog
- The Practice of Management by Peter Drucker — fundamental principles for management by objectives, with a great explanation of why teams should own their goals