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A lot of people are working on their plans for next year, so I’ve had a heap of questions about goal setting in the past two weeks. For those of you who aren’t asking questions, but would still like some answers, I put together this post on how to set SMART goals.
This acronym was thought up by George T. Doran quite a while ago (check out the origin story). But it’s stuck over all this time, mostly because it works. SMART stands for Specific, Measurable, Assignable, Realistic and Timebound. It’s a checklist, of sorts, that will help you set goals in a way which increases the likelihood that you’ll hit them. There’s a lot more to achieving your goals than just setting them well, but that’s more than I can fit in a single post.
Here’s an example of a SMART goal, which I’ll then break down step-by-step below to show you how you can set your own SMART goals:
Goal: “By June 30 2019, I will have closed $500k in new business within our healthcare vertical.”
Specific Goals
New business? While you can get much more specific than this, I think short is good for goals. You want them to be memorable and the context of this goal will make it specific, without needing to be explicit.
For example, I’m assuming you know what business you’re in, what products/services you have to offer, etc. In a new business you may need to spell some more of this stuff out. This goal is specific enough that if I sell $500k in new business by June 30 but only $250k of that from the healthcare vertical, I have missed. “Will I know whether I hit or missed?” is a great question to ask yourself when it comes to being specific.
Measurable Goals
You need to use a number in your goal. Sometimes a goal is pretty easy to measure. For example, “I’m going to skydive” requires binary measurement; you either did or you didn’t. But in the case of business goals, this can often be the hardest and most important part.
Things that are measured are optimized. Those of you have gone from having no measurement in your business to having it, know the stark change it drives in results.
Goal setting is no different. Sales goals, like the one above, are generally pretty clear; sell more $$$, convert more opportunities. But for someone like an accountant, who’s job is to produce reports, it can be tougher. Considering variable like accuracy, timeliness, quantity, or % can help you get a number in place.
Assignable Goals
In the case of the goal above, it is assigned to its author. However, when you’re setting goals more broadly for an organisation or team, you’ll want to make sure there is someone who is directly responsible for delivering each of them.
I’ve written about how important accountability a few times. Check out this post on execution for a run down.
Simply put, it’s a game-changer. When someone knows they own a goal, they’re committed to delivering it, and need to deliver it to someone else, the chances of the goal being achieved increase exponentially.
Realistic Goals
This is the part where we take a look at the goal and do a gut check. The first step is to consider context.
I’m not going to be heading to the moon any time soon. Alas, I have some pretty real motion sickness going on. Even though the guys over at Virgin are working hard to make this realistic for more people, it’s still well outside my reach.
I’m aware of my inner-ear limitations and I’ve accepted my earth-bound fate. You’ll also want to do a bit of an analysis and answer the following questions:
What happened the last time we tried to achieve a goal like this?
What were our results for this last year, last month, last week, etc?
What are teams similar to ours able to achieve in this area?
Do we have a clear plan? Do we we have the skills and resources to execute?
What external factors will be helping or hindering us as we attempt to achieve this goal?
Depending on the type of goal you’re setting, a full SWOT could be helpful at this point, but it’s not a must. When you answer the five questions above, you should have a pretty good idea of whether you’re on the right track or not.
Considering the goal above in this context, if you only sold $100k over the same period last year, you’re likely going to need to change your goal.
Time Bound Goals
When will you have this done by? Without a time frame on your goal, you’ll never be able to achieve it.
If the example goal just stated, “I will close $500k in new business within our healthcare vertical,” I really won’t know whether or not I hit this goal until I’m laying on my death bead. That’s a little too long for me to wait, so it’s best to put a time frame on it.
To decide how much time to assign to your goal, work backwards. Start with what you’re actually going to do to achieve the goal, how long that will take, and then set your time frame accordingly.
Putting the effort in up front to make sure you have a properly set a SMART goal means you achieve way more of your goals. It can sometimes feel like a tedious process or a little over-engineered. Once you get into it, it quickly becomes second nature. Soon you’ll find that you use it everywhere.
[BONUS] Rhys’ Notes: 6 Tips Around How I Set Realistic Targets
Optimism Bias
You’re optimistic, you wouldn’t have started a business if you weren’t. That alone means you should reduce your expectations 10-20%.
Who has been there before?
Have you? Do you know the path to where you’re trying to go because you’ve been there before? Can you talk to someone who has?
Industry examples
Find similar businesses to bench mark off.
Self knowledge
Look at what your history is for setting and hitting goals.
Check your ego
Realize that while you might be above average, so is almost everyone else who has gone into business for themselves. You aren’t that much better than the people around you. But you can be more prepared.
Goal orientation
Set goals you know you can hit, but that you haven’t already. When you go through the goal, increase it. A run of winning leads to more winning, a run of losing leads to more losing.
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