Would you invest in a financial product without knowing its projected return? Of course not. If an investment projected a 15% gain, would you want to know by when?
Of course you would. It is essential to know what to expect in order to make sound decisions about where to invest your resources.
Yet, many businesses fail to include measurable outcomes and specific target dates (aka objectives) in their growth plan. The age old adage is, “What gets measured gets done.”
Is your objective SMART enough?
You can evaluate the goodness of your objectives through a SMART test by asking the following questions:
- Specific – is it end results focused?
- Measurable – does it have simple, quantifiable success measures?
- Achievable – is it challenging and realistic given your resources?
- Relevant – is it in alignment with your big picture goals?
- Time bound – does it have a clearly stated end date?
For example, a growth goal might be: Win more first time clients. It’s an important business goal! But, how many, how profitable and by when? A SMART objective might be: Increase sales revenue through 10 first time clients with average profit of $10,000 by end of FY.
Case Study: Using SMART Objectives to double business profits
How to set SMART Goals
Consequences of inadequate objectives
Without clear objectives at least two key things typically happen:
- Tracking progress against tactical plans becomes difficult without clear success measures and target dates.
- People involved in taking action may have different views of successful outcomes. This can lead to over- or under-performance of critical tasks, and not meeting key milestone dates.
Of course just as it is impossible to guarantee financial returns, setting measurable objectives doesn’t guarantee their achievement. Results require determined effort. But, without measurable outcomes and specific target dates it’s a lot harder to be confident in your growth strategy.
Setting SMART objectives helps motivate the achievement of your growth plan because “what gets measured gets done”. Two critical questions for you to answer are:
- How SMART are your business objectives?
- How effectively do your objectives challenge your people to realise your full growth potential?