A common difficulty which you probably already had and certainly will have in the future is validating a business decision. Whether it is a human resource, marketing, sales or operational decision, the key to understanding if it is the right one is to calculate the effects brought about as a result of it. Doing this sounds easier than it actually is, especially if you do not implement SMART objectives in the decision-making process.
Whilst the SMART acronym is easy to understand, implementing it is far more challenging. The following guide will help you formulate successful SMART objectives.
Specific & Measurable
Why do you need to take this decision? What do you aim to achieve? What can your business accomplish? These are the questions you should be asking yourself when formulating the specific objective of your decision. This is no time to be vague. Phrases such as “become better at marketing”, “increase sales”, or “increase employee satisfaction” are not suitable for this exercise.
Instead, think what specific result would make you accept that you have become better at marketing, or any other vague objective. Use this specific result to create your specific objective. This could be, for example, “have 5,000 users view an advertisement”, “complete 100 new sales”, or “decrease employee attrition rate by 10%”.
Numbers are easy to understand and memorise, and they allow you to keep track of your progress easily. Using numbers is also great when you are sharing your targets with your team since there is little chance of ambiguity or misunderstandings. Before you decide on these numbers, however, you need to ensure that you have a way to collect the information.
There is no point to set a goal of having 5,000 ad viewers without being able to know how many people are actually looking at it. This information can come from a variety of sources, but you might need to invest in big data collection. For certain targets, such as marketing, you could rely on information provided by ad platforms, such as Google and Facebook.
Attainable & Relevant
By simply writing that you want 100% more sales on a SMART objective plan is not going to make it happen. You need to get your team on board and in order to achieve this, you need to suggest attainable goals. Listing unattainable goals is often done when preparing company valuations, and then entrepreneurs end up with the pressure of achieving these impossible goals.
Being ambitious is great, but you need to be realistic. If you present an unattainable target you risk de-motivating yourself and your team when you don’t reach it. It is a good idea to set challenging goals but split the achievement of these goals into smaller, more manageable targets.
For example, if your ultimate goal is to increase sales by 100%, start by increasing them by 25%, then another 25% (from the previous target), and finally another 25% (from the previous target). Every time you achieve these smaller targets you will be motivated to achieve the next one, and you won’t be affecting the overall goals of the business.
For SMART objectives, the term Relevant has two meanings. First, the term means setting goals which are in line with the company’s mission, values and objectives. These should be clearly defined in your business plan. If you set goals which are unrelated to the core business you risk being distracted. Similarly, setting irrelevant goals could de-motivate your team who might think that the goals are not worth their effort.
The second definition of the term is relevance based on the business’ current environment. Businesses don’t operate in a vacuum, and your goals should reflect the current and projected climate you exist in. There is no point in setting a target for an increase in sales of 100% if there currently is an economic depression.
Setting a time limit for each objective is important. You’d be surprised how quickly you could get distracted from your primary objectives as day-to-day business issues arise. Setting a time limit ensures that, no matter what, you allocate time and resources to reach your objective. Objectives with no deadline will probably never be achieved.
Be wary of long-term objectives, as they can easily lose steam. As we discussed earlier, try and divide objectives lasting months or years into smaller and shorter ones, lasting no more than a couple of months, but ideally not more than one.
Setting short timelines will allow you to continually see if you are reaching your minor goals. If you’re not, you can amend your strategy accordingly. By doing this will also be able to congratulate your team on reaching these goals more often. This could potentially provide them with the motivation necessary to achieve the ultimate goal.