Setting goals as an entrepreneur is important. You need to do this for yourself, but you need to do it for your employees as well. Not only that, but you need to make sure you and your team are held accountable for their responsibilities.
The first thing to realize is that most of us don’t set proper goals, and some of us don’t even set them at all. Having a lofty vision is great, but that isn’t what is going to keep you honest and accountable with yourself. To have a goal that is something that you can be held accountable to, you need to start setting S.M.A.R.T. goals.
What does S.M.A.R.T. mean and why does it matter?
First, we need to clarify what a goal is, and how to set it. A goal is something that you aspire to do or accomplish. While that might seem simple enough, that’s only half the story. Take the following example: “The company is going to increase revenue.” While this might seem like a great goal to achieve, it leaves a lot to be desired. When are you going to do this? How are you going to do it? Is it even achievable? You see where this is going. To set a S.M.A.R.T. goal, you need to keep the following in mind.
S - Specific
Your goal needs to be something specific. Increasing revenue doesn’t really mean anything. Why not replace this with a number of your choice?
M - Measurable
Having something that’s measurable is critical. In management, there’s the constantly used phrase of “what gets measured gets done.” If our goal is something abstract, we can't really measure progress against it; it must be concrete.
A - Actionable
Some people use the word “assignable” for this, and that works as well. Either way, the goal needs to be something that someone can actually do. “Increasing revenue” is not something that can easily be assigned to someone, so there’s no real accountability. Actionable activities should also be a behavior since that is something that’s controllable by the person executing the goal.
R - Realistic
Have you ever been given a goal that’s unreasonable? It can be quite demotivating. Setting milestones that are realistic will motivate people to achieve them. A fun fact is that IBM used to set sales targets below what was reasonably expected. This made sales reps incredibly motivated to sell so they could get higher commissions quickly, and helped drive IBM to be one of the world’s largest companies.
T - Timely
This is one of the most important ones. Every goal absolutely needs to be on some sort of schedule. Without a due date, there is no sense of urgency to get the task done.
So, that’s the rundown on what S.M.A.R.T. is.
Let’s apply these rules to the poorly defined goal we set earlier. How about this instead: “The sales department is going to increase cold call volume by 25%, and increase revenue by $1,000,000 by the end of the quarter.” Now, we have not one but two specific goals. They are measurable, and more importantly, actionable because we can do specific behaviors associated with each activity. The goals are realistic, as well as timely.
Following this type of goal setting has helped our company and how we operate. It will change your team’s goals into something that’s actionable and drives results rather than glorified wishful thinking. Try it out, you have nothing to lose!