Every entrepreneur sets goals to achieve with his or her business: increase sales, get more customers, make the business stand out in the target market. However, these are very general goals, far from the definition of a "SMART goal", which is the ideal goal to which a manager should aspire. Setting SMART goals can determine the success of a business, because it allows one to organize one's resources so that all efforts flow in the same direction.
What are SMART goal?
The acronym "SMART" was coined in 1981 by George T. Doran, who defined it as a strategy to foster the achievement of a goal.
We define "SMART goal" any objective formulated to be Specific, Measurable, Achievable, Relevant and Time-based. When structured in this way, they become an optimal planning and organizing tool, enabling not only the setting of priorities, but also the timely measurement of the progress of the activity and the subsequent adaptation of the strategy, so that its effectiveness is always maximized.
Specificity is the basis for the other features: you need to clearly define what you want to achieve. Going back to the earlier example, "increase sales" is not a defined and circumscribed goal. One entrepreneur might be satisfied with 100 more sales in a month, another might want to increase them by 30 percent in a year.
To formulate a specific goal, ask yourself the following questions:
- Why do you want to achieve this goal?
- In what way do you want to achieve it?
- In what time frame?
- Who will be involved in the strategy to achieve it?
Defining a measurable goal means defining benchmark metrics so that we can compare the "before" and "after" and be able to assess whether the goal was actually achieved.
However big and ambitious a goal may be, if it is not really achievable it becomes a waste of time and resources. Think of the goal as if it was a destination: do you have the right means of transport to get there, or is it an unsustainable walk? Don't get caught up in your desires, in small steps and with the right tools you will get to even the biggest goals, but start one step at a time so you don't risk falling.
Would it make sense to allocate your resources toward achieving a goal that will not really make a difference to your business? No, which is why you need to make sure that the goals you set are actually relevant and useful in terms of cost/opportunity.
When setting a goal, it is not enough to figure out what you want to achieve: you need to delimit the time frame within which that result must be achieved. Let's take a very simple example, "I want to increase my following on Instagram by 100 followers." In a week? In a month? In a year? Defining the period changes both the measurement of the end result and the satisfaction that comes with it.
KPIs and SMART goals: how to measure performance?
Establishing SMART goals is also helpful in defining the best KPIs (Key Performance Indicators) to measure how your business is performing and whether your strategy is really working. These are performance indicators designed precisely to indicate success in achieving goals, either overall or for specific departments or strategies of the company.
Just as objectives must be specific and relevant, KPIs must reflect the sector and be relevant and indicated for the type of objective we are pursuing. They also reflect the time frame defined by the objective and measure its results.
Choosing the right KPIs means evaluating and reviewing your activities over time. This is an indispensable process so that you can optimize your strategy, and consequently maximize your efforts to achieve excellent results and reach the goals you set. Thanks to KPIs, you can choose on what basis you measure performance (weekly, monthly, quarterly, etc.), keeping each process monitored at all times and applying the necessary changes to best achieve your goals.
The difficulty of setting SMART goals and KPIs is often underestimated, leading managers to implement strategies that are sloppy and whose results are not measurable. Choosing to rely on professionals to support your business means choosing to implement a specific strategy, relevant to your business, achieving measurable results within a jointly agreed time frame. The Ander Group Team can help you define the right means to achieve concrete results over time that can really make a difference to your business!