Most of us have heard of the term smart goal setting, but in this article, we’ll define what is a smart goal and how to set up a system to incentivise and empower your teams to success.

What is a Smart goal? A smart goal is a descriptive way of breaking down a target or objective into something that can be easily understood, so it’s clear to see what what success looks like and when the goal should be achieved. It consists of the acronym ‘SMART’ which stands for:

  • Specific – Make the goal clear and concise (and not generalised and ambiguous)
  • Measurable – ensure you know when you’ve achieved the goal by describing how you’ll measure success
  • Achievable – Make it something that can be attained in the time you set
  • Relevant – Make it fit into the big picture and the their goals
  • Timely – Each goal must have a time-bound element. In other words, when should it be completed by?

An Example of a Smart Goal

Here’s an example to help clarify the smart goal formula. Let’s suppose we’re running an improvement project. Electrical units are failing in the field, causing customer complaints. Our SMART goal for the project could be as follows:

“Eliminate the cause of electrical shortage failures on the Agensys machine, by September 2021.”

Let’s break this down a little, so we can see SMART goal setting in action:

To eliminate (Measurable) the cause of electrical shortage failures on the Agensys machine (Specific), by September 2021 (Timely). 

Naturally, we can only assume that the project is achievable, as we don’t know the business or the problem. The project team itself was recruited to fix this specific problem, so the goal is very relevant to their objective.

The SMART goal helps create clarity and focus. Let’s compare a non SMART goal and see how ambiguous it is. It could be something like….

“Fix the Agensys service failures.”

In this example:

  • We don’t know what success looks like – what does the term ‘ fix’ mean? Where do we start?
  • We don’t know how long we have to fix the problem
  • We have no idea what the failures are and so not sure what we need to be prepared for
  • What if there are several issues on the machine, is it achievable in the first place to ‘fix’ all issues in one go?

Non-SMART goals don’t really inspire us. They are bland, unclear statements and are open to interpretation.

But with SMART goal setting, you can invigorate and energise your team, as well as show them exactly what success looks like.

For more examples on SMART goal setting in the workplace, take a look at our article on 30 SMART goal setting examples.

Link Your Goals to KPIs

SMART goal setting should go hand in hand with KPI setting. In other words, you must be able to measure how well you’re doing (using KPIs), before you reach the end target (your SMART goal).

The two are mutually exclusive.

Where a SMART goal tells you where you want to be and what the end result looks like, your KPIs (or key performance indicators) tell you how you’re getting on right now, in line with that target.

By choosing the right KPIs, you can measure your daily and weekly performance to plan. If everything is on target, then you know your goal by default, is still on track to be achieved in the deadline that you set.

If your KPIs are telling you that you’re falling behind, then you can take evasive action to get back on track – all in good time.

By checking in regularly, it allows you to stay on course. It’s like a cruise ship. If you leave it at the end of your journey, to check where you are, it may be too late to get back on track to the final destination.

If, however, checks are made at short intervals, the crew would have enough time to make small counter steps to keep on track, with little need for massive corrections.

Ensure your KPIs Have Targets

The key element of any KPI is to have a target. This target shows you if you’re on track or not. Link this with your SMART goal setting and you have a potent way of creating, and tracking performance to plan.

Without a target, your KPI is useless. Look back at the ship analogy again. If it didn’t have a target (where it should be, based at specific times along the journey), it wouldn’t be able to gauge whether it will arrive at its destination on time.

The same is true for your metrics.

Here’s an example of good KPIs shown visually.

  • Make 30 sales calls an hour
  • Produce 10 widgets an hour
  • Milestones 1 and 2 to be completed by the end of week 1

See how simple it is to track? You have either hit the target or not, and so it’s either a yes / no, or ‘green’ / ‘red’ status.

If you made 20 calls this hour, you now need to think about how you recover the 10 missed calls, so you can be on track by the end of the day.

Tracking a metric against a target, allows you to quickly see any gaps to plan, so you can get back on track

For more help on this subject, we’ve written a guide on usuing visual management to turn your hidden workplace into a visual one.

How to Create KPIs That Link to Your SMART Goal Setting

Step 1: For each SMART goal, brainstorm how you could achieve it. List as many ideas as you can.

For instance, if our SMART goal was to reduce the lead time to our customers from 5 days to 2 days, within 6 months, I may list some of the following ideas that would help reduce quoting time:

  • Improve the website product descriptions, to prevent unneeded customer enquiries
  • Quoting process to provide non standard quote turnarounds within 4 hours
  • Improve picking process to an average pick of 30 seconds
  • Increase training across the teams, to ensure there is enough cover to keep the quote and picking process manned adequately
  • Improve stock availability to ensure the products we sell are always on the shelf

Step 2: Now choose the actions that are more than likely going to help you get there

In this example, We’ve chosen the following to measure:

  • Quoting process to provide non standard quote turnarounds within
  • Improve picking process time
  • Improve stock availability to ensure the products we sell are always on the shelf

Step 3: Define the level of performance, that you need to achieve, to meet the SMART goal

Here’s our example:

  • Quoting process to provide non standard quote turnarounds within 4 hours
  • Improve picking process to an average pick time of 30 seconds
  • Improve stock availability of 98% on all regular selling products (often called runner products)

Step 4: Break down these SMART KPIs into a number of actions, so you can identify how to achieve your goals. 

Often, it’s not enough to just set targets. You may physically have to change processes and how you work, to get there.

In this case, this step allows you and the team to brainstorm what you need to do to achieve these KPIs.

Here’s the top level actions we could take in our example.

Quoting process to provide non standard quote turnarounds within 4 hours could be achieved  by:

  • Improving training and ensuring there are 3 people competent to run every part of the process, so no process is left waiting for a person
  • Improve product descriptions on the website, so the quoting team don’t have to waste time dealing with mundane standardised quotes

Improve picking process to an average pick of 30 seconds could be achieved by: 

  • Moving items that are picked regularly, closer to the packing bench
  • Improving labelling of all items for quick retrieval
  • Creating standard stock locations to make it easier to pick

Improve stock availability of 98% on all regular selling products could be achieved by: 

  • Complete stock profile analysis to understand the top selling products, first
  • Create a process to order top selling products regularly from suppliers, so we don’t rely on long lead times that may cause stock outs
  • Create contracts with key suppliers to agree order frequency and rates

Notice the process we’ve followed:

  1. We’ve identified a goal and ensured it’s SMART
  2. We haven’t stopped there. We’ve then brainstormed ideas to help measure our performance, and added targets, so we can tell if we’re on track or not each day
  3. We’ve then created some improvement actions that will help us achieve and then maintain our KPIs (which in turn will help us achieve our SMART goals).

This step by step approach is the ideal way of using SMART Goals and creating good SMART goal setting.

Reduce the Burden

During the SMART goal setting process, there’s no point in providing too many goals. I’ve seen many businesses dishing out 15-20  goals for each individual in a year.

I’ve also seen teams having over 10 goals to strive to achieve. 

None of these are a great means of implementing SMART goals. The trick is to focus on less than a handful of goals.

The same is true for your supporting KPIs. Don’t come up with 10-25 different measures. It will create overload and stress.

If you have 1-2 goals, then settle with a handful of metrics that will really help you track performance and to help identify those improvement actions.

Conclusion:

There have been a number of studies over the years, that link smart goal setting to increased team performance. To name a few, a 2016 study statistically highlights the importance of clarity and self management around goals.

The CIPD also highlight the importance of goal setting and SMART goals as the foundation to achieve goals and motivate teams.

SMART goal setting allows you to create clarity in setting objectives. You must create clear goals to show what success looks like and to give direction and clarity.

Then link good KPIs to these goals, to track whether you’re on target or not, and to make adjustments to get back on track, all in good time.

Remember not to set too many goals at once. So to avoid overload, try to keep yours down to a few. The same is true for the supporting KPIs – only a few critical metrics will do, so we do get overburdened with reporting data.