As he walked to the stage, he had a grin on his face. We all knew something was coming, but what? We’ve seen that look before – I’ve got something big planned and it’s going to make a splash. Jim, our CEO, began talking about the 20 year anniversary of the company coming up this June. Then he hit us with it: I’m setting a new goal for our company today: I want to serve 20,000 customers by the end of this year in honor of our 20 year anniversary.
In our best year, we had 2,000 customers. In a great economy. We’re all sitting in the company staff meeting dumbfounded. What does he mean by 20,000 customers? What are we going to do to reach that number in this economy? He can’t be serious can he? We just finished setting our corporate goals, is this replacing one or is this just an added goal?
As the weeks came after that staff meeting, we sat down as a management team to develop a plan to achieve this goal. Without a significant investment in marketing and growth, it would be impossible to meet this new goal. Jim didn’t want to hear it: we are going to meet this goal!
There are many times in your professional and personal life that you will set goals. Goal setting is often cited as the “secret” to success for the most successful people in our society. Unfortunately, 80% of our time working is often not working towards our goal and 20% of our work contributes 80% of our performance success. The challenge is to define the best goals we can a plan to achieve them.
We must define smart management goals to be successful – we’ll call them SMART goals:
- Specific: the goal must be specific as to what we want to achieve. By the end of 2010, our gross margins will increase 15%. The goal should clearly define the specific result we want to achieve.
- Measurable: a goal which is not measurable cannot be achieved. We want to improve customer service is not a sufficient goal – if we cannot measure our result, it is not a goal. We want to improve customer service by 35% as measured by our quarterly survey is a measurable goal.
- Attainable: the goal should be ambitious, but attainable. If your company has only ever served 2,000 customers in a given year and you set a goal to serve 20,000 customers (without some significant change in company size or budget), you are likely to fail. If you have served 2,000 customers for several years, perhaps serving 3,000 customers isn’t that much of a stretch. Make your goals ambitious, but achievable.
- Relevant: goals should be relevant to your vision and mission. If you’re Best Buy, setting a corporate goal to increase clothing apparel sales is a poor choice. We worked with a banking software development firm that was setting goals regarding their customers’ growth and not their own. These goals are not directly relevant to what the company was doing – they could not control whether or not their clients grow. All they could control was growing their own client base.
- Time-bound: your goals should have a definitive start and end. A goal with no end date will continually be moved. Committing to a due date will allow employees to create milestones to achieve on the way to that goal.
SMART goals create more efficient and better managed firms. Employees and managers should work together to set SMART goals which meet your department’s missions and vision and flow up into the corporate goals, mission, and vision.