SMART Planning: Defining Better Goals for your Business
January 28, 2015
Strategic planning for a business is difficult to say the least. It’s easy to start out with a generalized idea of what you want to accomplish, but then get lost along the way. There are so many facts, figures, and details to get straight that it can really wear you down. But good plans lead to better business, which makes SMART planning really important for building and sustaining successful business practices.
What is SMART Planning?
In this case, SMART is an acronym and process for evaluating whether or not the goals you set and the plans you put into motion for your business are complete. According to this device, business goals should always be Specific, Measurable, Attainable/achievable, Relevant/realistic and Timely.
What it means to be Specific:
Set a specific goal for your business which defines what success will look like in some way. For example, if you were to describe your goal as “Gain 10% more revenue than last quarter to support business growth,” you know that if your revenue exceeds last quarter by 10% or more, you will have achieved success.
What it means to be Measurable:
To be measurable, your goal must involve some form of qualitative or quantitative measurement that has already been taken, compared to the same qualitative or quantitative measurement on a future date. By comparing these two values, you can later see if there has been improvement, stagnation or reduced performance. In business planning, the tools or measurements used are typically referred to as Key Performance Indicators. For class based business in particular, this could be customer retention, enrollment numbers, number of courses offered, absenteeism, class occupancy rates, financial indicators, etc.
What it means to be Attainable/Achievable:
To be truly attainable or achievable, your business must already have or be able to acquire the resources such as staff members, funding, customers or whatever else might be needed to accomplish the goal. It also means fully defining the tools you will use to measure performance. If that data is not reliable or attainable, then it cannot be reasonably measured. And lastly, it means that those responsible for implementing changes or achieving goals and measuring success will be able to deliver on it. For this to be true, those team members will need to have a thorough understanding of the goal, know the motivations for achieving it, how it will be measured and how frequently to check on progress. They must also be empowered with the tools and authority to make the necessary changes to improve their results.
What it means to be Relevant/Realistic:
Goal setting must be both relevant and realistic. For example, if you have a goal to “Reach 1000 Facebook Followers”- then it meets the quantifiable requirement. But the goal in and of itself does not say how it is relevant to your overall business strategy. If you are setting a goal, simply to have a goal to reach, it’s probably not relevant to your business and the time spent going after it could be spent more wisely somewhere else. Further, are you wanting to reach 1000 Facebook Followers strictly so that you have a larger social media reach? Or are you trying to contact a larger portion of your existing customer base on social media—in which case, is it realistic for that percentage of your customer base to both have Facebook accounts and be enticed to follow your business? Depending on the ages, tech savviness and quantity of your customers, this may not be a realistic number. If you are just starting out on Facebook, getting 1000 new followers will probably require some spending on targeted advertising to drive customers to your page. If you do not have money budgeted for that purpose, this may not be a realistic expectation.
What it means to be Timely:
This portion of SMART planning is all about when that future measurement will be taken. At this point you have specifically defined your goal, developed a form of measurement and taken a current measure to base your future measure off of, made sure that the goal was achievable with your available resources under foreseeable circumstances, and ensured that it had a clear purpose or relevance that was realistic for your business to achieve. Now you must give yourself a time limit for future measurements toward achieving your goal. By taking measurement weekly, monthly, quarterly, or otherwise, you will have clear checkpoints to determine if you are making progress toward your goal.
Without SMART goals and planning, businesses often make the mistake of setting goals that are too lofty or difficult to evaluate. These generalized goals can be to “Improve Customer Service” or “Perform Better on Social Media.” While these are fine starting points, they are not easily measurable due to the number of variables that need to be taken into consideration.
How do you plan to improve customer service? Standard performance measurements for customer service might be the length of calls, number of emails, wait time or resolution speed. Perhaps your idea of improvement could be successfully integrating scripted dialog to create a more consistent customer experience; or maybe you simply want to see better ratings on customer service evaluation forms at the end of each quarter.
How do you define better performance on social media? Are you performing better by simply having more followers? Do you want to increase the reach of your posts by experimenting with post timing to reach more of your followers? Do you want to use advertising and links to drive more customers to your website from social media pages? Do you want social media to play a bigger part in your customer service tactics? These are all ways that social media can be enhanced. You could feasibly have fewer followers at the end of the set time period but also have five times the engagement, or interactivity, from those customers.
Why use SMART Planning?
Determining the success or failure of a goal without specific guidelines results in a lot of difficult to evaluate grey area. If your business is not defining SMART goals in your planning, employees may not know how their performance is being evaluated, how they need to improve, or be able to grasp the bigger picture of what your business is trying to achieve.