In business, we all work towards goals. Achieving goals is usually what our work life is centered around.
However, if these goals are not clearly defined, attainable or managed through to delivery then they are not worth the paper they’re written on, there owners often becoming disillusioned.
Why you need great goal statements
In simple terms, clear goals deliver clear results.
Without clear goal statements, we may not know what our company is trying to achieve (or whether it has achieved it), this leads us to typically waste time on non-value add activities (that we may think, incorrectly, are adding value).
Unfortunately, not all business set great goals (or even understand how the goals they do set relate to corporate strategy) and many fail badly. Usually, this failure is driven by the setting of either large complex unachievable goals or fuzzy, unclear unrelated goals.
In this post we’re going to look at goal setting methods & goal setting examples, we’ll cover 4 different methods:
- SMART objectives
- CLEAR objectives
- FAST goals
- HARD goals
What is a goal statement
Goals are usually deployed to drive action and provide direction. As you can see from the diagram below, goals setting forms part of the hierarchy of strategy and sits underneath the companies vision and mission statements.
Goals are there to help us:
- Understand what we have to do
- Drive step changes in results and help us achieve great things
- Link to a bigger corporate mission
- Bind us emotionally to succeeding
- Facilitate collaboration between teams
Why great goal statements matter?
Which of the following is the best goal statement?
Take a look at the two examples below:
1/ I’m going to be a millionaire
2/ By the time I’m 30 I’m going to own a retail business that will drive revenues enabling me to have a net worth of over one million dollars
Which is best and why?
The goal statement does describe an aspirational step change that is being targeted. When you look more closely at the two, perhaps number one could be best referred to as a dream, while the second contains a target and several measurable details that will enable you to track success.
Neither goal statements state how you will achieve the goal (or whether it’ll require new skills or require you to collaborate with other parties) – it merely describes the end state you’re looking to achieve.
Now consider how this applies to goals in a business setting and what happens if you get your goal statement wrong. Your employees fail to add the value that you require (due to confusion) and money and time are wasted.
How to write a goal statement
So a great goal statement describes an objective to be accomplished, and some details around what the end state will look like when it’s complete (i.e. “cost base reduced by 25%”) and when you expect it to happen.
However, a great goal statement isn’t just about delivering something. Great goal statements drive change both in terms of the business and the owner of the goal (through new skills etc). Great goals tie the owner emotionally to them. And if the goal is a stretch target then those changes are likely to be significant.
Alternatives to SMART goal setting
Chances are if you’re researching Goal setting most people will tell you that you need SMART objectives, and yes we’ll cover that here, but there are other methods. There are question marks over the use of SMART objectives and their effectiveness to drive significant change, they don’t necessarily work for everyone, indeed many of the alternatives try and build in an emotional link to the goal that you’re trying to achieve which is something that SMART doesn’t typically utilize (there’s a belief that a goal without an emotional or aspirational link is unlikely to be successful) SMART also doesn’t directly drive improved working practices (i.e. collaboration).
Ok so let’s look at some examples of goal setting methods.
1/ SMART Goal setting
The first example we’re going to take a look at is Smart Goals
Smart is an acronym for
Let’s have a look at those attributes in a little more detail:
The whole purpose of a goal statement is to show what is being targeted by your business to accomplish. The use of language here is very important, for example – consider
a) I want to look at the cost structure
b) I want to reduce costs
Statement (a) is a little fuzzy where (b) clearly states the intent.
As we stated above a goal statement should state clearly what is being accomplished. By clearly defining a measurable requirement (i.e. reduce costs by 25%) you are then able to analyze whether you have accomplished it or not. Many business goals do not take five minutes to finish and may take many weeks months or even years to complete so being able to measure progress and see what tangible improvements have been made is crucial.
Setting a goal that you cannot achieve would be stupid. A smart goal is realistic and is attainable. Well, the objective may be hard to achieve (it might require new skills or financial outlay for example) it should still be sensible.
There is no point in having a goal that is not relevant to your organization success. Relevant goals deliver something worthwhile to your company and apply to the current business strategy.
This refers to the requirement to state clearly how long the objective should take.
Let’s look at some Smart goal statements examples:
1/ Increase our click-through rate on our commerce website by 25% in the next 6 months
2/ Reduce our operating costs by 10% within 6 months and a further 5% in the following 6 months
3/ Introduce a minimum of 2 new product ranges to our European market within the next 18 months
4/ Grow our Social Media following by 15% within the next 12 months
5/ Reduce our Supply Chain Procurement costs by 2.5% by the end of the next financial year
2/ CLEAR objectives
Clear stands for:
- Collaborative – Goals should specifically drive employees/teams to work together
- Limited – Your goal has a clear scope
- Emotional – Achieves emotional buy-in of the team/individual that you’re setting the goal on (it matters to them, they can visualize the results and the importance to them that it happens). One way of achieving this is by aligning it to their objectives. Having an emotional buy into your objective implies you’re far more likely to achieve it.
- Appreciable – this refers to goals being set at a smaller attainable level so that you can build goals in stages (rather than one massive goal you might have a series of smaller – measurable – goals building to the same result.
- Refinable – As your project moves forward and lessons are learned you should be able to refine your goals. While this might seem an alien concept for some (surely your goals are there to be achieved not modified, it does stand to reason that there should be some form of feedback from the work that you’re doing then being fed into updated goals and objectives (and don’t forget your goals don’t have to be reduced as you learn they can be extended!!).
Here are some examples of CLEAR objectives
1/ To participate in Engineering & Supply chain projects to select 5 parts and launch design for cost projects for each, delivering 5% cost savings on each component selected within the next 18 months.
2/ Marketing & Design departments to launch a customer feedback project and utilize results to prototype & launch 10 new products into the European market within the next 12 months
3/ Quality & Supply Chain teams to introduce a minimum of 5 continuous improvement projects within the 5 worst performing suppliers and deliver a minimum of 15% improvement in on-time delivery
4/ Supply Chain and HR to Develop & launch Personal Development plans for all management grade staff within the next 12 months
5/ Engineering & Quality Department to launch Key Performance Indicators & root cause program delivering 5% reduction in Drawing updates within the next 12 months
3/ Fast goals
FAST stands for
- Frequently discussed – How many of us have undertaken our annual review, been set a series of objectives by our boss, only to find that 12 months later, they were not really the priority and barely got a look in? In reality, our Goals need to be a priority for us – the meaning behind frequently discusses is that they should be at the front of our to-do list and of key focus.
- Ambitious – FAST goals take the stance that there is little point in starting on a goal if it’s easily achievable – Goals are there to be challenging. Most businesses want a level of incremental change, setting your goals to be ambitious but achievable helps to drive that
- Specific – Similar to the other methods, this sets specific details around the goals (i.e. time and value-based concepts).
- Transparent – This one is an interesting concept (and has pro’s and con’s) that the other goal-setting methods don’t explicitly utilize that is that goals should be transparent and visible to others. The reason is, of course, that if you share your objectives with others that it helps to make you accountable – I’m not sure whether this would work in all businesses but clearly would help drive the focus of those receiving goals. Let’s face it you wouldn’t want to turn up to too many team reviews and demonstrate that you’ve not made progress.
Example FAST goal statements:
1/ Increase our online sales by 20% within the next 12 months
2/ Reduce our Logistics costs by 15% within 6 months
3/ Launch 5 new sales channels within the next Financial Year
4/ Reduce outsourcing personnel costs by 15% removing all contractor staff within the next 12 months
5/ Outsource our Supply Chain Management function, reducing costs by 15%, within the next 12 month period.
4/ Hard goals
Finally in our list is HARD goals – don’t worry these are not impossible goals that are being set HARD is merely another acronym. HARD goals are centered around the why behind the goal and ensuring the goals deliver a step change. For example, is the goal going to help you achieve something great? Are they going to push you to learn new skills?
It’s not that HARD goals (go check out Mark Murphy) are written very differently from other goal-setting methods, it’s that the intent behind them is VERY different in that the goals aim to have actual meaning and drive step changes and deliver something to the owner of the goal taking them outside of their comfort zone and teaching them new skills along the way.
HARD stands for:
- Heartfelt – Goals that enrich others (i.e. customers)
- Animated – I can comprehend how the goal will make me feel when I achieve it
- Required – my goals are important to the success of the company
- Difficult – my goals will take work and/or skills (some of which will require learning) to help me achieve them.
1/ Reduce product defects delivering an improvement of 10% on customer returns within the next 6 months.
2/ Reduce Customer wait times on support channels by 15% within the next 12 months
3/ Reduce “delays to start” within the manufacturing facility by 25% within the next 12 months
4/ Improve click-through rate on company website by 15% within the next 6 months
5/ Reduce customer lead times by 10% within the next 12 months
Goal setting is extremely useful but think carefully about what you’re setting out to achieve and select a method that works for you!
This has been an interesting journey into goal setting. Traditionally most of us will look to utilize some form of SMART goals but it’s interesting to delve into other methods and see the pro’s/con’s against using SMART. SMART is more black and white and doesn’t explicitly drive cultural behaviors (such as a collaboration) that your business may want to utilize. The other fascinating aspect for me is how to achieve emotional buy into your objectives. This can be a clear enabler for many.
What do you think? Have you tried alternatives to SMART objectives, how did it work out for you? Maybe you utilize something else? We’d love to hear your feedback in the comments section below or DM us on Twitter.