Entrepreneurs know that all goals are not created equal. Some are built upon a pressing need or a quick, easy win. Others might take shape as a stretch goal. But when it comes to sustaining growth as a business, proper goal setting is critically important. Yogi Berra, the famous baseball player and coach known for his humorous and witty remarks, once said, "If you don't know where you are going, you might wind up someplace else." This article delves into the importance of setting clear goals and offers a popular construct for establishing them, which is to make them SMART. We’ll break down what that means, how to achieve SMART goals, and what those SMART goals can do for a business.
There’s an old saying in business: You’re either growing or you’re dying. Sounds harsh, but it’s irrefutably on point. Companies that fail to establish goals are likely to stagnate and almost surely fall behind their competition in key categories like revenue growth, talent acquisition, customer retention, brand recognition, and more.
The question is, what are the key drivers to this all-important growth? And why do so many companies fail to achieve it? We’d argue those companies fail to get everyone on the same page about what their goals are and what it will take to achieve them. This is where a SMART goal system can make all the difference.
It’s widely held that George Doran first introduced the idea of SMART goals (specific, measurable, achievable, relevant, time-bound) in a 1981 Management Review article. He found that too many goals were either unfocused or too vague to have a meaningful impact, so he developed the mnemonic acronym to help leaders shape their goals in ways that create the clarity and focus needed to achieve results.
Like many companies, we use this system at Ninety to frame up our 90-day goals (known as Rocks), and it works really well. So let’s dig into it and see how making goals SMART can help businesses succeed. After all, as noted author and motivational speaker Zig Ziglar once said, “A goal properly set is halfway reached.”
The Benefits of SMART Goals
Before we discuss SMART goals, let’s first align on exactly what goals are, from a business perspective. Goals are the overall accomplishments you want to achieve that support your organization’s larger Vision. They align individuals, teams, departments, and the whole organization to provide a clear picture of where you're going and what success will look like. They also:
- Give everyone a clear understanding of priorities and help explain why certain decisions are made.
- Provide a way to track and measure success.
- Give us opportunities to celebrate.
- Make it easier to reward performance… or talk about issues that might affect performance.
Several core disciplines are associated with creating rock-solid business goals, but making them SMART is among the most important. Doing so ensures there's a clear “yes” or “no” in determining whether we’ve hit the goal. Here’s what SMART means:
- Specific: Create a one-sentence description of what success looks like. So, not just “increase revenue” but, instead, “Increase revenue by 10%, with half of the revenue coming from our exclusive line of sustainable products.”
- Measurable: These are the metrics used to determine success or failure. There won’t be any surprises when the time comes to review the goal’s outcome because you’re tracking the key data on a regular basis. And the number is either hit or it’s not.
- Achievable: This is an accounting of the existing competency, commitment, and capacity. Are the resources in place to achieve the goal? And do team members have the skill, desire, and capacity to bring the goal to the finish line? If yes to all three, we like the odds of reaching that goal!
- Relevant: Here, we create the connection between this goal and a longer-term goal. This is where we examine if the goal ladders up to the company’s Vision or purpose.
- Time-bound: This is a precise description of the goal’s deadline, along with the deadlines established for any associated Milestones that support the goal.
The aim is to create something with enough time for action but not too much time to reduce any sense of urgency.
Using the above framework for your goals will absolutely lead to improved business performance and, subsequently, growth. Layering the details into each component increases both transparency and accountability for anyone associated with a SMART goal, helping to strengthen what is hopefully an already-thriving culture.
Because the structure is so detailed, everyone can agree on what “done” looks like, allowing for accurate departmental review and alignment. (As many know, we’re big on agreements here at Ninety.) What’s more, SMART goals will help with the all-important strategic planning and resource allocation needed to achieve those goals.
A word of caution, though: Don’t put your entire focus on SMART goals and overlook other areas of your business. Remember, these are goals designed to fit within (and fully support) longer-term initiatives. Everything needs to be working together, aligning with an organizational Vision for sustained growth and success.
How to Create SMART Goals for Your Business
Let’s examine a few tips for creating your SMART goals. First, we need to be specific about the goal by asking exactly what it is we want the goal to accomplish and whether achieving it will have an important impact. This will help minimize any miscommunication and make clear what actions need to be taken.
By making the goal measurable, teams can allocate resources appropriately through data-informed decisions. At Ninety, we use Scorecards in our Data tool to organize and manage data in a readily accessible, centralized hub.
It’s important to acknowledge that some goals, no matter how SMART, might not be achieved. Aiming for 100% is not advisable because such expectations can have a negative impact on morale when, inevitably, we miss the mark for one reason or another. In fact, research suggests that a 15-18% failure rate helps promote learning. That’s a good thing, of course, because we’re learning animals. So when setting goals, aim to complete 80% or more of them. To meet this challenge, we need our goals to be achievable. Balancing a goal’s target above a cheap win and below an impossible ask is vital for a meaningful experience.
When goals are relevant, they unite teams, departments, and organizations. Every action is designed to move closer to the goal, a goal that should also dovetail with longer-term goals and the overall organizational strategy. (Those 1-Year and 3-Year Goals make great filters as shorter-term SMART goals are constructed.) By making it time-bound, clear parameters are set for getting it done. We use To-Dos and Milestones as sub-tasks to help achieve the goal on time. This promotes accountability and transparency along the way to completion.
Examples of SMART Goals for Your Business
So now that we know what SMART goals are and how to create them, what do they look like? Here are a few examples, starting with an organizational, revenue-based goal:
- Specific: We will increase our quarterly traffic to our website by 15% by the end of the quarter to coincide with our summer sales promotional activities.
- Measurable: We will look to grow site traffic month over month, tracking marketing activities that prove to have the most impact, for a cumulative increase of 15%.
- Achievable: Our paid advertisements and brand campaigns have consistently generated increased site traffic at an average of 9% each year without the aid of a sales promotion. Adding that lever to the mix for this goal makes it highly possible to achieve.
- Relevant: Increasing site traffic will boost brand recognition, email/newsletter subscribers, and site conversion, hitting on key metrics that support larger organizational goals.
- Time-bound: Every four weeks, we expect to see site traffic grow 4–5% and reach a total of 15% by the end of the quarter.
Now let’s try one that serves as a departmental goal. Customer Success departments put plenty of focus on active subscriptions and customer retention, making customer churn an excellent candidate for a SMART goal: Increase customer retention rate by 5% in the next quarter.
- Specific: We will increase our customer retention rates by 5% in the next quarter to coincide with our new product update.
- Measurable: We will look to reduce the number of customers who cancel subscriptions each month, tracking Customer Success activities that prove to have the most impact, for a cumulative retention increase of 5% over four months.
- Achievable: New product launches and product updates consistently increase customer satisfaction in the short term. The Customer Success team will collaborate with Support to ensure we receive actionable feedback from customers on how we may improve their experiences using our products going forward.
- Relevant: Reducing customer churn is crucial to meeting our revenue goals for end of year.
- Time-bound: Our expectation is to retain 1–2% more customers each month than we did last quarter, for a total of at least 5%.
Like any new skill, establishing SMART goals doesn’t just happen overnight. It takes some practice. But that effort pays dividends that can’t be overstated when things are really humming and all those goals are supporting a larger organizational Vision.
Setting SMART Goals for Individuals
The beauty of the SMART goal framework is it can be universally applied, whether it’s at the organizational, departmental, or individual level. Let’s now look at an example for that last one.
Imagine a writer needs to set a goal for producing a number of blogs by a certain date. They might state the goal as such: I will produce SEO-focused copy for six new blogs by October 1 to increase reader engagement. Then, they make this goal SMART:
- Specific: Write SEO-focused copy for six blogs that are reviewed, approved, and published by the due date.
- Measurable: A total of six blogs will be written — three blogs in August and three more in September — and will generate at least an 8% increase in subscriptions within 30 days of the final article we publish.
- Achievable: A review process is already in place and other work has been accounted for over the next few months, making this an achievable goal.
- Relevant: This goal is relevant because publishing engaging content is a key focus for the Marketing department.
- Time-bound: Six blogs will be written and published by October 1.
Rocks: Making Our Individual Goals SMART
We set 90-day goals here at Ninety called Rocks and, yes, we make them SMART. We also split these Rocks into Milestones that can be delegated to individuals, leveraging everyone’s strengths toward the common cause of growing our organization.
We recommend that teams and individuals have no more than 3–5 Rocks or SMART goals per quarter so there's time to also focus on their day-to-day activities. This is what helps organizations continually play the infinite game, thinking well ahead and planning for goals and opportunities that may extend even beyond the tenure of their current leadership teams.
We share our company Rocks with everyone in the company. Doing so during quarterly State of the Company meetings helps align individual teams with the organization’s greater goals (hello, relevance). We also perform weekly check-ins on the progress of everyone’s Rocks, and when a Rock is not on track, we make it an Issue to Raise, Discuss, and Resolve. When you add all of this together, your organization is well on its way to crushing its goals.
Common Challenges of Setting SMART Goals
With all we’ve learned about SMART goals, it seems like a foolproof approach to success. But in business, of course, things don’t always move in a straight line. There are unexpected challenges we need to contend with, market swings we need to endure, and just basic human tendencies that might momentarily derail our best intentions.
Reaching our goals takes practice and patience. These are the things we want to watch out for as we’re learning the ropes:
- Don’t set too many goals. Keep the focus on a handful at a time, at most. Every goal is a building block to something bigger. It takes time.
- Beware of succumbing to too many distractions. This might result in failing to block time for analysis and measurement to ensure your goals are tracking appropriately.
- Stay committed to the process, and don’t overreact to early results that miss the mark.
- When setting goals, it’s okay to get out of your comfort zone. Yes, we’re aiming for achievable. But a little unconventional thinking or a bit of risk-taking isn’t necessarily a bad thing. Remember, failure is okay (in small doses).
- The first word is the most important: specific. So… don’t set vague goals.
Celebrate Your Success
We’d be remiss if we didn’t include the idea of celebrating when achieving goals. Think of all the work that goes into them: the conversations, meetings, refinement, all of it. This all leads to agreements to make those SMART goals in the first place. Applying the formula doesn’t guarantee success, so when teams, departments, or organizations reach their goals, be sure to celebrate.
Think of ways to publicly recognize and reward team members. Motivation and morale will remain consistently high and, what’s more, it will incentivize people to sharpen the approach each time, getting tighter on measurement or shorter on timelines, if achievable.
Celebrating the wins adds to the culture of an organization. And when that culture is thriving, there’s little to stop the momentum. It’s really a beautiful thing to see.
Set SMART Goals: Track and Achieve with Ninety
Don't let your business goals just be dreams: Make them a reality with Ninety. Experience the power of structured, SMART goal setting and drive your business to new heights. Begin your free trial with Ninety today and start turning your aspirations into achievements.
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