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We all know that nothing works without a plan, and a plan cannot be executed without having its goals set.

That goes for any type of plan, be it business or personal finance, college degrees or NGO programs, website promotion, or weight loss.

Setting goals and milestones is vitally important to any planning activity and is at the core of its success or failure.

Knowing how to set objectives is not exactly rocket science in terms of complexity, but any strategist must know the basic rules of how to formulate and propose objectives. We will see in this article why objectives play such an important role in the planning and strategic activities of a company, how they influence all business processes and we will review some guidelines for setting objectives.

The importance of setting goals

One might wonder why we need to set goals in the first place, why not let the company or a specific activity run smoothly in the future and see where it gets. That would be the case only if we don’t really care whether the activity under discussion will be successful or not: but then, to use a popular saying, “if something deserves to be done, then it deserves to be done well.” In other words, if we are not interested in the results, we should not continue the action at all.

Setting goals before taking any action is the only right thing to do, for several reasons:

– gives a goal to aim for, therefore all actions and efforts will be focused on reaching the goal rather than being used ineffectively;

– gives participants a sense of direction, an idea of ​​where they are going;

– motivates leaders and their teams, as it is quite common to establish some kind of reward once the team has successfully completed a project;

– offers support to evaluate the success of an action or project.

The 5 Rules of Goal Setting: Be SMART!

I’m sure most managers and leaders know what SMART means, well, at least when it comes to setting goals. However, I have seen some of them who cannot fully explain the five characteristics of a well-established goal – things are somewhat fuzzy and confused in their minds. Since they cannot explain in detail what SMART objectives really are, it is highly doubtful that they can always formulate them.

It is not yet clear where the confusion is coming from: perhaps there are too many sources of information, each with a slightly different focus on what a SMART goal really is; Or maybe most people only “heard” briefly about this and never quite reach for the substance behind the packaging.

Either way, let’s try to figure out the meaning of the acronym SMART and see how we can formulate efficient goals.

SMART illustrates the 5 characteristics of an efficient goal; what represents Sspecific – SUBWAYeasurable – FORttainable – Rlifting up – Timmensely.

1. Be SPECIFIC!

When it comes to business planning, “specific” illustrates a situation that is easily identified and understood. It is usually linked to some mathematical determinant that prints a specific character to a certain action: the most common determinants are numbers, ratios and fractions, percentages, frequencies. In this case, being “specific” means being “precise.”

Example– When you tell your team “I need this report in multiple copies,” you didn’t give the team a specific instruction. It is not clear what the determinant “several” means: for some it may be three, for some it may be one hundred. A much better instruction would sound like “I need this report in 5 copies” – your team will know exactly what to expect and have less chance of failing to deliver the desired result.

2. BE MEASURABLE!

When we say that an objective, a goal, must be measurable, we mean that there is a strict need to have the possibility to measure, to track the actions associated with the given objective.

We must establish a different system or establish clear procedures for how actions will be monitored, measured and recorded. If an objective and the corresponding actions cannot be quantified, the objective is most likely poorly formulated and we should reconsider it.

Example: “our business must grow” is an obscure and non-measurable goal. What exactly must we measure to know if the objective has been met? But if we change it to “our business must grow in sales volume by 20%”, we have a measurable goal: the measure is the percentage of increase in sales from now to the given time in the future. We can calculate this very easily, based on the recorded sales figures.

3. Be affordable!

Some use the term “achievable” instead of “achievable”, which you will see is simply a synonym and we should not get bogged down in analyzing which one is correct. Both are.

It is understood that each leader will want his company / unit to provide outstanding performance; This is the spirit of competition and that way of thinking is sorely needed. However, when setting goals, you must first thoroughly analyze the factors that determine the success or failure of these goals. Think about your team, your capabilities, your motivation: are they enough for the objectives to be met? Do you have the means and capabilities to achieve them?

Think about it and be honest and realistic with yourself: are you really capable of achieving the goals you have set for yourself or is it very likely that you are heading for disappointment? Always set goals that have a fair chance of being met – of course they don’t need to be “easily” achieved, you have the right to set tough goals as long as they are realistic and not futile.

Example– You own a newborn mover and set a goal to “become the # 1 mover in the state.” The problem is that it only has 3 trucks available, while all of its competitors have 10 and more. Your goal is not achievable; instead, try a more realistic one, like “get to the top 5 fastest growing companies in the state.”

4. Be RELEVANT!

This notion is a little more difficult to perceive in all its meaning; therefore, we will start to explain it using an example first.

Imagine going to the IT department and telling them that they need to increase the ratio of earnings to income by 5%. They’ll probably look at you in awe and mumble something unremarkable about managers and how they mess up people’s minds.

Can you tell what is wrong with the above goal? Of course! The IT department has no idea what you were talking about and there is nothing they can do about it; their job is to develop and maintain their computerized infrastructure, not to understand their economic discourse. What you can do is set a goal that the IT department can have an impact on that will eventually lead to the increase you wanted in the first place. How about asking them to reduce hardware and software expenses by 10% per month and to be more cautious with consumables within their department by not exceeding the allocated budget? They will surely understand what to do because the goal is relevant to their group.

Therefore, the quality of a goal as “relevant” refers to setting appropriate goals for a given individual or team: you need to think about whether they can really do something about it or whether it is irrelevant to the work they do.

5. Be TIMELY!

There is not much to discuss on this aspect, as it is probably the easiest to understand and apply.

Any usable and achievable goal should have a clear time frame of when it should start and / or when it should end. Without having a specified deadline, it is practically impossible to say whether the objective is met or not.

For exampleIf you just say “we need to increase profits by 500,000 units”, you can never know if the goal was achieved or not, you can always say “well, we will do it next year”. Instead, if you say “we need to increase profits by 500,000 units 6 months from now”, anyone can see in 6 months whether the goal was reached or not. Without a clear and defined time frame, no goal is good.

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