Goal Setting Using the SMART Principle – How to Make it Work
By Russ Moran
Goals are Dreams Written Down
I don’t know who came up with the SMART acronym for goal setting, but he or she was brilliant. It forms a basis for any step toward setting goals and should be adhered to. Here is what the SMART principle holds. A goal should be the following:
Specific: Define your goal in exact language. This is where you turn a dream into a goal, as will be discussed shortly. This is the mental space that you begin to populate with the tangible stuff. “I will open a new branch within 10 miles” beats “I will expand.”
Measurable: Set forth your goals and their intermediate benchmarks in a way that can be actually measured, both at the end and at every step of the way. The measurement could be dollars, mailing pieces sent, appointments, sales closed, or new clients signed up. Most organizations involved in direct sales have statistics breaking down each part of the sales process. For example, the statistics may show that for every 50 calls you make, you will get three appointments. For every three appointments, the statistics show that you will close one sale. The average commission on a closed sale is $1,200. Therefore, every call is worth $24 ($1,200 divided by 50)—just for making the call. Want $24? Pick up the phone.
Achievable: Is it possible to reach your goal within the set period, given the resources that you will need? Don’t hope that something will show up; make sure you have the resources, or at least access to the resources to make the goal achievable. “I will renovate 100 new kitchens within six months.” Well, that’s very exciting, but you’d better have a contact list filled with subcontractors who have nothing else to do in the next half year. An unachievable goal will only lead to frustration; that will turn you off on the whole goal-setting process.
Realistic: Is your goal based on reality, or is it a fantasy? An unrealistic goal is unlikely to be met and can only lead to your disappointment. If it’s realistic, you can form a mental picture of your goal. Once you have that mental picture, a picture you can really be a part of, your goal will have a real life. A week after opening your doors, I don’t suggest that your goal setting include “I will be bigger than Microsoft within a year.”
Timed: It is crucial to place a time limit for achieving a goal; otherwise, it remains a dream. Timed goals lend themselves to charts, especially bar charts. Think of hospital fundraising campaigns, which are often accompanied by a big bar chart right by the entrance. Every week or month, or whatever period is appropriate, you can gauge the progress. This is one of the fun parts of business. I love working with Excel. I mastered it enough to know how to do all kinds of charts based on the underlying numbers. Many people think of a spreadsheet as a tool for showing them what has happened. Open your mind to it as a tool for charting the future—for goal setting. If you don’t know how to use Excel, you should consider taking a course. It will be worth your time and money.
Most business writers and consultants, myself included, would add one other element to the list: your goal should be challenging. It may not fit nicely into the acronym, but it is essential. Suppose, for example, you are a real estate broker, and you sell an average of two houses per month at an average price of $250,000 ($6 million gross sales per year), and you set forth a goal of increasing your house sales by three per year. This is obviously S pecific, M easurable, A chievable, Realistic, and T imed, but so what? There is nothing challenging or exciting about the goal. How about one additional sale per month, or twelve per year? This would bring your gross sales up to $9 million. Remember, for goals to be meaningful, they must be dream-based. Realistic, yes, but also exciting. Yes, I know that as I am writing this, we are in a horrible real estate slump. But working through the SMART principle of goal setting and adding the word challenging, will get you to your goal faster than by bitching about the market to the folks at the diner.
Goals and Dreams Are For Life, Not Just For Business
As you begin your goal-setting adventure, you should organize goals into categories. The number of categories is limited only by your own imagination, but I suggest that you start with just a few. Here are my recommendations in alphabetical order:
Financial Goals (personal)
Turning Dreams into Goals
Dreams are great. Without them you are really not in the game of living up to your potential. But dreams are fuzzy; they have no sharp edges and can meander into mental mush. Remember Helzel’s book, Goals are Dreams with a Deadline ? Try the following exercise, which is closely tied to the Specific part of the SMART principle. On the left-hand side of a piece of paper, list your dreams, broken down by category. On the right-hand side, turn that dream into a goal by making itSpecific.
Dream: To write a business plan. Goal: I will investigate business planning software and begin the plan no later than one week from this Friday.
Dream: To build a successful business. Goal: To achieve $5 million in revenues and $1 million in net profits by December 2014.
Dream: To own my own office building someday. Goal: I will purchase a four thousand-square-foot building within 10 miles by July 2013.
Dream: I need a better filing system. Goal: I will research different filing systems and decide by next Tuesday.
Dream: To spend more vacation time with my family. Goal: To purchase a vacation house within 100 miles in the next 12 months.
Dream: To have family projects that we can all enjoy. Goal: With my family’s input, I will come up with a list of 12 monthly projects by February 2012.
Dream: To build a retirement nest egg. Goal: To accumulate $3 million in liquid assets by age 65 (break this down to monthly or at least annual amounts).
Dream: To be debt free. Goal: Meet with my financial planner and develop a plan to be debt free within 10 years.
Dream: To be a really good golfer. Goal: To knock 10 points off my game in the next year by practicing daily for one hour and taking monthly refresher lessons.
Dream: To learn to enjoy fishing. Goal: I will research and decide on an instructor or group that will teach me how to fish by November 1 of this year.
Dream: To clean my messy desk. Goal:I will attack my desk tomorrow afternoon at 1 PM.
Dream: To learn how to dock my boat. Goal: I will research books and videos on boat docking and decide on course of action by tomorrow at 3 PM.
Dream: To give more to charity. Goal: I will donate $5,000 to my five favorite charities by 2013.
Dream: I would like to help combat illiteracy. Goal: I will contact local literacy groups and become a literacy volunteer within 60 days from now.
Goal setting is fun. You might have 10 or more dreams for each of the above categories. How about setting a goal right now? When will you schedule your first dream-to-goal conversion session?