In this article, we’ll define the SMART goal setting approach, explain how to use SMART goals, and provide practical examples. Interwoven in the examples will be the best practices in implementing the protocol. We’ll also introduce the concept of using SMART goals in an OKR (Objectives and Key Results) methodology and detail the similarities of the frameworks.
A Brief History & Definition of S.M.A.R.T. Goals
The SMART method was first introduced in the November 1981 issue of Management Review in a paper authored by George T. Doran titled, “There’s a S.M.A.R.T. Way to Write Management Goals and Objectives.”
SMART is an acronym that sets the criteria for setting goals and objectives. The SMART approach, which stands for Specific, Measurable, Attainable, (sometimes referred to as Aligned), Relevant, and Time-Bound, is used to develop goals that are concrete and geared towards execution in a defined period.
S. Specific, provides a clear description of what needs to be accomplished
M. Measurable, provides a metric, or number, that identifies when the objective has been achieved
A. Attainable, the objective must be achievable, within the timeframe and resources allocated
R. Relevant, meaningful, significant, and aligned with corporate priorities
T. Time-bound, the objective must be concluded by a specific date, scoring occurs at this time to determine if the objective has been achieved.
SMART Goals Example – Company Level
We will increase recurring revenue by 25% in 2019, exceeding our 2018 performance by acquiring additional new customers and reducing churn, which will improve overall corporate profitability, we will do so by hitting established targets each quarter throughout the year.
- Specific: Increase Recurring Revenue in 2019
- Measurable: Achieve a 25% Increase Versus Year Ago
- Attainable: Improve upon 2018 performance of 15% increase through new customers and reduced churn
- Relevant: Revenue is the engine that drives our profitability
- Time-Bound: Set specific numerical targets for each quarter in 2019
SMART Goals Example – People Operations
Improve the bench strength of the Sales and Marketing departments, by reducing turnover of top performers in each discipline to no more than 10% annually, and onboarding at least three new talents each quarter, within the allocated budget, as this will improve the overall performance of these two key disciplines which drive our sales and profitability, as measured by retention and recruiting metrics each quarter.
- Specific: Improve the bench strength of the Sales and Marketing departments
- Measurable: Reduce turnover to less than 10% and recruit and hire at least three positions each quarter
- Attainable: Salary and recruiting budgets are adequate to achieve these targets
- Relevant: Sales and Marketing are key drivers to the company’s revenue and profitability
- Time-Bound: A mix of quarterly and annual objectives
SMART Goals Example – Customer Success Department
Improve customer service to delight our current customers, by improving the user experience and reducing response times, as measured by our NPS score, improving the NPS from 95 to 98, this will reduce customer churn and improve our reputation in the industry, as measured by quarterly response time and NPS metrics.
- Specific: Improve customer service and the user experience
- Measurable: Respond to all tickets within twelve hours, and increase NPS score to 98
- Attainable: Response times and NPS score represent incremental improvement versus year-ago
- Relevant: Our customer’s experience will determine our ability to grow
- Time-Bound: As measured by quarterly metrics for response times and NPS scores
And now, read on, and you’ll see how OKRs encompass elements from SMART goals. SMART Goals and OKRs – Similarities in the Frameworks
Both frameworks provide criteria and a methodology for developing goals, and both methods address each element of the SMART acronym.
In his book, “Measure What Matters,” author John Doerr tells us that OKRs (Objectives and Key Results) is a collaborative goal-setting protocol for companies, teams, and individuals.
The Objectives (Os), are WHAT is to be achieved. They should be significant, concrete and action-oriented. They represent the direction.
Key Results (KRs) benchmark and monitor HOW we get to the objective. KRs should be succinct, specific, and measurable. KRs typically include hard numbers.
These three words, Objectives and Key Results, encompass each of the criteria of SMART Goals:
- Objectives are Specific, answering What needs to be accomplished
- They are Attainable, yet inspirational, and in some cases aspirational. Google uses two types of Objectives which they refer to as Aspirational and Committed. Aspirational goals require more of a stretch by the organization and may need to be rolled from period to period before being accomplished
- Objectives are Relevant. They must be aligned with corporate priorities, moving the organization in the desired direction, often in support of the Mission or Vision Statements. Quarterly OKRs determine the focus of the entire organization and inform the work to bedone in the period
- Key Results are Measurable, they are typically metrics or numbers which define when the Objective is achieved
- Key Results are Time-Bound, the typical cadence in an OKR environment is quarterly. KRs are expected to be completed within the current quarter
Let’s Revisit the Company Level SMART Goal and Restate it as an OKR
Objective, (WHAT is to be achieved) … Increase Recurring Revenue by 25% in 2019
Key Results (HOW we get to the Objective)
Key Result 1. Generate ARR of $250k per quarter, $1 million in 2019
Key Result 2. Secure a net gain of at least five new customers per quarter nationally
Key Result 3. Hire three new Account Executives per quarter
As you can see the OKRs adhere to the SMART methodology:
Specific: Increase recurring revenue by 25%
Measurable: Generate ARR of $250k per quarter
Attainable: By securing the required number of new customers and aided by an increase in manpower the Objective should be achievable in the time frame specified.
Relevant: Revenues is still the engine that drives profitability
Time-Bound: Metrics; $250k in ARR, five new customers, and three new AE’s quarterly.
We hope these SMART Goals examples have helped you to understand SMART Goals and OKRs better. Do you manage a company or teams (either as a CEO, a senior executive, a middle manager or even a front-line manager)? Do you set and track objectives? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!