Setting clear goals for your company is a key business performance strategy. They should serve as the foundation of your original business plan and the compass for your organization as it moves forward. The most effective goals create clarity of purpose and outline objectives to strive for. To set the right goals for your company, use SMART, a powerful mnemonic for Specific, Measurable, Agreed upon, Realistic, and Time-bound.
To be practical, business goals must be clearly defined. The easiest way to make them specific is by answering the basics of “how”, “who”, “what”, “when”, “where” and “why”.
Making a business goal measurable means including a specific number ¿whether it’s a dollar amount, a percentage, or another form of measurement ¿on what you hope to accomplish. Use questions like “how much?” or “how many?” to set a measurable business goal. Developing metrics around a goal helps you understand your progress and communicate your performance.
3. Agreed Upon
To execute your overall business performance strategy, many people in your organization will be required to pull in the same direction. That's why it's important for priorities to be agreed upon beforehand. Getting team members to understand and work toward your goals helps create strategic clarity.
Business goals must be attainable in terms of your abilities and financial situation. While “increase profits by 300 percent in two months” is a wonderful aspiration, if it is not realistic it will not be a helpful goal. Likewise, make sure business goals that you’re setting fit your budget. If you can’t dedicate the requisite resources to the goal, you may want to reconsider if it is the right one.
Business goals must be tied to a defined schedule. A goal isn’t effective if there is no “end date” by which it must be achieved. Set a date for when each milestone can be realistically achieved, or a timeframe during which you want to actively pursue a goal.
Long-term vs. Short-term Goals
Long-term goals should reflect your overall business performance strategy and set the direction your company should move. Keep in mind that too many long-term goals can cause a lack of focus, so keep them limited. Additionally, break down long-term goals into a series of shorter-term goals to provide clearer direction, motivate employee performance, and gauge whether progress is on track.
Short-term goals should be clear and specific so that all employees clearly understand objectives and priorities and everyone is on the same page. Short-term goals should also help harness employee enthusiasm and energy by encouraging timely deadlines and key milestones to stay on track toward long-term goals. Both long-term and short-term goals should be easy to understand and communicate to employees.
No matter how SMART your business goals are, they are useless if their success isn’t being evaluated. Revisit your goals regularly and assess objectives are being met in the time frame outlined. Additionally, look to see if your goal setting is motivating the appropriate employee responses and behaviors, the right types of initiatives and activities, and most importantly, moving the company toward your vision for the future.
Mark Allen joined Insperity in 2006 as vice president of strategic planning. Prior to joining Insperity, Allen held various roles with SunTrust Robinson Humphrey, last serving the Business Services group as managing director, investment banking. He earned a bachelor’s degree in electrical engineering and a master’s degree in management science from the Georgia Institute of Technology. Allen is also a Chartered Financial Analyst.