How to Create Smart Goals and Smart KPIsposted on 20-3-16-Mon 23:09
Every business has a vision. In this case, a good vision refers to where the business wishes to see itself in a few years. You will hear of statements such as, “To be a Premier Professional Services Company.” All the efforts of the business are, therefore, geared towards attaining such a milestone. However, you can quantify vision. To achieve the vision, the company needs to start with a goal. Any good business goals must be SMART goals , which we wish to shed some light about today.
A Smart Goal
When a goal is SMART, it sticks to a particular criterion that makes it possible to achieve. A SMART goal is specific, measurable, attainable, relevant, and time bound. The big question is, "how do you turn your obvious goals into SMART goals?" The answers to that are as below:
1. Make the goal specific
It is hard to attain something which you do not have a clear picture of what it looks like. Therefore, you need to make the goal very specific. The idea is that you have it clear in your head, and thus make it easy to avoid the challenges you may face to attain it. You can turn your general goal into a more specific goal you could work on.
The first step is to be aware that a specific goal gives answers to the questions of what, who, and how. These questions involve what requires achievement, who will be involved in its achievement and how it can be achieved. This simple path can get you a more specific goal.
A specific goal encapsulates the goal itself, a parameter that shows its attainment and the actions that make it possible to achieve the goal. An example of a quite specific goal will be, “increase the number of organic visits to my company profile.”
2. Make the goal measurable
Besides the goal being clear, you need to be precise about the quantity, even better, have a rough estimate of what you wish to achieve. One thing with numbers is that they tend to motivate. Think of your time in school and how it felt to attain a targeted mark. The same applies to business. Ultimately, you will start with setting up a goal and the moment it is quantifiable it will give the pressure to achieve it and above or closer to attaining it. There are steps you can take to make your goal more measurable.
The first step is to avoid making goals to be about actions but about whether their attainment will make a difference. The grammar in writing measurable boils down to five techniques. Foremost, the noun in question, be it the business, the enterprise, or the team in your goal statement, is the subject of your goal. It could be customer support, product delivery, among other things.
The adjective in your statement is the impact of your goal. Usually, it will come in the form of something you can see. Some of the things one could see include precision, loyalty, and accessibility. Thirdly, the verb or adverb in your goal statement needs to be outcome-oriented rather than project or milestone oriented. Use words such to implement, to accomplish, to complete, to obtain, and to establish, and many more. Lastly, any conjunctions or commas used to demonstrate that there is more than one goal.
Therefore, a measurable goal needs to be a combination of a noun (subject), a linking verb (outcome-oriented goal), and a verb or adverb phrase. The measurable goal will be something like “department to develop swift service delivery .”
3. Make the goal attainable
It is not always good to set yourself up for failure. Any time you set a goal make, even as you try to be more ambitious, consider whether it is achievable. The first step is by being more logical about your goals. For example, you may say you want to be a real estate magnate just like that. However, this is big, and you need to start with something like, "to buy a prime plot of land in the next two years." Later you may say, "To build a house on the land every one year." This is more achievable approach to your goals. The trick in this plan is to make the big goal reasonable by simply breaking it down into manageable bits.
Secondly, be inspired to attain your goal. If you want to be good at anything, you need to have the right people and attitude around you. You could have something like a vision board for that particular goal. In the vision board, have the various phases of attaining the ultimate goal. Start small, crossing the first step will push you to the second and on to the third and over to the last.
4. Make the goal relevant
The procedure of coming up with a goal for your enterprise has to be intentional. It is necessary to have a connection between the target and your business. Share that connection with your team or champions of the goal so that they know it and know why it will be essential to attain it. Relevance will be in the form of "to establish more responsive customer support." This will increase customer loyalty. Further, this may lead to more sales and a premier professional service company in the industry. The relevance that, indeed, one effort within the organization will lead to an impact that will result in the ultimate vision of the enterprise.
5. Make the goal time bound
Any goal can appear good, but it becomes meaningless when you do not have a time limit set for it. Time creates a distinct sense of urgency in people involved in attaining a goal. Look at the iconic infrastructural projects of the world that people thought will be impossible. One thing is for sure that those involved paid attention to the gapped timelines. Somewhere halfway the project, the team will assess how far they have come. The team enjoys this small win, some take a short break, come back rejuvenated and get back to work right more energetic.
Assessment of your progress is significant. You need to be sure that the steps you keep taking allow are doing the magic for your business. For this reason, you need your KPIs to track your achievement against the goals set. Your best options will, therefore, be to start with SMART KPIs.
What Are SMART KPIs?
Just like SMART goals, a SMART KPI are specific, measurable, attainable, relevant, and time bound. Here, we will bring to your focus the distinct techniques you can use to make your KPI smart.
In the case of specific, you need to ensure that a KPI represents one parameter. Being specific about your KPI allows you only to measure one item. This approach can make your measurement easier and more accurate.
Secondly, on the measurable KPI, you need to ensure that your KPI is quantifiable. Therefore, any time someone measures a particular metric, they will get both qualitative and quantitative outcomes. Qualitative outcomes offer your detailed recommendations in a non-numerical form. Quantitative outcomes are in a numerical form. Combining these two elements allows you to make the required changes to key improvement areas.
Attainable KPIs are realistic. When realistic, this means that even when ambitious, a big enough KPI can be split into smaller metrics making it easy to attain the ultimate KPI . Moreover, the KPI needs to be relevant , which means it has to align with your needs and those of your enterprise. Therefore, if you need to use a KPI used somewhere else, you will need to reshape it to fit into the structure of your business.
Lastly, a KPI needs to be time bound . It is wise to time your assessments. The big question is in deciding the intervals of your business. Then you may consider a weekly evaluation. It could go to a week, a month, a year, bi-annually and quarterly.
Smart goals motivate the development of better KPIs. Now that you have succeeded in even coming up with KPIs, you may wonder how the two may relate. One thing you should know is that KPIs will track performance against the goals you set. If you are asking yourself how that can be possible, here is how:
1. Understand the difference between goals and KPIs
It is a common mistake for most people to use goals and KPIs as synonyms and to use one for the other occasionally. It may be understandable for a customer to think of them as the same, but as a business owner, the difference needs to be clear to you. Goals are estimates of what business would wish to attain in the future.
The definition, however, changes when it comes to KPIs. For KPIs, these are items used to calculate the performance of your business. The figure is arrived at by comparing the achievement to the goal set previously .
The difference is clear, there is always a vision, the vision leads to the goals of the enterprise, which will come down to objectives, and later KPIs. KPIs will drive you towards the attainment of the set goals. Your goals need to be carefully arrived at so that they can result in better results on your KPI dashboard.
2. Ensure your goals are smart
The process of arriving at a particular result when measuring performance should not be complicated. You need to be aware that if you set unclear goals, it will be hard for you to track your performance. Moreover, when your goals are not clear, the team that could help you achieve them will find it hard to understand them. Furthermore, if you go through all these processes without you or your employees noticing that you got it wrong with your goals, then you may end implementing the wrong amends to the wrong mistakes. This means that any efforts to improve your performance will not work.
A smart goal is also measurable, which makes it more a motivating factor. Moreover, by looking at the number, it becomes clear to the one mandated with the goal whether it is a manageable figure. Furthermore, a number gives meaning to the efforts your organization may put to attaining the goal.
A smart goal is not only attainable. It stands to be acceptable, assignable, actionable, and appropriate. The smart goal is relevant, meaning that people can resonate with it because it focuses on the things that matter to the organization. Lastly, to some urgency, a smart goal is time bound.
3. Choose the right metrics
For every goal you set, their standard for measuring it is a KPI. A KPI is specific but comes with several underlying metrics. The metric sources for data that are later analyzed to result in a better performance. The parameter is totally specific and might point you directly to that issue your business faces. For instance, if you are doing an email campaign for your online business, the KPI may include the conversion rates.
Under the conversion rates, there are multiple metrics, such as the email open rates and click-through rates. Therefore, your measurement of goals with KPI will start here.
4. Be Practical in Naming KPIs
Remember that what may be understandable to you may not be as understandable for someone else with access to your KPI dashboard. The plan is, therefore, to make sure that you make the naming of your KPI engaging. For instance, if you are talking about your company social media page followers instead of going with this long-form, why not choose something like "audience awaiting interaction.” The idea is to get your stakeholders warmed up about what the KPI means for the business. If you are to measure the KPI or read it as an employee, you will find the KPI creates some sense of action.
5. Check-In With Metrics Against the KPIs
Remember that we talked about goals motivating the development of KPIs. KPIs will focus on the goal to arrive at the performance of the company and recommend solutions. One way to measure performance is to have a system that checks in against the performance indicators. Use nothing other than the metrics you selected for each KPI. Besides, your results should give you what the KPI metrics are asking for. As a business owner, once you put aside the KPI dashboards, your focus will be in working on improving those metrics.
6. Response Plan Must Relate To Performance Indicators
Knowing your performance is not enough if it does not help you attain your goals. When doing your calculations, relating KPIs and arriving at certain actionable conclusions, it is wise to ensure that the steps you take are relevant. Remember that the role of the indicator is to point you directly at the issues that require resolving. These steps, moreover, make your decision-making process easy. Aligning KPIs with solutions directly affects the metrics involved and makes it easy for those to support your goals to stay on the right path.
Now that you know how to measure the performance of your organization using KPIs against goals, it is important to understand that a goal as easy as it may seem may be a challenge to achieve. Several techniques can help achieve your SMART goals:
- Ensure goal adheres to your value system - There needs to be a connection between your interior being and the goal set. It may be hard to do something that does not agree with the kind of person you are. The idea is for you to be self-motivated by the goal itself. If your values are at stake, then even by achieving the goal, you may not feel delighted. Therefore, again, make sure the goal means something to you.
- Share the goal - This is an optional choice for you. Moreover, you need to be particular about the people you share the goal with. The reason is that they may be just the force you need to attain that milestone. Furthermore, you may have a goal, but some aspects of it you cannot handle on your own. These aspects could be someone else's passion, and sharing the goal this with someone else may crack the goal wide open for you.
- Put the right resources together - Three important resources need to be in place, namely time, funds, and effort. For the time, you need to have a plan set up about when to start working on your goals. You also need to have a budget set aside for that particular goal. If you are doing a social media campaign, you may need to invest in social media tools. In the case of effort, you may need people to help you with the SMART goal. You may want to start by delegating specific duties to them.
- Reduce obstacles - Remember that the goal is important to your organization and that you are on a timeline. Constraints are normal in business, but they are not an excuse. You need to be able to handle them in any event they come. Part of the plan is to do an early study of challenges that may arise in the event you decide to work on the goal. Doing this will allow you to proactively tackle any instances that may surface and speed up the process of attaining your goal.
- Close an objective each day - To attain a bigger goal, you may need to split your goal into small objectives. Divide these objectives over the available number of days. Do not hurry, just have reasonable time set aside for your goals so that each day you make a significant step towards attaining the ultimate goal. Attaining a bit of the objective daily and recognizing that you did it can be encouraging. Besides, finishing a day having not made a significant step can erode the morale of your team. Let every day start with a new task because this can be quite refreshing to yourself and others.
- Have a system of support - Attaining any goal requires some level of motivation. Occasionally, your spirits may go down because of the hurdles of business. You need someone, a place, or something to hold on to every time you are less motivated. You could have a mentor, someone who has been in your industry for a long time. This person will always light up your heart and mind every time you are downbeat. Moreover, they could have faced the challenge in the past and survived it. This approach allows you to remain resilient to the end of the project.
- Celebrate Small Wins - Set up different parts of the projects to celebrate a win. Sometimes your team may work on your goal for a long time and will experience lower levels of morale. A party at every quarter or half of the project can help them get their heads of the project for some time before embarking more fresh and energetic. Besides, your team deserves a break from work and a time for themselves too.
- Track your progress - Above, we have talked about KPIs and their role in tracking performance. Tracking your progress is the backbone of attaining your goal. You need to know you are on your way to the goal or off the goal. Tracking your progress also allows you to speed up the process when slow and slow down when fast.
There is more you can still do to attain SMART goals. You just need to choose the ones that work for you and move towards a positive result for your company.
A good company must have a vision that is achievable through particular goals. Moreover, the company needs to be able to assess its progress occasionally with the help of key performance indicators. Goals need to be SMART; furthermore, the KPIs also need to SMART. Finding a connection between these two items and learn how to use them to the organization’s advantage can turbocharge the performance of the organization. It all starts with a simple goal, then a KPI; therefore, start now!