Today, businesses of all types across all sectors focus on effective strategic planning and goal setting than ever before. Although these processes might seem straightforward, a close look will give you a bigger picture of behind-the-scenes. Organizations around the globe dedicate much time and resources to goal-based strategic planning as they determine the firm’s future, liquidity, and success. In the post, we will cover the concepts of SMART goals, their examples, and a systematic guide for writing SMART goals for your organization.
Understanding the Concept of SMART Goals
The former director of corporate planning for Washington Power Company, George T. Doran, published a paper in 1981. There he stated SMART goals as a tool to create criteria to help improve the chances of accomplishing a goal. SMART is an acronym for Specific, measurable, Achievable, Relevant, and Time-bound. The acronym eliminates generalization and guesswork, setting the base for tracking organizational progress and identifying missed deadlines. When we define these five parameters, managers and organizational leaders ensure that our team will attain the objectives within a stipulated timeframe.
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Examples of SMART Goals
You can refer to some corporate examples that adopted the SMART goals to change their influence on the environment and improve diversity and inclusion.
The organization uses SMART goals to reduce its impact on the planet. Amongst the goals, you might come across the following:
- Reduction in absolute emissions from McDonald’s offices and restaurants by 36% by 2030, with 2015 as the baseline.
- It experienced a 31% reduction in supply chain emissions by 2030, using 2015 as the baseline.
- It will source 100% of its guest packaging from renewable, recyclable, and certified sources by 2025.
Using SMART goals, IBM committed to reducing greenhouse gas emissions and becoming more energy efficient. A few goals followed by the organization include:
- Reducing approximately 65% of greenhouse gas emissions by 2025. It made 2010 the base year with adjustments for acquisitions and divestitures.
- Implement 3,000 energy conservation projects to reduce 275,000 megawatt hours between 2021 and 2025.
- Using renewable energy for 75% of their electricity consumption worldwide by 2025 and 90% by 2030.
- Improve their efficiency of average data center cooling by 20% by 2025.
- Achieve net-zero greenhouse gas emissions by 2030 with less than 350,000 metric tons of CO2 residual emissions.
The organization’s SMART goals focus on its employment diversity and inclusion initiatives. Besides the current progress, the company’s SMART goals include the following:
- Their global workforce must include at least 40% women or non-binary employees by the end of 2026.
- Include workforce across various ethnic groups, including the Indigenous, Black, Latin, and multiracial employees, by 50% by the end of 2023.
The famous food company Nestle laid its SMART goal for sustainability initiatives to reduce the organization’s impact on global resources. Some of its upcoming goals include:
- Reduction in emissions by 20% by 2025. Besides, the organization’s goal is to reach net zero by 2050, with 2018 as the baseline.
- Using a deforestation-free primary supply chain for all their products by 2025.
- Using reusable and recycled packaging materials by 2025.
- Planting of 200 million trees by 2030.
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Steps to Create Smart Goals
We all know that SMART goals address various job responsibilities, especially an organization’s everyday activities. Your organization requires SMART goals to redirect its resources and attention towards the most critical aspects of its operation, thereby achieving its priorities. What do SMART goals cover? It includes different organizational and personal objectives, development, and manufacturing, improving, saving resources, expenses, revenue and time.
When setting the scope of your organization’s SMART goal, follow the three-step process to meet the business goals. These include:
- Defining the various job aspects, broad areas of responsibilities, and the results for which the business entity is responsible.
- Developing a goal statement for each area of responsibility, focusing on the results and not the means to achieve them.
- Ensuring the priority of your goals, encompassing the core outcomes instead of particular tasks.
Most often, organizations make general goals instead of SMART goals. Do you know the difference between general goals and SMART goals? Well, organizations have a lower chance of accomplishing general goals when compared to SMART goals.
You can use the following objectives to work through each component of SMART goals.
Remember, SMART goals are always specific and offer meticulous details to eliminate a general goal’s indecision.
They answer the famous ‘W’ questions, including
- What does your business want to achieve? It includes the steps required to increase the profit.
- Where will the process take place?
- Who is participating in the process?
- Why will the entity pursue the goal?
Remember, not all specific goals answer all the questions.
Your specific goal must not lack proper metrics. When you set metrics, it determines whether a business can attain its goal. Besides, tracking the goal makes it tangible, which translates to numbers or customer-employee satisfaction.
A measurable goal answers the following questions:
- How many resources or time an organization requires?
- How to determine when the organization achieves its goal?
- How many team members are working, and for how many days?
It is the point when you give yourself a serious reality check. Remember, your goals must be realistic, not pedestals from which you inevitably tumble. Before setting the goal, ask yourself the following:
- Can my team accomplish the goal?
- If you plan to boost the profit in a year by 15%, will your business achieve the same within the predetermined time?
- The reality of the niche and if there is a demand for your products and services.
Determining these factors is essential, as your business might require stretching its abilities, developing new skills, changing attitudes, and identifying previously overlooked opportunities. Ensure that your team and other employees must be able to achieve the set goals and must be able to offer alternatives if the goal turns out to be too optimistic.
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Ensure that every statement of your SMART goal must be consistent and make sense within the broader image and business mission. All the departments of your organization must align with each other. If your SMART goal is relevant, it must answer the following questions:
- Is the idea worthwhile?
- Does your goal align with your organization’s direction?
- Are other departments participating in achieving the goal?
Are you trying to measure the success accurately? If so, determine if you and your employees are on the same page when you reach the goal. When you set a timeline, you will rarely overlook the importance of a goal. On the other hand, without a proper timeline, your organization can easily commit to the daily activities or occurring crises and forget about the priority.
SMART goals are an effective tool for your organization that help it boost its efficiency and profitability. When you set SMART goals, you gain a clear direction to the long-term goals, progress and start prioritizing the critical aspects for the success of your organization.