SMART goals in project planning and performance management

Developed by Patrick Grimm

Effective goal setting can encounter many obstacles such as lacking organisational capabilities or resistance to change, e.g. due to individual anxiety. Facing the importance of goals for the overall organisational performance in a dynamic business environment, the development of an appropriate goal setting technique is evident. Initially created by George T. Doran in the Management Review, the SMART goals can be classified as an effective goal setting technique. The acronym SMART stands for: Specific, Measurable, Achievable, Relevant, Time bound.

Being in line with the purpose perspective of projects, this goal setting method is not only applicable in professional projects, but also in any project of private nature. It can be applied throughout the project management process. Using this tool allows to generate success substantially related to its original efforts, which is of high value for any project manager. While many interpretations of the acronym exist, the tool has a great level of awareness due to its easy applicability and positive attributes such as high commitment and fast work pace. The combinability with other methodologies like Gantt charts or the flexible application regardless of the company's size are another reason for its popularity. A further investigation regarding human based limitations using the tool on the one hand and tool-specific limits one the other hand will be conducted. It is set in comparison to similar tools such as Cascading goals and Using Percentage Weights and an outlook of the extended SMARTER version is illustrated. Understanding its possible advantages and the ability to apply it using a guidance with case studies allow a valid conclusion about its value in the context of the project planning and performance management.

Introduction to goal setting

Starting in the 1960's with the studies conducted in the area of organisational performance, Dr. Edwin Locke established 1968 the conclusion that setting goals results in great organisational performance. Followed by George T. Doran in the Management Review, the study extended to the recognition that unclear goal settings in companies hindered a continuous progress within the organisation.

As stated in the Standard for Project Management, goals are defined outcomes and benefits specifying the expected result of a project. They can be short term and long term, and are translated from an overall vision. Hence, goals are set after the scope of a project, program or portfolio has been developed and are further described in the planning phase, the 2nd stage of the project management process. Developing the right goals represents a crucial part in project management as it affects the entire project. Thus, it can require a great amount of time of the complete project time frame. Goals are used throughout the project management process to track achievements and to measure the performance, which are important in the Program Governance process. Next to the performance evaluation of the proposed goals, goals create a direction which allows to be followed throughout the phases of any project management process. As any managerial task such as a planning process is accompanied by uncertainties that can lead to ambiguity and fallacy, an effective way of setting achievable goals is absolutely essential to mitigate negative outcomes.

Next to the findings of Doran and the Standard for Project Management, further experimental research accomplished proves that setting goals increases both motivation of the affected, achievements and success rates in different areas. Lastly, it provides accountability for the completion of a project.

Big Idea SMART goals and benefits

Due to the importance of an effective goal setting technique in the organisational performance management, Doran proposed the SMART goals which acronym stands for:

Specific, Measurable, Achievable, Relevant, Time bound.

Figure 1: SMART goals

Using this acronym, several variations evolved other time, such as:

• S for specific, significant, stretching

• M for measurable, meaningful, motivational

• A for achievable, attainable, agreed upon, acceptable, action-oriented

• R for relevant, realistic, reasonable, rewarding, results-oriented

• T for time bound, time based, timely, tangible, trackable

In the following just the first and most common variations are analysed that simultaneously represent the current state of the art.

Studies show that using a tool such as the SMART goals technique is valuable due to its requirement for specificity. Having specific or clear goals, respectively, increases persistence and self efficacy. Moreover, it reduces the influence of individual anxiety and eventually allows outperforming reference groups who did not apply a specific goal setting. The time constraint of SMART goals is also facilitating a fast work pace compared to undefined deadlines.

The easy applicability, its level of awareness combined with the positive resonance among users are another reason for the tool's success.

In the field of project management SMART goals generate a sense of discipline, structure and focus in the planning phase. Moreover, a higher rate of accomplishment compared to a vague goal setting is ensured, hence, a roadmap to success can be developed. This tool allows to generate success substantially related to its original efforts, which is of high value for any project manager. It reduces ambiguity and increases commitment in a managerial environment, and can be applied to any part of a company whether the project management or the entire company - regardless of the size of the organisation. It can be used to measure and to track project phases and results, and can be implemented in a great amount of methodologies such as Mind mapping, WBS, Gantt chart or Balanced scorecard. In terms of performance measurement, using SMART goals enables developing indicators to analyse the performance compared to its expected outcomes and thus enables feedback and learning. Lastly, an improvement of the team efficiency within a project team is another attitude.

Application: How to be SMART?

After the project scope has been defined, SMART goals are implemented. Thus, implementing it in the planning phase is the obvious choice. Because of its great scope of application possibilities, SMART goals can be utilised throughout the project management process. However, the main aspects of application in project management are planning, performance management and monitoring.

Before applying the tool on a specific case, three criteria need to be considered:

1. A clear linkage between set goals and the company's strategic goals is necessary to ensure commitment and motivation of affected employees.
2. Following a hierarchical and clear goal setting approach is essential, i.e. strategic goals have to be determined before any tactical or operational goal setting can happen. Establishing goals on an operational level with prior defined strategic goals can promote higher performance as an understanding of task achievements in comparison to company goals takes place.
3. The ability to create measurable goals is unalterable as it is substantial for generating performance measuring indicators to evaluate the success of the goals within the project.

Guidance

A typical application environment can be a workshop, more commonly used are simple Microsoft Excel Spreadsheets. Collecting all information on a spreadsheet or worksheet ensures full transparency and high commitment.

The following guidance along the acronym of SMART shows how to implement the tool using an example of a shoe manufacturer by answering the questions of the subcategories below.

Specific

The goals should be well-defined and precise to avoid any misinterpretation, keeping it simple is also important to increase people's understanding. Specificity increases the awareness of the goal and sets the requirements and next steps of the goal. Following W-questions could be asked to define this criteria.

Table 1: Specific

Question	Answer
What do I want?	Develop a more comfortable shoe
Why is it important?	To sustain on the market
Who is involved?	Marketing, R&D
Where is it located?	Northern Europe
Which resources?	Financial, human, patents

Measurable

It is important to develop at this stage measures to quantify the progress of the goal, such as indicators. The type of measuring as well as the desired measurement values are of interest. Tangibility of the goal is another aspect to consider.

Table 2: Measurable

Question	Answer
How do I measure (quality of shoes)?	Test results of prototypes, customer experience measured quantitatively with qualitative aspects - additional aspect: cost and price consideration essential

It represents a crucial part of the goal setting as it strongly influences the project flow. Trends show a numerical illustration is supportive to compare goal results - if necessary translating qualitative statements into numeric values needs to be considered.

Achievable

The feasibility of the goal is investigated, meaning that time, cost and resources are in focus. Moreover assigning the goals to responsible people ensures accountability.

Table 3: Achievable

Question	Answer
How can I attain the goal?	If necessary internal resources are available and market offers opportunity
How realistic, considering internal capabilities?	Financial, R&D, manufacturing resources are available

This corresponds to capabilities, where the difficulty is to determine goals that challenge, but not overcharge available capabilities.

Relevant

At this stage the goal needs to be evaluated considering its individual and organisational relevance. By answering the below questions positively the relevance of developed goals is taken into account.

Table 4: Relevant

Question	Answer
Is it worthwhile?	Yes
Is it the right moment?	Yes
Does it fit to my needs?	Yes
Are we the right company?	Yes
Does the current external circumstances allow it?	Yes

Moreover, it ensures higher commitment to achieve the goal if a clear relevance is identifiable. In case that the relevance of set goals is not given, the overall engagement during the goal achievement process can abate.

Time bound

Lastly, a timeline with deadlines and frequent status updates needs to be defined.

Table 5: Time bound

Question	Answer
When are the deadlines?	As it is a summer shoe, we need to meet the goal for the next season and develop milestone meetings.
What do I expect in the short run, long run?	First draft in four weeks, first prototype in three months, SOP (Start of production) in one year

Precise deadlines are important to avoid displacing the project process. The shorter the time frame - considering realistic capabilities - the better.

Case study: Budgeting

The purpose of briefly illustrating the case study is to show how significant the changes can be after implementing the SMART goals technique into project processes.

Both scenarios took place within a big, international corporation with a small corporate unit and flat hierarchy inside the organisation. One key aspect in the company was the annual budget and objective setting between corporate and business units. One unit applied SMART goals setting, another particular unit did not apply any effective goal setting approach.

Outcomes

The outcomes of this case study are shortly illustrated in figure 2:

Figure 2: Outcomes of SMART goals implementation

The case study shows that next to the positive outcomes of SMART goals mainly the two project management processes come into play - project planning and performance management. Calculating the budget represents a significant task in project planning and by measuring the performance of the set goals in the case study the expected outcomes have been checked.

Limitations

Limitations regarding the SMART goals method can be identified. Some exist due to human failure which are applicable to many methods throughout project management, some can be developed due to the method's natural characteristics.

Starting with the former category, the SMART goals setting depends - as similar methods do - on the user's input and perseverance to follow its instructions. Even if the tool was correctly used, choosing, for instance, a specific goal which is negatively influenced by someone's bias can turn good intentions into an unsuccessful story. Other traits of the method can be negatively influenced by the individual bias as well, such as the trait relevant. If the goal's attached degree of relevance has been identified wrongly, this false decision can hinder the goal realisation to prosper. For example, if the goal is based on an incorrect estimation of the demand on the market or the goal's directions are not aligned with the company's strategy. This error regarding the trait relevant is closely related to asymmetric information in the company. Taking this example into consideration, asymmetric information represents one of the major reasons for uncertainty in any managerial task and thus, it is not only relevant considering SMART goals.

Another aspect that encounters the successful execution of the SMART goals setting technique is based on human resistance. The roots for a fruitless implementation can be both the human nature or the tool itself. The latter will be discussed as part of the tool specific limitations. Regarding the former, seemingly unrelated individual human anxiety about the outcome of the goal setting can hinder to achieve any positive result. This - in the context of change management - phrased phenomenon resistance to change can arise due to self-interest of the affected, who has no desire to adapt to a new goal, or due to the individual belief of missing capabilities after a goal has been established. The latter is closely related to the expectancy model of motivation.

Considering model specific attributes, SMART goals do not ensure appropriate goal setting, meaning that it rather puts emphasise on the ability to phrase goals, but not to determine whether these are valuable. However, Doran identified the general complexity in setting appropriate goals in a dynamic environment. Moreover, it is argued that it is not applicable to goals in the long run as wells as lacks flexibility. This argument is closely related to the fact of a dynamic business environment and that the tool does not offer natural capabilities to bypass this circumstance. Furthermore, it is claimed that the technique lacks the spirit of exigency and of creativity and rather supports lethargy. Setting low goals is another critique of the tool. Resulting from a strong insistence on a trait like achievable, higher and more optimistic goals potentially leading to greater performance are disregarded. Last but not least, the many variations of interpreting the acronym of SMART goals lead to a loss of effectiveness and to misunderstandings.

Alternative goal setting methods such as Cascading goals where the hierarchal Top-down approach is essential or Using Percentage Weights with a relative assignment of importance to organisational goals offer possibilities to bypass identified flaws of the SMART goals technique. Nevertheless, these options are also accompanied by negative aspects which do not allow a general applicability regardless of the company's size.

SMARTER

Due to identified limitations, an extension of SMART goals to SMARTER goals including traits like E (evaluated) and R (reviewed) has been developed:

• E: This criteria demands the manager in charge to evaluate the progress of the goal. As projects are exposed to a dynamic business environment, a continuous evaluation of progress and performance are necessary to adjust the goal settings.
• R: Putting emphasis on reviewing or rewarding facilitates feedback and learning during the goal achievement process. It allows to acknowledge performances keeping the attention to the goal and the employees being involved high.

These two attributes are another way to mitigate potential flaws of the original tool.

Conclusion

As initially stated the SMART goals technique is supposed to be an effective way of achieving specific objectives. The question whether or not SMART goals lead to effectiveness cannot be answered so easily. For many other methods the dependence on external circumstances represents a crucial part whether the applicability is successful or not, same occurs to the SMART technique. However, its purpose and structure led to proven success and popularity in the industry. In contrary to other methodologies such as Cascading goals, it depends less on the organisational structure. Its rather generalist applicability can lead to failure, however, by putting emphasise on its positive guiding and goal structuring attributes its overall success and continuous usage for more than 30 years seems comprehensible. Additionally, the expectance of one size fits all, i.e. one tool can be applied to any case, is unrealistic and in general, not applicable to many tools regardless of its purpose. Its structuring, clear and motivating traits are facilitating many goal setting processes. Despite abandoning the tool due to its limits, an inclusion of affected people in the goal development process, regularly updating initial goals in the dynamic business environment and a precise evaluation of the goals' consequences to avoid a reduction of productivity can reduce potential limits. In order to be successful, a deep understanding of the organisation is required due to its importance throughout the stages of project management. Especially, for performance management a clear system and means of measurement for evaluating performance indicators is necessary. In conclusion, SMART goals in a project management environment have proven to be a valuable tool for a great time. Considering its given limitations by encountering them with proper means can lead to a big achievement while planning a project and later on evaluating its performance.

Annotated bibliography

The annotated bibliography is characterised by its diversity. Next to scientific papers or literature, online blogs and articles are included to capture broad and diverse types of information.

1. There's a S.M.A.R.T. way to write Management's goals and objectives: This article provides the first academic mention and explanation of the acronym SMART. It is important to strengthen the academic value of the above written paper as it explains the correlation between vague goal setting and underperforming organisations. Moreover, it states how goal create direction in an organisation and how the success of an organisation is closely related to original effort of goals. Lastly, this paper touches upon the obstacles and complexity of a dynamic business environment which are influencing the goal setting and illustrates the long history of SMART goals.
2. Toward a Theory of Task Motivation and Incentives: It is a scientific paper based on organizational behaviour and human performance which underpins how effective goal setting results in great organisational performance. Moreover, it's historical value is supportive for the above written article.
3. The Standard for Project Management: The Standard delivers definitions and guidance throughout any project management process. Regarding SMART goals, it defines the goal in a project management environment. Additionally, it shows the goal establishment takes place right after the scope of a project, program or portfolio has been been defined. Lastly, the translation from the vision to a specific goal is described.
4. Project Management middle five stages: This reference edited by the Project Management Institute illustrates the five main stages within a project management process and has been of great value for the written article as it can be used to show where SMART goals are mainly implemented.
5. Essentials of Contemporary Management: Using this source has delivered value to the statement about uncertainty while implementing any managerial tasks. This statement has been necessary to set the environment in which SMART goals take place in order to argue about its limitations. Furthermore, it gives insight regarding other mentioned theories such as the expectancy theory as part of the limitation argument.
6. Setting Goals: Who, Why, How?: This scientific article published from the Harvard University demonstrates the overall results of effective goal setting. It support the written paper by explaining the benefits of some SMART goals traits such as specific and relevant. Moreover, it explains the term one size fits all saying that no tool can guarantee applicability on any scenario.
7. A Worksheet for Preparing SMART Goals: This online article is illustrating benefits of a SMART goals implementation. More importantly, it gives a guidance how to increase the chances of implementing SMART goals successfully and describes how certain limits can be encountered.
8. The History and Evolution of SMART goals: Using this online article allowed access to a solid Microsoft Excel spreadsheet template which enabled the development of the guideline for the SMART goals application. It is the source of Figure 1 illustrated in the paper.
9. SMART Goals: The reference provided crucial insights about the various interpretations of the SMART acronym.
10. A brief History of SMART goals: By referring to this article, the popularity and the level of awareness of the SMART technique are described. Moreover, the applicability throughout any project management process is touched upon and limitations as well as the extension to SMARTER explained.
11. 10 SMART Goal Setting Best Practices For Project Planning: The author of this reference describes the fundamental values of SMART goals within the project planning phase. Additionally, the usage in combination with other project management tools such as WBS or Gantt chart is illustrated. The attribute measurable is analysed more closely and its importance is highlighted.
12. SMART Goals Reduce Ambiguity and Increase Commitment: The article shows the benefits of applying the tool in a project management context. Furthermore, it describes the experience of a project manager involved in two similar business units, one using SMART goals and another without an effective goal setting. This example is an essential part of the above written article.
13. Smart goals and goal setting for career enhancement: The journal provides a good overview of SMART goals in terms of career, especially, how the tool can be used in combination with other methods such as the Balanced Scorecard.
14. Use SMART Objectives to Focus Goals, Plans and Performance: It emphasises the usability in performance management and how applying the tool supports to create indicators which are of great relevance for performance measurements of expected outcomes.
15. How to Link SMART Job Objectives to Strategic Plans: The article delivers guidance to follow in order to successfully implement SMART goals. Using this reference was essential to develop the application guidance of the tool and additionally, to set up the prerequisites before developing any SMART goal.
16. The theory and practice of change management: This academic book on change management contributes to the written paper in that way that it explains failure of the tool caused by human resistances.
17. SMART Goals How to Make Your Goals Achievable: This reference has been used to support the argumentation of SMART tools limitations.
18. 3 Popular Goal-Setting Techniques Managers Should Avoid: The business review paper demonstrates how goal setting can fail in practice and furthermore, provides alternatives to the SMART goal technique, e.g. Cascade goals and Using Percentage Weights.