SMART goals in strategy planning

Revision as of 14:09, 8 May 2023

Abstract

Initially created by George T. Doran in the Management Review, SMART is the acronym for the tool: Specific Measurable Assignable Realistic and Time-related^[1]. The main purpose of the tool was to create something that every manager or team member could follow thereby making it an effective tool used in setting goals and objectives for a task. This is why this tool is more effective in strategies as it helps pay the way for new ideas that can be implemented in different projects.

Although the tool has different purposes and meanings where it can be implemented; it is still used as the most efficient tool in goal setting. The scope and use of the tool are enormous in ways that they can easily be combinable with other methodological project management tools like Gantt charts, SWOT tools, FMEA, etc., and having a flexible application regardless of the project size is another reason for its popularity.

This article will go over the basics of the Goal setting tool and its main understanding whilst focusing on its implementation in strategies, applications in real-time projects, and Limitations of tools.

Why Goal Setting

The practice of creating goals has existed for centuries; the earliest examples may be found in philosophic works, where they take the shape of personal goals and aspirations. Therefore, Goal setting is crucial for personal and professional success, as it provides direction, motivation, and a clear sense of purpose. Over time, goal-setting has become a common technique employed in both personal and professional settings. This is usually defined as the most crucial step in a project as unclear goal settings in companies hinder continuous progress within the organization.

Goals, in general, can be seen as short-term and long-term, and are worked on an overall vision. They 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^[2]. Developing the right goals represents a crucial part of project management as it promotes accountability by establishing clear expectations and responsibilities for individuals. However, from the traditional approach of applying goals at the start, it is also encouraged to be done on an ongoing basis, as circumstances change and new opportunities arise. Overall goal setting usually depends on the individual or organization's preferences and needs. Regardless of the timing, the key is to establish clear, specific, and actionable objectives that are aligned with overall values, vision, and mission.

Framework and Application in real-time

Certain studies have shown that the SMART goals technique is valuable due to its requirement for specificity. As mentioned above having specific or clear goals, respectively, increases persistence and self-efficacy. Moreover, it reduces the influence on individual workloads, and the time constraint of SMART goals helps facilitate a fast work pace environment compared to undefined deadlines. Due to its great scope of application possibilities, SMART goals can be utilized throughout the project management process^[3]. However, the main aspects of the application in project management are planning, performance management, and monitoring.

Figure 1: SMART goals^[4]

In the following subsections, the basic understanding of the SMART model will be elaborated. For further understanding an example with a problem statement is mentioned below:

Problem statement: A company wishes to increase its market value and footprint among its competitors and wants to increase profits through sales of organically made substances.

S

Specific: Being specific to the problem statement and setting Goals should be clear and well-defined, answering the questions of who, what, where, when, and why. For example instead of setting a goal to "increase sales," a more specific goal would be " when / how / to increase online sales by 20% within the next quarter."

M

Measurable: Goals should be quantifiable and include specific metrics to track progress. This can involve setting specific targets or milestones that should be reached and can be tracked using KPIs. For example, if the goal was to increase online sales by a margin of 20% %, the KPIs should include the average sales, pricing, order values, etc to track progress.

A

Achievable: Goals should be realistically achievable with the available resources and skills. It has to be noted that one should not get carried away while setting goals as too easy or too difficult types of goals can be demotivating. Therefore one must find the right balance during the process of setting goals. For example, if the organization has only 20% profits and wants to increase its profits to 50% within the next quarter but has limited resources, it will not be achievable. So they must look into realistic possibilities to help develop their sales; Such as asking the right questions using what/how can they use the resources at hand to reach the profit scale.

R

Relevant: Goals should be aligned with the overall strategy and objectives of the organization. This is prime in importance as setting goals that are not relevant to the organization's mission can be a waste of time and resources. For example, if the organization's mission was to generate profits by promoting the use of organic materials sustainable, sales of other products such as non-organic would not be relevant as it does not fit with the mission statement.

T

Time-bound: Goals should have a clear deadline for completion. Having a sense of urgency and focus is always essential in a strategic approach to any company which wishes to grow in market value. So naturally, it is essential to set deadlines based on the priority and complexity of the goal, and should be communicated clearly to all stakeholders. For example, if the goal still remains to increase online sales by 20%, a deadline made 3 months prior and approved by all would be vital to setting a focus toward the target.

Implementation with other tools

Given the scope of application possibilities, as discussed prior the SMART tool can be combined with other project management tools to create a more comprehensive approach to goal setting and achievement. One such tool is the use of the GANTT Chart.

With the likes of a visual tool, combining the SMART tool with the Gantt chart can help to create a more structured approach to project management.

Assuming a team is working on a strategy to increase their sales through a product that is to be launched in the upcoming sales quarter. The team can use the SMART tool to define the goals that help with the strategic planning process, and once the goals are set; the team can create a GANNT chart to plan and schedule the tasks needed to be met to achieve these goals. The chart would include the start and end dates for each task and the interrelation between each task. This can help the team to craft a perfect strategy and identify any potential roadblocks and adjust the schedule accordingly. Thus, this can help increase the success rate of the project and minimize the risk of financial issues or delays.

How SMART changes while applying in strategies

In companies, different situations arise during the lifetime of a project which leads to the final goal being complex or challenging, and a structured approach is required to ensure success.

1) Clarifies Objectives: The SMART tool gives an organized strategy for creating clear and defined objectives. By combining the tools from SWOT analysis which can be applied with the SMART Tool; Companies may use the "S(Strengths)" and apply to the SMART criteria to verify that their objectives are well-defined, actionable, and in line with how they can provide focusing upon the vision and purpose.

2) Sets Achievable and Realistic Goals: By using ideas from the SWOT model and focusing on the "O(Opportunities) T(Threats)", The SMART tool encourages businesses to define objectives that are both achievable and practical based on the opportunities they can build upon. This helps to keep firms from establishing unrealistically high targets that are demotivating.

3) Progress is measured using the SMART method, which requires businesses to define quantifiable objectives that can be tracked and monitored over time. This enables businesses to track their progress and adapt their strategy and tactics accordingly.

4) Improves Accountability and Decision-making: The SMART tool assists businesses in establishing accountability by establishing time-bound objectives and outlining clear responsibilities for meeting them thus giving a clear framework for evaluating different options and selecting the most appropriate course of action improving the overall decision-making process in time.

Limitations of the tool

Despite its wide popularity, SMART Goals is not an instant recipe for success. SMART Goals will rely on a strategy that is properly formulated since the SMART Goals provided no guidance in determining whether the goal is wise. For that reason, the SMART acronym does not stop a company from doing the wrong things right. While the SMART tool has numerous applications, including project management and strategic planning, it does have significant limits which exist due to human failure which are applicable to many methods throughout project management and some through the method's natural characteristics.

1) Can Encourage Short-Term Thinking: The SMART tool's focus on short-term goals may discourage long-term planning and strategic thinking.

2) May Lead to Narrow Focus: The SMART tool may lead to a narrow focus on achieving a specific goal, at the expense of broader organizational objectives.

3) Focuses on Quantitative Measures: The SMART tool tends to focus on quantitative measures and may not fully capture the qualitative aspects of a goal.

4) Limited Scope: The SMART tool is not always useful with complex goals ie. that require a broader and more holistic approach due to its narrow focus, thus limiting the range on which in can be applied to a whole unit.

In conclusion, even though the SMART tool may be useful for goal setting and strategic planning, its key limitations should be noted and solutions focusing on the tool's flexibility with use with others should be considered to ensure that all elements of a project or strategy work together for efficient results.

Conclusion

In conclusion, the SMART tool is a great tool for project management. It gives a systematic technique for establishing clear and explicit objectives, which can assist to guarantee that the project is well-defined, feasible, and connected with the general goals and strategies of the business. The topic of whether or not SMART objectives contribute to effectiveness cannot be answered due to their varying nature and how it is implemented based on ideas worked around their limitations. Nevertheless, the SMART technique can assist project managers to monitor progress, identify difficulties or hazards, and take remedial action by creating quantifiable, time-bound targets. This leads to overall growth and development in the organization and the projects done, thus increasing the chances of project success and the overall success of the company.

Annotated Bibliography

1) George T. Doran (1981). There's a S.M.A.R.T. way to write Management's goals and objectives. Management Review George T. Doran focuses on the problem that writing goals can be a stressful task that managers are sometimes not capable of doing, even though it is recognized as an effective goal and can give the company a sense of direction. He contends that setting goals must become whole in one's behavior and that managers need to receive training on how to do so in the workplace.

2) Project Management Institute. “A Guide to the Project Management Body of Knowledge (PMBOK® Guide)”-2017. The Project Management Institute's "A Guide to the Project Management Body of Knowledge (PMBOK® Guide)-2017" is a comprehensive guide to project management. It covers the entire project management process, from initiating a project to closing it out. The guide is divided into five process groups: initiating, planning, executing, monitoring and controlling, and closing. It also covers knowledge areas, including project integration, scope, time, cost, quality, communications, risk, stakeholder management, etc. The PMBOK Guide is widely recognized as a standard reference for project management practices and is used by project managers across a variety of industries and sectors.

Literature

1. [↑ 1.0 1.1 1.2 1.3 George T. Doran (1981). There's a S.M.A.R.T. way to write Management's goals and objectives. Management Review,]

2. [ Frederick Taylor and Scientific Management Understanding Taylorism and Early Management Theory https://www.mindtools.com/anx8725/frederick-taylor-and-scientific-management]

3. [Smart Goals: Definition and Examples. (n.d.). Retrieved July 28, 2021, from https://www.indeed.com/career-advice/career-development/smart-goals]

4. [↑ 10.0 10.1 10.2 10.3 10.4 10.5 ]

5. [↑ 14.0 14.1 Susan Berry & Randy Thomas (2008), Use SMART Objectives to Focus Goals, Plans and Performance, https://www.projectsmart.co.uk/pdf/use-smart-objectives-to-focus-goals-plans-and-performance.pdf, Retrieved September 25, 2017]

6. [↑ 6.0 6.1 How to Make Your Goals SMART. https://www.mindtools.com/pages/article/smart-goals.htm Retrieved February 16th, 2021.]