SMART goals in project planning and performance management

Revision as of 16:49, 22 September 2017

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Considering the obstacles an effective goal setting can encounter such as lacking organisational capabilities or resistance to change, e.g due to individual anxiety, creating and implementing appropriate goals seem to be challenging. However, in a dynamic company environment establishing effective goals followed by developed action plans is of great importance in any project management process. Initially created by George T. Doran in the Management Review^[1], 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. Using this tool allows to generate success substantially related to its original efforts, which is of high value for any project manager. Due to the SMART goals' great scope in diverse industrial areas, a deep investigation of the SMART traits and simultaneously a critical reflection of its potential limitations will be conducted as follows.

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^[2]. Followed by George T. Doran in the Management Review^[1], the study extended to the recognition that unclear goal settings in companies hindered a continues progress within the organisation.

A) As stated in the Standard for Project Management^[3], goals are defined outcomes and benefits specifying the expected result of a project. They can be short term and long term, and serve as the translation from established program's 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^[4]. Moreover, goals are used throughout the project management process to track achievements and to measure the performance, which are important in the Program Governance process.

B) Organisations such as companies aim to create benefits and to reach outcomes or goals, respectively^[3]. This process is often initiated by establishing a vision which is translated into measureable goals in the project planning phase on an organisation's strategic, tactical or operational level. Next to the performance evaluation of the proposed goals, goals create a direction^[1] which allows to be followed throughout the phases of any project management process^[5]. As any managerial task such as a planning process is accompanied by uncertainties^[6] that can lead to ambiguity and fallacy, an effective way of setting achievable goals is absolutely essential(QUELLE finden, wo es angesprochen wurde!!!!!) to mitigate negative outcomes.

Next to the findings by Doran^[1] and the Standard for Project Management^[3], further experimental research accomplished by Locke and Latham (2002)^[7] prove 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^[8]

Big Idea SMART goals and benefits

SMART goals^[9]

Using this acronym, several variations evolved other time such as^[10]:

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

However, due to simplicity reasons just the first and most common variations are used in the following.

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, reduces the influence of anxiety of individuals and eventually allows an outperformance of a reference group without a specific goal setting according to research^[7]. The time constraint of SMART goals is also facilitating a fast work pace compared to undefined deadlines^[11].

Another reason for its success is the level of awareness of the technique, the great scope of appreciation among users it experiences and the easy applicability^[12].

In the field of project management, SMART goals generate a sense of discipline, structure^[13] and focus in the planning phase^[14]. 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^[1]. By reducing ambiguity and increasing commitment^[15] in a managerial environment and its great applicability in any part of a company whether the project management or the entire company^[16] - regardless of the size of the organisation^[17] - it stands out in the industry. 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^[18], WBS, Gantt chart^[19] or Balanced scorecard^[20]. In terms of performance measurement, using SMART goals enables developing indicators to analyse the performance compared to its expected outcomes^[21] and thus enables feedback and learning^[22]. Lastly, an improvement of the team efficiency within a project team is another attitude.

Application: How to be SMART?

As mentioned in section "Introduction to goal setting" implementing smart goals takes place after the project scope has been defined^[23]. According to this, 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^[12]. However, the main aspects of application in project managements are planning, performance management and monitoring^[22]. Lastly, it is a popular tool in the area of time management^[24].

Before applying the tool on a specific case, certain things need to be considered^[25]:

1)A clear linkage between set goals and the company's strategic goals or an alignment between goals, respectively, 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. Though this might seem obvious, establishing goals on an operational level with clear defined strategic goals can promote higher performance as an understanding of task achievements in comparison to company goals takes place.

3)Lastly, 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^[26], more commonly used are simple Microsoft Excel Spreadsheets.

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:

Be precise to avoid misinterpretation, but keep it simple.

Measurable:

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^[27], if necessary qualitative statements need to be considered to translate into numeric values.

Achievable:

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

Relevant:

The above questions need be answered positively to ensure the relevance of the goal. 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^[7].

Time bound:

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

Case study: Budgeting^[15]

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

Both scenarios took place within an 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 goal setting, another particular unit did not apply any effective goal setting approach. The outcomes of this case study are shortly described as illustrated.

Outcomes

Without SMART goals:

• complete focus on budget goal as only internal unit goal
• no involvement of internal stakeholders into budget planing
• compliance culture
• no efficient usage of resources
• laid off manager in charge

With SMART goals:

• budgeting started by creating specific actions that would cause exceeding the proposed budget
• broad involvement of all functional managers
• great alignment among relevant managers
• continuous promotion of developed goals
• goal driven culture to ensure success by sharing goal sharing among employees
• goal performance meetings
• great effort for goal setting
• low turnover
• great commitment
• creating specific and measurable elements out of abstraction of budget plan
• reduce ambiquity

The case study shows that mainly the two project management processes come into play, namely, project planning and performance management^[4]. 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 - on the user's input and perseverance to follow its instructions. Even if the tool was correctly used, choosing for instance a specific which is negatively influences by someone's bias can turn good intentions into a 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 like an incorrect estimation of the demand on the market or the non-existing relevance for the overall company in case that the goal's directions are not aligned with the company's strategy, this false decision regarding the trait relevant caused by asymmetric information can hinder the goal realisation to prosper. 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^[1]. The roots for this unpleasant reason of an fruitless implementation of the discussed tool 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 achieving any positive result. This in the context of change management phrased phenomenon resistance to change^[28] can arise among others 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^[29].

Considering model specific attributes, SMART goals do not ensure appropriate goal setting, meaning that it critics emphasise its ability to phrase goals, but not to determine whether these are valuable^[12]. However, saying this Doran^[1] identified the general complexity in setting appropriate goals in a dynamic environment. Moreover, it is argued that goals in the long run as wells as lacking flexibility is a flaw of the tool. 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^[12].

Tip: Rather than using the acronym as a way to determine which goals are wise or worth pursuing, use it only as test to check whether goals are well stated.(https://hbr.org/2017/01/3-popular-goal-setting-techniques-managers-should-avoid)

goals not ambitious enough

strictly following of guidance can lead to disregard better solutions

(Benefits and Drawbacks

SMART is an effective tool that provides the clarity, focus and motivation you need to achieve your goals. It can also improve your ability to reach them by encouraging you to define your objectives and set a completion date. SMART goals are also easy to use by anyone, anywhere, without the need for specialist tools or training.

Various interpretations of SMART have meant that it can lose its effectiveness or be misunderstood. Some people believe that SMART doesn't work well for long-term goals because it lacks flexibility, while others suggest that it might stifle creativity. For more information on the potential weaknesses of SMART, see our article) >mind tools.com

Other techniques? >>Cascading Goals, Using Percentage Weights (https://hbr.org/2017/01/3-popular-goal-setting-techniques-managers-should-avoid) The acronym has also expanded to incorporate additional areas of focus for goal-setters. SMARTER, for example, includes two additional criteria: Evaluated: appraisal of a goal to assess the extent to which it has been achieved. Reviewed: reflection and adjustment of your approach or behaviour to reach a goal.(https://www.projectsmart.co.uk/brief-history-of-smart-goals.php)

Conclusion and outlook

It is important to note, while the exact definition of “R” is not critical, it should be meaningful and not redundant in a larger context.(achieveit)

there is no ‘one­ size ­fits­ all’ way of utilizing goal setting(http://hilt.harvard.edu/files/hilt/files/settinggoals.pdf)

Be sure to include people that will have responsibility for the goal in the development process.(http://www.brighthubpm.com/templates-forms/78835-a-worksheet-for-preparing-smart-goals/)

Then, review progress on a periodic basis. The parameters surrounding goal development may change. If this occurs, then the goal needs to change as well. Don't allow a goal to limit productivity because the bar was set too high or to discourage performance because it is clear the goal will never be met by the deadline. Pull out the SMART Goals Worksheet that was originally prepared and update it. Even if the goal seems appropriate, review it at an established period. A "6 Month Update" Column is included in the worksheet. However, use whatever timeframe is appropriate for the project.(http://www.brighthubpm.com/templates-forms/78835-a-worksheet-for-preparing-smart-goals/)

Despite its critics, the SMART approach has changed the way we set and measure goals. It offers a clear and simple framework. Its popularity continues to grow, largely because it provides the vital element of organisation(https://www.projectsmart.co.uk/brief-history-of-smart-goals.php)

SMART objectives describe results to be achieved rather than duties undertaken. Writing them well requires understanding of results management concepts, clear definition of targets, and practice with identifying measures that make sense. Using them well requires familiarity with the performance management cycle, how to plan work based on desired results, and how to systematically assess progress and share feedback on achievements.(http://www.aligned4results.com/WritingSMARTjobObjectives.html)

Explanation why SMART: SpecificThe first is for the goal to be specific with the avoidance of generic or undefined objectives. Measurable requires the goal to have quantifiable qualities that can be clearly articulated and measured. Achievable is, for obvious reasons, something that is realistic and not setting someone up for failure to reach the goal. Relevant is going to have several implications, but the most important is that it is something that is going to be important to the goal setter. Finally, the time constraint might be one of the more critical aspects for getting things actually completed.(http://jalt-publications.org/tlt/departments/job-info-centre/articles/1661-smart-goals-and-goal-setting-career-enhancement)

How Do You Write a SMART Objective Statement? First, you must decide exactly what you expect to create, and how you will recognise it when it comes to be. Now put it in words: "Our Internet Marketing system produces a minimum of $3500 per month in product sales by 31 July 2015, with a quarterly increase of at least 5% thereafter." The Specific, Measurable, and Time-bound aspects are built into one short declaration.

Will it happen? Much depends on whether your objective is aligned with things that really matter to you (and your organisation), and whether you can commit the resources to bring it about. In individuals and in organisations, resource distribution often reflects past priorities and requirements. As you develop your SMART objective, step back and compare proposed results with existing commitments in the larger organisation or systems you serve. This broader perspective can help you decide if:

Your proposed result is consistent with and directly relevant to larger strategic goals and desired outcomes, and Your proposed result has such great pay-off potential that it is worth the resource investment it requires. Taking on a new initiative usually means that something else must go. If you discover that current investments are not producing the gains you had hoped for, you know where you can harvest resources for endeavours you believe will be more fruitful.

Now that your objective embodies the "Alignment" and "Realistic/Relevant" aspects of SMART, you are ready to use it as a target for work plans.(https://www.projectsmart.co.uk/use-smart-objectives-to-focus-goals-plans-and-performance.php)

Annotated bibliography

1. ↑ ^{1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7} Management Review, 1981, http://community.mis.temple.edu/mis0855002fall2015/files/2015/10/S.M.A.R.T-Way-Management-Review.pdf, Retrieved September 20, 2017
2. ↑ Dr. Edwin Locke, Toward a Theory of Task Motivation and Incentives, 1968
3. ↑ ^{3.0 3.1 3.2} PMI, The Standard for Project Management, 2013, p26-29
4. ↑ ^{4.0 4.1} https://www.projectinsight.net/project-management-basics/basic-project-management-phases, Retrieved September 20, 2017
5. ↑ PMI, XXX, https://www.pmi.org/learning/library/project-management-middle-five-stages-6969, Retrieved September 20, 2017
6. ↑ Gareth R. Jones, Essentials of Contemporary Management, 2015, p9
7. ↑ ^{7.0 7.1 7.2} http://hilt.harvard.edu/files/hilt/files/settinggoals.pdf, Retrieved September 20, 2017
8. ↑ http://www.brighthubpm.com/templates-forms/78835-a-worksheet-for-preparing-smart-goals/, Retrieved September 20, 2017
9. ↑ Megan M. Flores, 2017, https://www.achieveit.com/resources/blog/history-evolution-smart-goals/, Retrieved September 20, 2017
10. ↑ https://www.projectsmart.co.uk/smart-goals.php, Retrieved September 20, 2017
11. ↑ Dr. Edwin Locke & Latham, American Psychologist, 2002
12. ↑ ^{12.0 12.1 12.2 12.3} https://www.projectsmart.co.uk/brief-history-of-smart-goals.php, Retrieved September 20, 2017
13. ↑ http://blog.capterra.com/10-smart-goal-setting-best-practices-for-project-planning/, Retrieved September 20, 2017
14. ↑ http://hr-mpact.com/Documents/goals_article.pdf, Retrieved September 20, 2017
15. ↑ ^{15.0 15.1} https://www.projectsmart.co.uk/smart-goals-reduce-ambiguity-and-increase-commitment.php, Retrieved September 20, 2017
16. ↑ https://blog.weekdone.com/smart-goals/, Retrieved September 20, 2017
17. ↑ https://www.achieveit.com/resources/blog/history-evolution-smart-goals/, Retrieved September 20, 2017
18. ↑ http://www.brighthubpm.com/project-planning/26374-smart-goals-in-project-management/, Retrieved September 20, 2017
19. ↑ http://blog.capterra.com/10-smart-goal-setting-best-practices-for-project-planning/, Retrieved September 20, 2017
20. ↑ http://jalt-publications.org/tlt/departments/job-info-centre/articles/1661-smart-goals-and-goal-setting-career-enhancement, Retrieved September 20, 2017
21. ↑ http://www.kean.edu/sites/default/files/u7/SMART%20Objectives.pdf, Retrieved September 20, 2017
22. ↑ ^{22.0 22.1} https://www.projectsmart.co.uk/use-smart-objectives-to-focus-goals-plans-and-performance.php Retrieved September 20, 2017
23. ↑ http://www.brighthubpm.com/project-planning/26374-smart-goals-in-project-management/, Retrieved September 20, 2017
24. ↑ https://www.mindtools.com/pages/article/smart-goals.htm, Retrieved September 20, 2017
25. ↑ https://www.aligned4results.com/consultingtipsandtoolsblog/2008/12/how-to-link-smart-job-objectives-to-strategic-plans/, Retrieved September 20, 2017
26. ↑ http://www.aligned4results.com/WritingSMARTjobObjectives.html, Retrieved September 20, 2017
27. ↑ http://blog.capterra.com/10-smart-goal-setting-best-practices-for-project-planning/
28. ↑ John Hayes, The theory and practice of change management, 2014
29. ↑ V.H. Vroom, Work and motivation, 1964