SMART goals in strategy planning

Revision as of 15:39, 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. A scientific article published by Harvard University states that setting clear and measurable goals is essential for achieving success in personal and professional endeavors. Therefore, by providing clarity and focus, motivation, accountability, increased productivity, and better decision-making, goal setting can help individuals and organizations achieve their desired outcomes. Hence the step 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 a 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. An example of question with solutions is provided as a reference below

M

Measurable: Goals should be quantifiable and include specific metrics to track progress. It represents a crucial part of goal setting as it strongly influences the project flow. This can also 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.

How SMART changes while applying in strategies

Strategic planning is a mandatory idealogy that must be followed for a company's success. In strategic planning, the SMART tool can be used to ensure that the goals set are aligned with the organization's overall vision and mission. The specific goals set through the (SMART) tool should be tailored to fit the strategic plan, focusing on outcomes that are achievable and measurable within the given timeframe. Thus making sure that the organization is moving forward in the right direction.

Additionally, the SMART tool can also be used to prioritize goals in strategic planning. By evaluating each goal based on its level of specificity, achievability, relevance, and timeliness, the organization can determine which goals are the most critical and require the most resources to achieve. This ensures that an organization's limited resources are allocated to the most important goals, leading to more effective strategic planning and implementation.

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.

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, SWOT analysis^[5].

For example, 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.

[[File:phases-of-the-project-management-life-cycle.png|thumb|400px|Figure 2: SMART with Gantt charts^[6]