Acronyms are great. Using Mnemonic devices or techniques help us improve our ability to remember. They are also great for the verbally lazy. Who wants to say Internal Revenue Service when IRS is so much easier?
Business objectives must be – Specific
Running a busy enterprise is exhausting. Tending to take us toward the path of least resistance. Especially when we have so much to do. However, in the area of business goals, targets, directives and plans for the future, this path will lead us to ruin.
For example, It’s easy to say my objectives are: increasing revenues, motivating employees and reducing waste. But our minds don’t function well with vague or ill-defined concepts. These kinds of unclear goals will lead to unclear directions. Unclear directions will lead to confusion, and confusion will lead to frustration. In the end, frustration leads to anger, disappointment and ultimately failure.
To stop this dangerous path, provide your mind with clear and specific goals. For example, an objective like – Increase revenue in our service center by 20% this year. Or provide a $500 quarterly bonus for employees who increase their gross sales 15% each quarter. The reason these specific objectives work is – a precise desired outcome helps encourage precise action. Clear direction helps people plan and implement exact steps to help increase efficiency, reduce waste, revamp output, and give our employees more exact direction in what we expect.
Business objectives must be – Measurable
Every goal must have a deadline, limit, size or some type of boundary to determine how we’re doing and whether we reach our targets. Measurable means determining the: how big, how long, where will it happen, who is accountable to who, how do we measure progress, when do things need to be done etc.
If you can’t measure it, you can’t manage it.
Measurable goals must answer these questions:
What metric do I use to measure success: time, accomplishment, psychical results, location etc?
How long do I need to reach the goal?
How much do I have to do, work, or save in order to finalize my objectives?
Who can I get to help me keep track of my progress or employees?
Where does it need to take place?
How, when, where and who will measure accountability?
When does it have to be done?
Why do I want to do this and what is my expectations?
Finally, try to set goals with concrete criteria for measuring progress toward the attainment of each part of the plan. Measuring our progress makes it easier to stay on track, reach target dates, and experience the exhilaration of achievement which can spur us to continue on.
Business objectives must be – Attainable
To many this sounds ridiculous, because who would make goals that are impossible to reach? The answer is – pretty much everyone.
It’s human nature to want things we can’t have, to change things we don’t like in others and grumble about why we keep failing. The natural mindset of humans is to shift blame away from ourselves (just ask any child). How often have we heard – “If only my boss, neighbor, spouse, employees or competitors would change, then I would be soooo much better off.
We are responsible and control only our business, not our industry. Of course, its possible to influence, give direction, offer advice, and make demands of our employees, suppliers and distribution channels, but whether they oblige its up to them. Just remember that when goals are too far out of reach, we wont commit to them for very long. We may start with the best of intentions, but as time goes by, we ultimately realize the un-attainability of our goal. Sometimes we quit right away. But it seems, most often, our subconscious keeps things in the back of our mind which inhibits us from doing our best. So, we muddle along until we’ve had enough.
One way to set attainable goals is to start off slowly and methodically.
Don’t try to be the best in everything, but start by being great in one thing. Try increasing revenue slightly day by day, instead of setting massive yearly targets. Don’t expect every employee to change right away, but target individual poor performers and focus on them. Set realistic budgets and financial targets, then move up as time goes on.
Business objectives must be – Relevant
All sorts of people, employees, media, business groups, customers and even society can influence us to set objectives we have no reason to be in. Social justice, giving to the poor, sponsoring community initiatives, volunteering for trade groups, political activism may be great for you as an individual, but no so great as a business owner. The same goes with business expansion. Adding services, copying competitors, increasing staff, and joint initiatives typically are only fruitful if they remain relevant to your business.
Even conglomerates need to stay within the boundaries of relevance. Just look at General Electric and you’ll see a company that brought too many irrelevant business together into one giant unmanageable mess. One way to stay relevant is to set objectives that you, or a trusted manager, has complete control over. Like they say, “stay within your wheel house” and “stick with what you know”. When we stay within the areas relevant to our skill set, we most likely will be able to reach our objectives. This is not the case when we start delving into areas beyond our abilities. There’s a learning curve to the components of every industry. And adding something outside what you normally do, is a hard road to travel. Unless, of course, you can bring in a group who can do it for you, but that’s another matter entirely.
Finally relevance does not mean things are the same, just similar. For example, many companies expand beyond their original focus. However, these changes are typically done over time as the business keeps up with current trends. For example – an ice cream shop could expand by adding other deserts, sweet beverages, coffees or other compatible foods. But adding an assortment of beers and cigars next to the ice-cream freezers is probably where relevance meets irrelevance.
Business objectives must be – Time Bound
This is probably the easiest to do logically, but not so much emotionally. This is why people respond differently to deadlines and time constraints. Some with joy, others with anger and many with just frustration.
Moving the time line: This happens when we don’t reach a goal by a specific time. Then we keep adding more time and hope it helps. This is often caused by what economists call Sunk Cost: which is the cost that has already incurred and is not able to be recovered. After spending so much time and money, it seems logical to keep going. and no one likes to waste money. However, sometimes you just have to accept the sunk cost and move on.
Cognitive Dissonance: This is the discomfort we get when we try to hold two competing ideas or theories. When we put a hard deadline on something it limits the options. Basically when you reach the end, you have to decide if you failed or succeeded. Sometimes this poses competing ideas, because it could be both success and failure. People are hard pressed because these contradictions play havoc as how to continue or even if they should continue.
Regardless of our feelings, we must set deadlines and/or itemized time frames for all our objectives. Here’s why
Helps us stay accountable
Keeps momentum going, or stops it when it’s needed
Motivates innovation and creativity
Helps prioritize our actions
Quantifies both failure or success
Pushes people to keep moving
Increases confidence and learning
Stops things from dragging on and on.
Following this SMART way may just be the ticket you need to move your business to the next level.
