January 1, 2019
How to Use SMART goals—examples and best practices
In this article, we’ll define the SMART goal setting approach, explain how to use SMART goals, and provide practical examples. Interwoven in the examples will be the best practices in implementing the protocol. We’ll also introduce the concept of using SMART goals in an OKR (objectives and key results) methodology and detail the similarities of the frameworks.
A brief history and definition of SMART goals.
The SMART method was first introduced in the November 1981 issue of Management Review in a paper authored by George T. Doran titled, “There’s a S.M.A.R.T. Way to Write Management Goals and Objectives.”
SMART is an acronym that sets the criteria for setting goals and objectives. The SMART approach, which stands for Specific, Measurable, Attainable, (sometimes referred to as Aligned), Relevant, and Time-Bound, is used to develop goals that are concrete and geared towards execution in a defined period.
S: Specific, provides a clear description of what needs to be accomplished
M: Measurable, provides a metric, or number, that identifies when the objective has been achieved
A: Attainable, the objective must be achievable, within the timeframe and resources allocated
R: Relevant, meaningful, significant, and aligned with corporate priorities
T: Time-bound, the objective must be concluded by a specific date, scoring occurs at this time to determine if the objective has been achieved
Company-level SMART goal example
We will increase recurring revenue by 25% in 2019, exceeding our 2018 performance by acquiring additional new customers and reducing churn, which will improve overall corporate profitability. We will do so by hitting established targets each quarter throughout the year.
Specific: Increase recurring revenue in 2019
Measurable: Achieve a 25% increase versus one year ago
Attainable: Improve upon 2018 performance with 15% increase through new customers and reduced churn
Relevant: Revenue is the engine that drives our profitability
Time-Bound: Set specific numerical targets for each quarter in 2019
People operations SMART goal example
Improve the bench strength of the sales and marketing departments by reducing turnover of top performers in each discipline to no more than 10% annually, and onboarding at least three new people each quarter, within the allocated budget. This will improve the overall performance of these two key disciplines which drive our sales and profitability, as measured by retention and recruiting metrics each quarter.
Specific: Improve the bench strength of the sales and marketing departments
Measurable: Reduce turnover to less than 10% and recruit and hire at least three people each quarter
Attainable: Salary and recruiting budgets are adequate to achieve these targets
Relevant: Sales and Marketing are key drivers to the company’s revenue and profitability
Time-Bound: A mix of quarterly and annual objectives
Customer success SMART goal example
Improve customer service by improving the user experience and reducing response times, as measured by our NPS score, which we’ll improve from 95 to 98. This will reduce customer churn and improve our reputation in the industry, as measured by quarterly response time and NPS metrics.
Specific: Improve customer service and the user experience
Measurable: Respond to all tickets within 12 hours, and increase NPS score to 98
Attainable: Response times and NPS score represent incremental improvement versus one year ago
Relevant: Our customer’s experience will determine our ability to grow
Time-Bound: As measured by quarterly metrics for response times and NPS scores
OKRs encompass elements from SMART goals.
SMART goals and OKRs–similarities in the frameworks
Both frameworks provide criteria and a methodology for developing goals, and both methods address each element of the SMART acronym.
With OKRs, a collaborative goal-setting protocol for companies, teams, and individuals, objectives are what is to be achieved. They should be significant, concrete, and action-oriented. They represent the direction. Key Results benchmark and monitor how we get to the objective. They should be succinct, specific, and measurable. They typically include hard numbers.
Objectives and key results encompass SMART goal criteria.
Specific: Objectives are specific, answering What needs to be accomplished
Measurable: Key Results are Measurable, they are typically metrics or numbers which define when the Objective is achieved
Attainable: Objectives are attainable, yet inspirational, and in some cases aspirational. Google uses two types of objectives, which they refer to as aspirational and committed. Aspirational goals require more of a stretch by the organization and may need to be rolled from period to period before being accomplished
Relevant: Objectives are relevant. They must be aligned with corporate priorities, moving the organization in the desired direction, often in support of the mission or vision statements. Quarterly OKRs determine the focus of the entire organization and inform the work to be done in the period
Time-Bound: Key results are time-bound, the typical cadence in an OKR environment is quarterly. Key results are expected to be completed within the current quarter
Restating a company-level SMART goal as an OKR.
Objective (whatT is to be achieved): Increase recurring revenue by 25% in 2019
Key Results (how we get to the objective):
Key Result 1. Generate ARR of $250k per quarter, $1 million in 2019
Key Result 2. Secure a net gain of at least five new customers per quarter nationally
Key Result 3. Hire three new account executives per quarter
OKRs adhere to the SMART methodology.
Specific: Increase recurring revenue by 25%
Measurable: Generate ARR of $250k per quarter
Attainable: By securing the required number of new customers and aided by an increase in manpower, the objective should be achievable in the specified time frame.
Relevant: Revenue is still the engine that drives profitability
Time-Bound: Metrics: $250k in ARR, five new customers, and three new account executives every quarter
We hope these SMART goal examples help you understand SMART goals and OKRs.