Planning is a fundamental part of the management process. A goal-oriented professional will focus on attending to customers, and the market needs to succeed at the end of the period. You plan to prepare your company for any variations in the market and potential adaptation needs on the organizational structure or supply capabilities.
In this article, we will talk about the possibilities the company has to create a good plan. We will talk about the SMART goals and how they can be helpful for your next strategic plan.
What do SMART goals mean?
SMART goals stand for Specific, Measurable, Achievable, Relevant, and Time-Bound.
To be specific means to be simple enough to be understood and focused on a particular challenge that is meaningful for the company. For example, increase sales on your Latin American business unit. In the topic, we will talk about giving a number to it.
The goal needs to have a numeric target so you can measure in a certain way. If it’s measurable, you can understand how far you and your team are from the planned target and adjust your efforts toward the progress and achievement of such a mark. So now you will state a goal such as increase sales on your Latin American business unit by 10%.
So, let’s say you manufacture mattresses, and your manufacturing capacity is 100 thousand units. Your company produces 100,000 mattresses per month and exports 20% (20 thousand) of them.
They sell other 75 thousand to the internal market. Actually, they have been already committed to USA clients. It’s feasible to request your international sales team to grow 25%, from 20 thousand to 25 thousand, since they will reach the limit of your supply.
The goal won’t be achievable with a growth percentage of 30% or 40%. If you insist on those targets, you will naturally have your team demotivated.
Keep your team motivated
It means it has to be important to the company’s result. Let’s say you sell two products only, mattresses and pillows. Your mattress revenues represent 99% of your business, and your pillow only 1%.
You want to grow in this new pillow market and establish a goal to increase pillow sales by about 50%, and mattress due to a mistake, become not a focus anymore. It looks like your 50% may be a significant number, but it is not relevant for the company’s survival.
So, it would be best to keep your goals relevant to the overall company’s result and be careful not to distract yourself with non-relevant things.
When establishing a goal, you must make a timeline to reach them. Why is that?
The simple answer is, your team will plan their tasks within this timeline to accomplish the goals. You will also have a way to measure the achievements by the time they are performed.
Why are SMART Goals Important?
The SMART methodology can organize your and your team’s efforts to reach the goals you establish. Let’s give you an example.
When measuring a goal, you know that you need to deliver a sales growth of 20% in 6 months. If this business unit represents 50% of the company’s sales, you know that this will generate an overall increase of 10% for your company.
Organize Your Efforts to Reach Your Goals
You know that it’s specifically related to one of your most crucial business units, and it’s relevant to the point you will need to dedicate a significant part of your budget to achieve these goals.
As you can see, everything is measurable, so you know that if you reach 15% growth (50% more than the target), you can pay your team accordingly and also increase the target for the next period.
The SMART goal is an acronym for Specific, Measurable, Achievable, Relevant, and Time-Bound. This means setting up a targeted goal in a specific area of your company relevant to the company’s results. The goal must be numeric, easily measured, and achievable to avoid demotivating the team within a specific period.
Of course, tor reach or your goals you always have to take into consideration your leaders, the talent of your team, their qualification, etc. But in this article we were more focused on the methodology you can use to reach your company’s goals.
Smart Goals can be decisive in organizing your company’s effort for future challenges. It will allow you to remunerate your team based on meritocracy and drive your efforts and budget in the right direction.
From now on, have the right goals using this methodology and let your team be motivated to the future challenges.