IN THIS EPISODE:
SMART goals are used to help teams achieve better outcomes. They turn a vague intent into a direct, specific understanding of what needs to be achieved. This helps in both measuring progress and determining whether the goal has been achieved.
The problem with goals that aren’t SMART is that they don’t clearly state what needs to be achieved and when. This leads to poor execution and ultimately teams who regularly don’t achieve their goals.
This week we discuss what SMART goals are and why you should use them in your strategic and business planning.
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Kevin Lawrence 00:12
Welcome to the growth whispers podcast where everything we talk about is building enduring great companies. Not good companies, not okay companies, but amazing, enduring companies. I’m Kevin Lawrence. I’m here today, as always with my co host, Brad. Brad, how you doing today?
Brad Giles 00:28
Very good. Very good. Actually. My gosh, it has been the wettest winter, I think ever or maybe by one year. It’s very, very wet. Looking forward to now beginning to get closer towards spring. How are you doing? Awesome.
Kevin Lawrence 00:45
Actually, we had rain here for the first time in over a month today. It was our last couple of days. It was kind of wild. Yeah, I’m doing great. Really good. Looking forward to the show today. And what are we digging into today?
Brad Giles 00:56
Oh, today we’re talking about smart goals, how to use SMART goals where your team why they matter. And why you and I are so picky about them why we are so annoyingly yes annoyingly picky and dig right into them with the teams that we work with why we make sure that they’re always smart. But let’s begin with Oh, yes. Yeah, it
Kevin Lawrence 01:22
seems to be forever. It’s one of these things that we work on and continue to work on. Because it’s very hard to stay smart. When it comes to goals. We’ll dig into that. Let’s talk about the word of the day. Brian, was indeed I was okay. Let’s hear it. What’s the word, the phrase the sentiment of the day?
Brad Giles 01:38
That’s what we advocate people do. So mine is performance. Now why? Because we have just finished the Olympic Games who bought that the 2020 Olympics would be done. But yeah, performance we’ve seen performance. I know Australia has done quite well only because it’s my country. But there’s a big focus on performance for myself. And it’s, I guess it’s a global arena. That highlights where people focus on performance. What’s your skin?
Kevin Lawrence 02:15
Oh, by the way, I think Canada did pretty well in the games, too. I think we did quite well, I was the best that we’ve done in a while I think I haven’t been up on it. last few days, I’m mine. My word of the day is normal seat. So it was on an airplane last week, and went to take an actual meal trip to another place on an airplane in airports and hotels and tourist attractions, that kind of stuff. And then even today back into a sports car group. And we had a little mini car rally today with a bunch of people. And it was just, it was great to be back on the whole bunch of things with humans. So a little bit of normalcy, hoping it stays that way.
Brad Giles 02:57
or so. Awesome. Yeah, I think I think just quickly, I think that Canada got seven gold medals and 24 medals overall. So that’s quite a good outcome.
Kevin Lawrence 03:08
Well, within Australia get 17 gold and 46 medals overall. So Holy
Kevin Lawrence 03:15
yes. Similar populations.
Brad Giles 03:17
Yeah, East similar episode that I didn’t mean to bring that up. Sorry about that.
Kevin Lawrence 03:21
I am well, you know, and that’s good. I set myself up there and waiting to go the fact spread. So smart goals we’re talking about today. And it’s and it’s something that it shocks me how smart people are when it comes to goals. It’s it is mind blowing, actually, and incredibly smart, educated experience, executives and leaders come up with these mushy, squishy, and smart goals all the time. And even when they understand that there’s, there’s something about human nature that gets in the way. And it’s something that we basically end up putting a lot of energy into, we have some tools to help to do it. So it’s a, it’s a real challenge for a lot of companies in teams. So to start a lot of talk about what is a SMART goal
Brad Giles 04:16
is it? Well, a SMART goal. It’s an acronym, an acronym, but what it does, and we’ll dig into what the acronym stands for in a moment. But what it does, is it helps you to set a target or a goal. That is I guess, that that is more specific than otherwise An example might be so we’re going to sell more stuff. You and I have both been in many, many meetings where many people put down goals or priorities that are not specific that are very generic. So we need to increase sales. And the obvious comeback is well, how much and by when. And then like, the person who’s making this statement kind of looks and thinks lemon really thought about that, but we definitely need it need to increase sales. So smart goals help us to be very clear about what it is that we’re trying to achieve. So that in the progress of the 13 week race or the year over the time period, that I we can measure it and be we know when we’ve crossed the finish line.
Kevin Lawrence 05:40
Yeah, it just makes it real clear what it is. And it’s shocking how a lot of times people think in generic terms, and they have good intentions. You know, one that I’ve seen in people’s personal life is I want to get healthier. While Isn’t that nice? Was it? Okay, well, I’m gonna work out more. Okay. And if you so so what does that mean? What does that mean? What does that so we’re all going to work out three times a week. Okay? What kind of workout? Are you going to? Do you know what I’m going to want to want one of my team members and Tim, he’s got his goal, his goals around sweating. I think he says he wants to sweat three times a week. Not workout, but you know, still sweating three times a week for at least 30 minutes. Because it takes into account a whole bunch of things, it means your body’s working really, really hard. That’s a certain type of workout. Go ahead, right? Or it’s summer. Or it’s or it’s somewhere Yes, or, or he went somewhere really hot, or he just came out of the sauna. But it is and whether it’s an activity goal, you know about that, or it’s a goal someone has around blood pressure or weight or who knows what, it’s just getting really tangible. And the more tangible, the easier it is to know what it is you need to focus on. Number one, number two was easier from a management perspective to hold people accountable or to hold yourself accountable when you get down to release something’s tangible.
Brad Giles 07:03
Yeah, yeah. So. So smart goals, or smart priorities are really, I guess, we would talk about it in the context of priorities, because KPIs are almost by their very nature, smart. So if I was a sales person, okay, I would probably have a sales budget. In other words, I need to sell 100 units. And that 100 units inherent in that would be a time period per month, or per week, or per year. So So in a way, it’s a little bit like the KPIs or working in the business. They’re kind of in their very nature set in a oftentimes, in a smart way. But the priority is to work on the business. That’s what we’re really big. That’s where I need to be smart.
Kevin Lawrence 08:03
As I said differently, you know, KPIs or performance indication, errors and metrics, whatever you want to call them. They are numbers by nature. Yeah, we’re goals generally are more likely to be projects. So numbers by nature are measurable, and they can be a bit messy. But goals or projects need a little bit of help. By nature, they’re good, intense, but they’re conceptual, rather than tangible. So So Brad, I know you did a little research on the history of smart goals. You want to share that and then we can dig into what they are and some examples.
Brad Giles 08:40
Yeah, so where did SMART goals come from they, they were developed by a chap called George Doran, Arthur Miller and James Cunningham in a 1981 article, there’s a s m AR t. y way to write management goals and objectives. So it’s very closely linked and with Peter Drucker’s management by objectives, so so he refers to the SMART goals as well. And it very much comes from that very popular school of thought. And so then, I’ve heard before that there are about 81 different ways to write the acronym smart, you could set start with specific or you could use targeted or time based. So these are the ones that that, in my humble opinion, are most popular. But really, there there are some similarities. So let’s just quickly go through them. If you like.
Kevin Lawrence 09:51
And before you before you mentioned Drucker’s management by objective. Yeah. And when we look at leadership’s you know, leaders or CEOs or execs, that is The one gap a lot of them have with their people because their people are hard to manage, they’ll say or they drive them crazy. And time and time and time again, what do we do? We start and set objectives. Because end of the day, how I feel about Fred on my team is interesting. But how did Fred produce versus his goals? And how did he do on his operational metrics. And when you start managing by objective, takes a lot of the emotion out of it starts with a little more facts behind it. And at the end of the day, it makes it more constructive conversation with someone like Fred or easier to have conversation, because it’s about things happening or not happening, versus maybe how you feel. And you know, you might not even be justified to have a conversation about how you feel. But when it’s around objective, it’s the thing that’s supposed to happen is less personal, it just, it makes it a lot easier to lead and manage people and for them to know, their marching orders to.
Brad Giles 10:55
Yeah, it introduces a third element to the relationship. I like you, Kevin, but you know, you’re only doing 50% of the stuff that you’re supposed to do to retain your position. And that’s a problem that we got to work through. And so that’s a very different conversation to only it being the two of us. And I don’t think that you’re doing the right thing. In that sense. It, it introduces that important third element. So let’s perhaps go through them, Shall we do it Pacific is number one s smart, specific. So they need to be these priorities need to be specific and narrow for more effective planning.
Kevin Lawrence 11:41
So Rob, we can’t be wired. Yeah, it just it needs to be very pointed at something. And often they will have words in there like all or every or things like that, which are danger words, to improve all things, or everything is almost statistically impossible in a lot of cases. So it’s specific narrowing down on something.
Brad Giles 12:03
One example is I’m sorry, one example is software project. So in a person’s priorities, they might write the new Salesforce project. And that’s it. And it’s, it’s, that may be way too wide, or way too big relative to the timeframe of 90 days.
Kevin Lawrence 12:23
Yep, exactly. second one’s measurable, and basically define the evidence that will prove you’re making progress, and have completed the goal. This is the one that I am a big stickler about. It’s what’s the number and I always say, what, what number can we put in here, that would make an accountant happy, because then they can know for sure if it’s happening, or not happening, it’s not just story, it’s a statistic. This is critical. So it’s, you know, no sweat. By working out at the gym, three times a week for at least 45 minutes as an example of exercise sales. It would be, you know, a measurable would be to sign contracts with for new clients to a value of a minimum of $2 million per contract. Right? And then there’s the dollar value in there. There’s also whether it was signed contract or an invoice contract all these little details that really help you to get a measurable.
Brad Giles 13:30
And yeah, very simple. The simple thing that I say is, how do you know when you’ve crossed the finish line using a metaphor of a rice? Like, because we if we don’t know, we don’t know, we can look at the gold medal tally, and know exactly where country rates? And so the simple, quick and dirty that I use with teams is I say, so. Does your priority have a number or a percentage on it? Is it measurable? Because if it doesn’t, we’ll let’s put it and I would be as picky as to say rather than finish the project 100% complete is what I would encourage them to write
Kevin Lawrence 14:12
it right when and I will add in things sometimes like presented to the Board or approved by the board or presented to the executive team or approved by the executive. The fact that you wrote your report is interesting, did it get approved, because maybe the approval is good or presented to the Board and funding secured? Right, like whatever the final line, you want to cross this measurable piece and I find generally, there often needs to be two or three or four specific, tangible things and it’s like, I’m going to get the gray, whatever it happens to be to weigh under 72 grams and make maintain the quality of at least x, whatever it happens to be this, you generally need to add quite a few clarifying things. Because also what happens is three months or a year later, you sit back and look at it and you forget what it was. Yeah, like I’ve learned, for example, after doing this, so many times the, when it comes to revenue, invoiced versus signed are two very different things. The contract signed, versus the invoice sent to a client, those are drawn in some businesses, that can be a lag time of an hour, or it can be a lag time of two years. Yeah, depending on so that that that detail there when you’re talking about sales. The other piece is all sales aren’t created equal. We’re gonna ale sign those clients for $2 million each. Okay? At what margin, because not all sales are created equal. So anyway, there’s all kinds of other things we can get into lots of details, but being really specific will being measurable.
Brad Giles 15:56
And the last thing about measurable is that you can track its progress through the period. So if you need to sell 130 widgets in the next quarter of 13 weeks, that means that you’re going to have 10 widgets per week, on average being sold. So at the weekly meeting, you can report to the team on the progress. If it’s not measurable. What do you talk about it? The weekly meeting, it’s is
Kevin Lawrence 16:26
an opinion fest is going great.
Brad Giles 16:29
Kevin Lawrence 16:29
it’s going awesome. And the last thing I’ll say a measure, well, we gotta we’re gonna move along over there. We’re trying to do a little quicker episode here today. Is the other thing I’ve measurable, just slipped on my brain, it was really good. Brad, it was one of those things, it was measuring the whole, it’ll come back and come back. The key is, is being crystal clear. And making it easier for people to know what great looks like, so they can help themselves and their teams to lead towards
Brad Giles 17:00
Oh my god, I’m so excited about the next one. achievable. Oh, my God, it is achievable. Yeah. So here’s what we’re gonna do, we’re gonna build a new electric car with no experience in the next 13 weeks, and it’s gonna be awesome oil. And everyone gets super excited about that. And they’re high fiving, they’re pumping each other on the back of the back. And then we get 10 weeks in, there we go. And you know what, like, maybe we set the bar a little bit too high.
Kevin Lawrence 17:34
And we didn’t even get government approval to test one nevermind, build one, you know, or whatever. And, and so this is a part of the achievable sometimes we work on action plans, in our meetings, we’ll build a 10 2030 point action plan. And you’ll notice things that are time sensitive, or dependencies. And it also helps you to lock down the achievability because you realize some things just aren’t possible. But the achievable one is big, because that’s why we have things where people will say all and every, yeah, we’re going to fully implement the RP system this quarter. Like hell you are, what specifically Will you absolutely get done will be this year piece taken a couple years to implement normally, because there’s a whole you know, but it’s Is that possible? Or, you know, we’re gonna land for new clients at 2 million bucks apiece. Great. How many did we land in the last year? Yeah, none. Okay. Or we’re gonna do it a gross margin of 48%. Okay, what’s our mark? Gross Margin? No, 32? Well, no, that’s not possible. Like, there’s a build, even if it could be possible. It’s, is it realistic, and, you know, where people when I was younger, and a lot of youthful exuberance, you know, we often would set stretch goals, and really push yourself too hard. But that sets up as organizations get larger for a lot of failure. So is it is good to stretch, but is it actually seriously achievable. And sometimes your best to talk to some people on your team to really get a reality check on it. We also have in meetings, a cooling off period of 48 hours. Because sometimes people get excited and over committed to meeting because they feel pressure or just enthusiasm. And then they get a reality check. So within 48 hours, you can come back and make a change. Because we like to give people time, so we don’t over commit because you’re going to be held accountable. Yeah,
Brad Giles 19:27
I do a very similar thing I would say you’ve got between now and the first weekly meeting, to stress and test your ideas to make sure that we’re going to go for 100 we’re actually going to go for it because I learned a little bit of stuff to tighten up that stuff. But it’s let’s say it’s within the ballpark at the end of a planning session. And I guess the only other thing about achievable is people will sometimes say when they have failed at the end of the quarter about the previous quarter. Yeah, look, I just didn’t I just didn’t really realize I had as much time as I did, like I thought I had more time to devote to this and my team took all this time away. So it’s got to be achievable within the time period. Right? And, and, and give yourself a bit of grace in the early days, because you get, you get to better appreciate this, the more that
Kevin Lawrence 20:19
there was, there’s achievable based on the forces of nature and resources, that is achievable in your schedule. Anyone and when people are taking vacations or other things that are going on, so when shapeable content concerning everything in the environment, alright, so that’s what we got specific, measurable, achievable. Now we’ll go to the are in smart, which is relevant, basically, do they matter? Like, does it relate to your long term goals? Does it fit with your values and your culture and what you’re about, if you have a big we’re at an event today. And we were doing an environmental tour. And we’re we went through a bog called burns bog near where we live, and learning how bogs are created, which is like a wetland. And, and, and we went on, there’s a lot of stuff about wetlands today, it was quite fascinating this event, but the long story short is, you know, as someone was saying, you know, here we are driving around in sports cars, which is the other spectrum of the environmental world. And then this beautiful woman was walking us through and teaching us all about wetlands and rehabilitating wetlands and how it’s good for the world and the environment. And we’re driving gas guzzling cars. And it sort of say, that’s, you know, in many ways, it’s almost kind of funny, it’s almost like a values conflict. You know, and, and I care about the environment stuff. But it’s almost like if you’re, you know, if you’re a real strong environmental company, you know, buying or setting up something to start burning fossil fuels, you’ll may not fit, it’s not relevant, even though it could be a good business idea. It may not be relevant for your culture, it could be a conflict with what you’re about as a company. And then there’s ones where goals, just, people get excited about it and have pet projects, but they actually don’t fit into the strategy. Yeah. And that’s why we have our top three or five priorities for a three year time horizon, and a one year and a quarter. But it better darn well fit into what we want to make happen in the next three years. Otherwise, it may not even though it’s your pet project, it may not be relevant enough to even be on the list.
Brad Giles 22:22
Yeah, I met with a CEO recently. And she was saying how, how her biggest problem is that she had these eight areas of opportunity. And she was overwhelmed because she didn’t know where to focus, which is kind of relevant, irrelevant. Okay. And that. So what we did then is we focused in and discussed the hedgehog, we discussed what we’ve spoken about the hedgehog on this podcast from Jim Collins before, we discussed the hedgehog, how it works. And she pretty much eliminated about four or five of them to focus on the things that really matter. So when building your smart priorities, they’ve got to be relevant to your, your overall company values and goals and long term objectives.
Kevin Lawrence 23:16
Yep, not maybe not just you or someone’s pet project, okay. And then finally, the T in smartest time based, just a realistic time. Now normally, in the methods that we use, most goals have a quarterly rhythm, it’s makes it simpler. So most of our priorities, it’s based on the 90 day rhythm maneuver, our firm and lots of our clients run on a calendar year. So that this quarter that we’re in is July, August, September, which means at this point, we have about two months left little less than two months left. And by default, it’s by the end of September is us is the starting point. Now, we might sequence them and have them at different times, but a clear deadline of when you are going to aim to have a complete and it helps that’s why we do quarterly goals is you’ve got you know everyone crams for the exam leaves their homework till the end. But really at the end of it, it’s when we do coordinate because you have four times a year you cram for the exam, you might do some monthly goals or even weekly goals to help move progress more often. But the point is a deadline to help you stay focused. So you can be creative about getting it done more quickly, rather than letting it dry.
Brad Giles 24:29
And maybe it relates to other people’s priorities as well. Maybe someone else has a goal or a priority for the quarter that’s relying on what you’re doing. So you’ve got to liaise with them to make sure okay, so I’ll get it done by week four, so that you can get yours done by week 12 or whatever it is. But it must absolutely must have a date on a priority. It must have a number and a percentage and a date. If it doesn’t, then that’s the question you’ve got to ask.
Kevin Lawrence 24:58
Yeah, and so that’s it. I’m gonna show them both. I have another example, we’ll wrap this one up. But there are Specific, Measurable, Achievable, Relevant and time based. I just had a flash of a meeting I was in. And in one of the companies that we work with, we review company level goals and department goals, right? Each of the there’s like seven or eight key departments. And we review those every quarter, we set them every quarter and review them. And I remember being in a meeting when I was, you know, probably like 18 months ago. And as we went through this, we saw and reviewed the department goals and one of the department, their goals weren’t smart. And everyone’s going through and you can feel the tension in the room. People are like, Ah, you’re saying you’re 87% complete? Like, yeah, I’m not buying it. But I can’t challenge you. Because there’s nothing there to challenge against. It was their opinion that they were 87% complete, there was no way to have an intelligent conversation. And I believe they worked hard. And I believe they did some good work. But the goal was much and it was very, very hard to do anything constructive with it for them or for us, because there was the measuring stick was non existent.
Brad Giles 26:09
Yeah, it’s like, go back to the Olympics. Imagine being at the Olympics, when there was no definition of when you crossed the finish line. Yeah, like, you absolutely need that. And you need the time to know how other people are performing. Yep. So awesome. What a good chat around SMART goals today. And a quick note, our next two episodes are going to be about how the best leaders hold people accountable. So how to create a culture of a culture of accountability. So do look forward to those ones. So let’s do a super quick summary here. Often the problem is goals aren’t smart, they don’t goals or priorities. They don’t clearly state what needs to be achieved. That leads to poor execution. So they need to be Specific, Measurable, Achievable, Relevant and time based. Kevin, would you like to close this out, please?
Kevin Lawrence 27:11
and it’s a very smart thing to have smart goals. And the truth is, it makes your life and their life he’s not cheesy as an awesome, but it makes your life in their life better, because it’s crystal clear what greatness looks like in their world and what they must achieve. And it’s crystal clear for you as a manager, because you can have conversations, how you doing on the five things you said are so important. And because it’s mathematical, the measurements, you don’t have to have an opinion fast, and you have a lot less tension. So basically, in many ways, it’s like having lines on the highway and speed signs on the highway. Everyone knows what to expect. And it makes it a heck of a lot easier. So be smart. Help your people be smart. That’s kind of what we’re here to help you. And if you’re already doing it, congrats and if not, if you need a tune up, just tighten it up. So let’s say want to wrap this up there, Brad. Okay.
Brad Giles 28:01
Thank you for your time today. We heard that you’ve gotten very about smart goals. As always, this is the growth whispers and I’m Brad Giles. You can find me at evolution partners.com.au. Kevin, you can find out Lawrence and co.com. And of course if you are so interested, this is on not only podcasts, but also on YouTube. So do have a good week and we look forward to chatting to you again next week. Take it