The Importance of SMART Goals in Management

While the concept of setting goals seems straightforward, it can be challenging for leaders and managers. SMART goals are often confused with SMART objectives, but they have distinct differences. Goals are typically long-term, while objectives are usually short-term. Both must adhere to the SMART criteria.

Understanding SMART Goals and Objectives

Specific. A specific goal defines an observable action, behavior, or achievement. It should also include a rate, number, percentage, or frequency for better clarity.

Measurable. There must be a system or method for tracking and measuring the specific actions or achievements the objective focuses on.

Assignable. Objectives should be structured so that individuals can realistically achieve them. They must also be clear and delegated properly within the team.

Realistic/Relevant. Employees must view the objectives as significant to the organization. It's crucial that they feel they can influence or change the outcome.

Time-related. Every objective should have a specific deadline for completion, such as a particular date or timeframe within which the goal should be reached.

Specific

Measurable

Assignable

Realistic/Relevant

Time-Related

Examples of SMART Goals in Action

For instance, consider a construction company aiming to build a new home. While "building a home" may be a goal, it lacks specificity. A clearer goal would specify whether it will be a single-family home, multi-family dwelling, townhouse, or condo.

The measurable aspect would detail that it needs to be a two-story building with three bedrooms and two bathrooms. Such a project is assignable to the construction team, realistic in terms of demand, and time-related, requiring completion within a year.

Setting Personal and Professional Goals

Another example can pertain to personal development goals, such as becoming more punctual at work or school. This goal is simple but important. It can be made SMART by specifying the steps to achieve punctuality, measuring improvements in attendance, assigning goals to oneself, ensuring that the need for punctuality is relevant, and setting a timeframe for improvement.

Benefits of Implementing SMART Goals

1. Clarity and Focus: By clearly defining goals, teams can focus their efforts on what truly matters.

2. Motivation: SMART goals can motivate team members to achieve their objectives by providing them with clear benchmarks.

3. Enhanced Performance: With measurable steps outlined, it's easier to track performance and adjust strategies as needed.

4. Improved Accountability: Assigning specific goals enhances personal accountability among team members.

5. Long-term Success: When goals are realistic and time-bound, they contribute to the long-term success of an organization.

   
   

In summary, SMART goals are instrumental in shaping the strategic direction of an organization. When challenges arise, revisiting these structured goals can help management stay aligned with their overall objectives.

Conclusion

SMART goals set the foundation for all initiatives within an organization. They clarify expectations and drive performance. By adhering to these principles, teams can not only achieve their targets but also foster an environment of success and collaboration.

References

Zutter, S. B. (2019). Principles of Managerial Finance, 15th edition. New York, NY: Pearson.

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Meet Nikia Smith, the Project Management Consultant driving success at Business and Wealth Generations. With over a decade of advisory expertise, Nikia orchestrates strategy and operations, spearheading growth and innovation. Beyond his professional endeavors, he actively participates in his community, having served on the Board of Directors at the Project Management Institute Florida Suncoast Chapter in various roles for several years. Recognized for his contributions, he received the PMI Florida Suncoast Chapter Award in 2018 for significantly boosting membership and retention and was also selected to attend the 2019 PMI North America Leadership Institute Meeting in Philadelphia.

Nikia holds a bachelor’s degree in management and organizational leadership focused on Project Management, alongside several business certificates from St. Petersburg College. He is also certified in CAPM and PMP by the prestigious Project Management Institute. For collaboration opportunities, reach out to Nikia at info@thebusinesswg.com.

Addressing Strategy: Developing a Worry List

Leaders and managers set the stage for their organizations during the strategic management process. As Benjamin Franklin once said, “If you fail to plan, you plan to fail.” But having a plan in place does not mean that there aren’t areas of concern. Areas of concern can live in your mind rent-free, not just professionally but from a personal point of view as well. Leaving areas of concern in one’s mind can become complex and get complicated, if it goes unchecked and undocumented. An effective method to address or “check” these areas of concern is to create a “worry list”. Yes, that is correct. In simple terms, make a "worry list". After leaders and managers develop or refine their vision, mission statement, objectives, and strategy, naturally they think about relevant scenarios or obstacles that may hinder their pursuit towards their stated vision, mission statement, and objectives.

Compiling a “worry list” that sets forth the strategic issues and problems a company faces should embrace such language as “how to…”, “whether to…”, and “what to do about…”. The purpose of compiling a worry list is to create an agenda of items that need to be addressed in crafting a set of strategic actions that fit the company’s overall situation (Thompson, 2020-2021, p. 98).

There are several methods a leader or manager can approach the task of creating a worry list. During this discussion, we will focus on the most effective method by means of focusing on the organization’s internal and external environments. This information can be derived from the SWOT analysis, or the opportunities and threats. Getting a good understanding of what obstacles or competitive challenges stand in the way, figuring out the organization’s problems or shortcomings that need to be addressed, determining which of the obstacles or competitive challenges block the organization’s ability to improve their competitive position in the market and boosting their financial performance, establishing relevant combination of strategic actions that will offer and position the organization in the best path to competitive advantage, and analyzing exactly what specific problems or issues warrant first priority attention by leadership developing strategic actions in the future. Each level of management has a role to play in ensuring that all of these align with the organization’s vision, mission statement, and objectives. This is important to designing a strategy that best fits and moves everyone towards the vision of the organization.

It is further stated, "a strategy is neither complete nor well matched to the company's situation unless it contains actions and initiatives to address each issue or problem on the "worry list" (p. 98).

What does a “worry list” look like then? See one example of a "worry list" shown in Figure A below.

Figure A. Example - Worry List for XYG, LLC

Bear in mind, there’s no right or wrong way to design or refine a "worry list". Worry lists can be developed in a Word document, a slide presentation, on a whiteboard, on a department's bulletin, or using other software and methods. The key is to make it simple and clear as if someone new reviewing the list can understand it. They can be simple, or detailed. I would not recommend it becoming so complex to where a good strategy cannot be formulated. In other words, you don’t want to worry about the “worry list”. The "worry list" should serve as a reference for leaders or managers to help prevent a strategy from going off course. And, if or when it does, they can look to the "worry list" for redirection or guidance.

So, when crafting a "worry list" think about as many potential areas of concern or scenarios as possible. It is better to identify and document early-on or as the strategy is executed it provides more or better information that can be addressed. As a result, leadership can focus on the task at-hand and be sure they have captured what needs to be addressed to ensure the strategy is not off course or can get back on track. It does not serve a leader or manager to constantly think about the same thing if or when they have already identified the root issue. During the upcoming strategic planning session, whatever needs to be addressed can be addressed with the appropriate solution(s). This is a useful tool for both professional and personal scenarios.

References

Thompson, A. A. (2020-2021). Strategy: Core Concepts and Analytical Approaches, 6th Edition. McGraw-Hill Education.

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Meet Nikia Smith, the Project Management Consultant driving success at Business and Wealth Generations. With over a decade of advisory expertise, Nikia orchestrates strategy and operations, spearheading growth and innovation. Beyond his professional endeavors, Nikia actively participates in his community, having served on the Board of Directors at the Project Management Institute Florida Suncoast Chapter in different roles for several years. Recognized for his contributions, he received the PMI Florida Suncoast Chapter Award in 2018 for significantly boosting membership and retention and was also selected to attend the 2019 PMI North America Leadership Institute Meeting in Philadelphia. Nikia holds a bachelor’s degree in Management and Organizational Leadership with a concentration in Project Management, alongside several business certificates from St. Petersburg College. He is also certified in CAPM and PMP by the prestigious Project Management Institute. For collaboration opportunities, reach out to Nikia at info@thebusinesswg.com.

Strategy: A Pathway to Organizational Success

Running an organization is somewhat intuitive. There are the norms of selling, purchasing, advertising, and so on. Operating an efficient organization is not so intuitive. There are certain fundamentals that must be respected, or an organization will not survive. We’ve recently discussed finance and an organization’s overall financial health. Alongside finance, is its counterpart, strategy. In this blog, we will discuss strategy and why it is important.

Strategy helps managers and leaders, organization’s senior leadership (C-level/Board) answer what the future direction of the organization should be, what the actual plan is for operating the organization and towards producing good outcomes, what performance targets (key performance indicators) they should set, and how the mission or objective will be executed. You can think of strategy as finances’ alter ego. Finance, at its worst, should support the organization’s strategy. At best, finance should increase the wealth and value of the organization’s owners and its stakeholders. Finance and strategy are ‘night and day’, so to speak, but together they display signs of good management to internal and external stakeholders of the organization. Management needs both for a successful outcome.

Figure 1.1 Good Management = Strategy + Finance

So, what is strategy? Strategy is the competitive moves and business approaches that managers employ to attract and please customers, compete successfully, pursue opportunities to grow the business, respond to changing market conditions, conduct operations, and achieve the targeted financial and market performance (Thompson, 2020, p. 2). Strategy answers the how. Crafting a strategy forces management to think about how they are going to capitalize on opportunities to grow their business, how the company will meet or beat their stated performance targets, how they will manage each management function of the organization (sales dept., finance, marketing, etc.), how they will beat rivals or compete with them, how to address business and financial decisions based on the ever-changing market and economic conditions in the best way, how to position the organization in the market in relation to competitors, and how the organization will attract and satisfy its customer base.

Strategic plans are the plans that management departments or managers craft their operational plans around. Marketing develops a marketing plan that supports the marketing components that address all marketing aspects of the strategy. This is applied to each management function of the organization: finance, human resources, etc. Managers and leaders document their strategies in several ways. Analyses such as the commonly referred SWOT analysis are used to craft strategies. Visual maps are an effective method. Strategy maps is the simplest method. Management will develop a strategic plan or even hire a consulting or advisory firm to facilitate their strategic efforts.

But, why is strategy important? It allows managers to be intentional towards their strategic and financial goals. A good, effective strategy shows a pathway to success…that can be measured and tracked for performance.

In conclusion, a strategy without a finance component is simply an idea (or a dream). And financing without an established strategy to achieve an organization’s performance targets can cause unnecessary spending, low profit margins, low employee morale, and/or a host of other problems. Successful leaders and managers monitor these financial and strategic targets on a weekly basis, to ensure the organization or division are on track to meet or beat quarterly performance targets during each quarter, or annually, for strategic and financial strategies to ensure the organization are pace to achieve the organization’s overall goals.

References

Thompson, A. A. (2020). Strategy: Core Concepts and Analytical Approaches, 6th Edition. McGraw-Hill Education.

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Meet Nikia Smith, the Project Management Consultant driving success at Business and Wealth Generations. With over a decade of advisory expertise, Nikia orchestrates strategy and operations, spearheading growth and innovation. Beyond his professional endeavors, Nikia actively participates in his community, having served on the Board of Directors at the Project Management Institute Florida Suncoast Chapter in different roles for several years. Recognized for his contributions, he received the PMI Florida Suncoast Chapter Award in 2018 for significantly boosting membership and retention and was also selected to attend the 2019 PMI North America Leadership Institute Meeting in Philadelphia. Nikia holds a bachelor’s degree in management and organizational leadership with a focus on Project Management, alongside several business certificates from St. Petersburg College. He is also certified in CAPM and PMP by the prestigious Project Management Institute. For collaboration opportunities, reach out to Nikia at info@thebusinesswg.com.