The four areas that SMART Goals in your business are needed for are:
1. Revenue. Determine a solid revenue goal for the next twelve months.
2. Profit. Employees need a profit goal to guide them.
3. Customer Service. I highly recommend using the Net Promoter Score here. It’s the single easiest way to measure true satisfaction.
4. Employee Satisfaction. I also recommend using the Net Promoter Score for establishing the benchmark for employee satisfaction as well – one number from one easy question.
For each of these areas, leadership needs to determine a goal for each area. To ensure that the goals they come up with are SMART, I use these guidelines to help me (mine feature a slight variation on the popular business acronym):
S – Shared – Sharing goals with a coach, mentor or team member adds a little extra pressure to hit them. I even share them with suppliers and clients.
M – Measurable – Put a number on each goal so you can easily say if the goals were hit or missed. Make the goals clear. Hazy goals produce hazy results.
A – Attainable – Your goal has to be remotely possible for it to be included.
R – Relevant – Ensure that all goals are worth working on.
T – Time-based – Put a date on goals if they’re due before December 31st.
Once you have the goals set and the team is committed to hitting them, the next thing you need to do is discuss boundaries. That is to say, yes, you want to hit these goals, but to what extent? Would you work 90 hours a week to hit them, or at maximum, 45? Would you give up equity in the company to raise money to help you hire people to hit the goals? What won’t you do?
Here are some example points that are worth discussing while you create your own list of boundaries:
· Amount of debt you’ll take on
· Number of hours you’ll work
· Number of days traveling you’re willing to put up with
· Percentage of profits you will share, 0-100%
· Percentage of equity you will give up in the company, 0-100%
· Will you complete any acquisitions? If so, how many?
· Would you fire ‘C’ or ‘B’ players? When?
It’s critical to have the discussions in advance. Boundaries are like values–you can’t compromise them to win.