By Jim Hingst
Every
business has the same ultimate goal: to generate a profit for the investors. That
prize, however, is contingent on achieving other goals which focus on key
business activities, such as generating sales leads; increasing revenue (sales);
reducing shop and administrative costs; improving productivity and delivering
high quality products and services.
Establishing
unambiguous goals and communicating these to your associates provide them with
direction and motivation. When workers know what is expected of them, they can
concentrate their energy and talents on achieving their goals.
Setting SMART Goals.
The SMART goals protocol has become
a widely-accepted business model for establishing goals. SMART, which is an
acronym for Specific, Measurable, Achievable, Relevant and Time-Bound, provides
a guideline for writing a concise set of goals for your shop.
Specific. Goals
must be specific, not general. Increasing profit, for example, is so general that
it provides no target for employees to aim at and shoot. In contrast, by
describing your goals in tangible, quantifiable terms, your employees should
have no questions of your expectations.
Examples of specific goals
include increasing annual sales by $250,000, reducing scrap rate by 10% or
generating 50 qualified sales leads each month.
Measurable. A
second key in establishing goal is that it should be quantifiable or
measurable. You have probably have heard the business maxim that what gets
measured, gets managed. That is not necessarily so. A more accurate adage might
be: If you want to manage something, you need to measure it first. Management requires
establishing benchmarks and standards for gauging progress.
Here’s why. When you measure
results against a performance goal or standard, you impose accountability on
your organization. A light is shined on employees, who are assigned specific
tasks. If something doesn’t get done, you can coach your employees on how to
improve their performance or you can take other corrective measures.
Achievable. The
English poet, Robert Browning, said that “a man’s reach should exceed his
grasp”. This is important because if the goal is not challenging, it would be
exciting enough to motivate you or your associates.
As a manager, involve your
employees in setting targets, such as increasing annual sales by 15% or reducing
shop and administrative costs by 10%.
At the same time, you should
not set the bar so high, that you couldn’t possibly achieve it. Setting unrealistic
goals for your associates can be counterproductive. Instead of motivating your
workers, you could demoralize them.
Relevant. Your business goals should be directly related to the overall objective of your organization.
In my opinion, there is only one ultimate goal for any business. This is to
improve the bottom line. All of your other major business goals in sales, marketing,
production and administration should move the needle to this end.
Time-Related. Your business goal needs to stipulate an end date. Without an end date, there is no sense of
urgency. People tend to procrastinate and kick the proverbial can down the road.
The Importance of Written
Goal.
If you are serious about
your business goals, you will take the time to write them down. The fact is that written
goals are more often achieved than those which are spoken.
The act of writing forces
you to think critically about your objective and ascertain its importance or relevance
to your business. It doesn’t matter that you may not have a plan at first. If
you are clear about your destination, your mind tends to move in the direction
of the target.
If your goal is written, you
are also more likely to review it. That review process encourages you to
develop a plan of action and a timetable for achieving the goal.
When you formulate a goal
and write it down, you create a destination to focus on. Your mind naturally begins
to filter out the extraneous information that does not support your goal. At
the same time, you unconsciously accept the information that supports you goals
or validates your beliefs.
This is why people tend to
become what they think about most the time or achieve the goals that they focus
on. When you focus on a destination, you may not initially have a map on how to
get there. Instead, you move in that direction and gradually your mind begins to
formulate a plan.
© 2021 Jim Hingst, All Rights Reserved