How do you set goals in your organization today? Surely by now we all define our goals according to the guidelines of SMART (Specific, Measurable, Attainable, Realistic and Timely), so everythings great right?
What if I told you that SMART goals are self-limiting? What if I told you that if you insist on defining SMART goals that your business will not achieve its potential and is at risk of being disrupted?
Let me explain.
Under conventional wisdom, we spend lots of time defining goals that we believe are ‘stretch’ goals, but that we are certain are attainable if our team achieves their potential. We define specific measures, set the bar at what seems like realistic and attainable heights (but just far out enough as to require us to perform at a high level to attain them), and then we set our team free to deliver on those goals.
Think of the types of goals you set for your teams today: achieve year-over-year sales growth of 10%; deliver cost savings from reduced waste or spoilage of 10% in the current quarter; increase our sales pipeline by 20% within 12 months. Sounds reasonable right? Even without knowing what business or industry these are taken from they seem like reasonable goals on the surface.
These are also the same types of goals that folks like IBM used for their mainframe sales team, that GM used in it’s manufacturing lines, or that Yahoo! used for its search sales team.
The problem is that their competitors set goals like: reduce the cost and size of a computer by 90%; deliver productivity gains of 80% within 6 months through reduced slack and through implementation of Just-In-Time delivery; index the entire internet within 12 months and deliver search results against that index with less than 0.5 second response times.
According to the SMART goals structure these goals seem incredulous. Who could have possibly imagined a way to reduce the size and cost of a computer by that much – it would have to be significantly less powerful and couldn’t possibly meet the needs of the current customer base! Who has ever heard of 80% productivity gains in a half year? Surely there isn’t value in indexing every page on the Internet – most of it doesn’t have value itself so why should we concern ourselves with low quality content?
History would demonstrate however that folks like Altair and Tandy were able to fundamentally change the face of computing, Toyota was able to deliver on its commitment to efficiency while maintaining quality (and turning the North American car market on its head), and Google was able to completely change the way with think about information and data.
SMART goals drive incremental gains. Surely we can increase our sales by 10% just by improving our closing script or by improving the quality of our leads marginally. 10% savings in spoilage should be a breeze just by improving training and tightening quality standards and monitoring. 20% more sales pipeline can be easily achieved through increased marketing efforts (and doesn’t necessarily translate into revenue or profit anyway).
Radical goals fundamentally change the conversation. Once you set a radical goal for your team or your organization people are forced to stop and rethink their approach completely. Incremental gains and traditional approaches won’t get you there so it requires you to throw out conventional thinking and start from the ground up.
I would suggest if you want to be the leader in your industry and have an opportunity to disrupt your competition you should change the way you think about SMART goals to the following:
S – Specific
M – Measurable
A – Audacious
R – Radical
T – Thought-Provoking
I leave the first two letters the same because I believe that the specificity and measurements help people to quickly understand that given the radical targets that they can’t possibly attain them through their old methods, but lets forget about achieveable, realistic, and timely and start thinking about audacious, radical, and thought-provoking.
After all – if you shoot for a 90% reduction in cost or a 250% increase in sales and only get halfway there, you’re still significantly further along than if you’d targeted 15% or 20% and actually achieved your goals.
Think about your organization today – are you driven by any radical goals?
Tim Empringham, MBA
Tim Empringham is a passionate advocate for Innovation in organizations of all sizes as a mechanism to drive growth, create uncontested market space, create new customer value, and drive efficiency into the internal organization. His focus is on disruption of thinking and markets through integrative thinking, structured Innovation frameworks, and leadership development of Innovation and Change leaders within the organization.