Setting SMART Business Goals - The Outsourced Accountant

Setting SMART Business Goals

Creating smart business goals is important for team members to understand their roles in the organisation. When they know how they can contribute to its success, they will grow with the company and have a higher engagement in their workplace.

In 1981, consultant and former Director of Corporate Planning for Washington Water Power Company George T. Doran published his paper in the November issue of Management Review. His work called There’s a S.M.A.R.T. way to write management’s goals and objectives laid out the main principles of effective goal setting that executives around the globe have been following.

According to Doran, a goal should be 5 things:

  • Specific

The first step towards attaining your goal is defining it as specific as possible. Use what, where, and who as a guide: What exactly you want to accomplish? Who will be involved? Where will it be done?

Use concise, explicit terms so that anyone can clearly understand it. If possible, incorporate action words like direct, organise, coordinate, lead, develop, plan, and build to drive people to take a plunge.

  • Measurable

How will you know when you’ve reached it? How do we know we are done? A goal needs to have parameters in order to keep track of progress and measure the outcome. You can use quantitative scales since numbers are essential to a business. Likewise, you can use qualitative criteria to describe a certain result (i.e. hit or miss). Also, make sure that your goals can be broken down into a manageable set of actions so it will be easier to evaluate.

  • Achievable

A goal needs to be doable and realistic. Ask yourself the following questions: Given the situation, do you have the time and resources? Is it within your ability to accomplish it? Do you have control over it?

However, it should also be challenging enough to stretch the outer bounds of what is attainable. Keep it reasonable that you can identify the expected outcome, yet assignable that it allows for collective effort.

  • Relevant

Why is this goal important to you? Is it consistent with your bigger goals? Your goal should tie into your key responsibilities and align to your objectives. It should have a positive impact and should aid in achieving your higher level business unit goals.

Your goal should be worthwhile enough to support your company’s mission. It should matter to your boss, your team, and the whole organisation so that everyone will be driven to attain it.

  • Time-bound

A goal without a deadline is just a dream. A time-bound goal answers the ultimate question when?Therefore, you should set definitive target dates in order to establish a sense of urgency. A detailed timeframe helps you get motivated in completing your goal. Without it, there is no “internal” pressure to finish it and, with unavoidable circumstances that may arise, it can end up on the back burner.

Ultimately, having a dual perspective – keeping an eye on what you’re doing today and looking at the bigger picture of tomorrow – will increase your focus towards achieving your long-term aims.

The Outsourced Accountant supports Australian and New Zealand accounting firms by helping them understand and implement outsourcing solutions to help them become more proactive and truly add value to their clients. If you want to know more about outsourcing, call us at 1300 896 522/0800 452 853, and download our e-book.


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