SMART Goals | By Andrew Cox | Read time minutes
One of the core competencies for leaders is the ability to deal with ambiguity, that condition where things are not what they seem. And the higher in an organisation a leader goes, the more ambiguous things become. Leaders know ambiguity is the enemy of commitment. They know it can't be eliminated. They know the majority of people work best in an environment where expectations and contribution and recognition are well defined.
Leaders know ambiguity kills initiative, it creates a compliance culture rather than an aggressive commitment culture. It keeps people off balance. It enables weak managers to protect whatever turf they may have. Ambiguity is the friend of the indecisive, the maybe yes maybe no mindset, the uncommitted.
Reducing ambiguity is a goal of successful leaders.
But reducing ambiguity is a real challenge. As leaders become more skilled and successful at dealing with ambiguity, it can become more difficult for them to recognise how critical it is to their people to have a clear understanding of what is to be accomplished. Why? It's the Curse Of Knowledge at work. That condition, defined by the Heath brothers in their book "Made To Stick", says that once you have a piece of knowledge it is almost impossible to think or act as if others don't have it as well. The Curse includes skills. Once a skill is gained, it becomes hard to act without assuming that same skill exists in others.
So this tug of war is at work. While leaders develop the skill and ability to operate successfully in highly ambiguous situations, at the same time they need to work to reduce ambiguity for their people.
That's where SMART goals come in. SMART stands for specific, measurable, attainable, realistic/relevant and time framed. The establishment of goals based on these criteria reduces ambiguity and creates a climate for commitment.
What follows is a story from my experience that illustrates how critical SMART goals are to reducing ambiguity and increasing the chances for success.
I worked in a large, multi-national company with a small corporate staff, a really flat organisation. While there was a lot of financial oversight, there was also a lot of operational freedom at the business unit level. The relationship between the business units and corporate was clear, make your numbers and we'll leave you alone. Fail to make your numbers and close control and changes in business unit leadership will occur.
A critical part of the relationship between corporate and the business units was in arriving at annual budgets and objectives. The corporate people were convinced that the business unit level people were holding back to earn maximum bonuses for their organisations, and themselves. The business unit people were convinced that the corporate people were trying to suck them dry. Both had reason to believe as they did. In that ambiguous situation the annual budget dance was played out and resulted - sometimes smoothly, sometimes not - in a set of financial goals for each business unit.
One division President I had to work with considered the budget to be his organisation's goal, it's only goal. He and his controller developed the budget based on what they thought would fly at corporate. It was the equivalent of throwing a whole lot of balls in the air and then trying to run under all of them. In this business unit, once the budget was approved no further goal setting was done as a means of communicating that budget's requirements. As a result, his business was a complete compliance culture. "Tell me what to do and I'll do it" was a phrase heard often in his business. He lasted three years - never made a budget - and was fired.
In another business unit I had the good fortune to work with a division President who was committed to involving all his functional heads and their direct reports in developing the budget. All the opportunities, problems and issues were put on the table. By the time the budget was ready to be presented at corporate all the functional heads in his business unit knew what was in it, had participated in defining the numbers and had agreed to it.
In this business, the goal setting process started during the development of the budget. The key goal setting question was "What are the top three to five actions that must be taken to ensure exceeding the budget?" Every functional head asked that question of their people. SMART goals were developed at all levels. The result was a goal driven culture with people knowing what were the important few goals they needed to work to ensure success.
Regular performance to goal meetings were held, adjustments made, no surprises allowed. It was a very demanding place to work, but staff turnover was almost non-existent. That division exceeded its budget for five years in a row and the division President was promoted to Group Executive. There were many ambiguous situations that required work, but the top three to five SMART goals kept everyone focused on the important few.
There were many factors that contributed to the success of that business unit. But it started with the leader. He took the potential ambiguity of budget setting and turned it into a clearly defined process that involved input from the the experts. Then he turned the abstraction of a budget into a set of operating elements that could be defined, measured and reported on. He used SMART goals to do that. And the very human tendency to bite off more than could be chewed was controlled by insisting that the goals be limited to the three to five most important, at all levels of the organisation.
The one addition the division President made to the SMART formula was to add "Simple." His SMART acronym was modified to simple/specific, measurable, attainable, relevant/realistic and time framed. Simple is a critical element of goal setting. He had seen too many goal setting processes that morphed into administrative processes that missed the real meaning and intent of goal setting.
Ambiguity is a fact of life in all organisations. In many cases it can be an advantage. But in most cases, the clearer the requirements, the better. Use SMART goals, keep them simple, and watch people respond with a high level of commitment to the enterprise. They can be, as in this case, the difference between success and failure.
Recommended read: A Brief History of SMART Goals, by Duncan Haughey.