Charles Duhigg wrote the book Smarter Faster Better, in which he discusses the eight secrets of being productive in life and business. One of the eight principles is how we can set and achieve effective goals.
In this post, we’ll dive into the SMART framework and how to set audacious long-term goals. We’ll round off with a case study from GE and the Japanese railway.
What are SMART Goals?
SMART Goals align with five criteria. They should be:
- Specific, and focus on one idea.
- Measurable, so you can track your progress toward it.
- Actionable, so there are clear next steps to achieving it.
- Relevant, because they should align with your organisation.
- Timely, so you have an idea of how long it will take.
Goals that align with this framework are easier to achieve. Part of the reason is that these goals are, by definition, actionable.
SMART goals are also specific and relevant to our success. Because they are measurable, we can track our progress against the expected timeline.
How Do You Set A SMART Goal?
To set a SMART goal we need to meet each of the criteria.
We can make the goal specific by focusing on what we hope to achieve. Specific goals answer questions about who will be involved, where it will take place and if there are any obstacles we need to overcome.
Because the goal is measurable, we can track its progress against our key performance indicators. We need to identify relevant metrics to measure success. If the goal will take several months, we can measure it by setting milestones. It will then be easier to compare initial expectations to our actual progress.
Actionable goals allow us to define concrete steps towards reaching the goals. This criteria aligns with the Stoic concept of control. Essentially, we have the greatest impact by focusing on things within our control.
The goal should also be relevant to us and our business. Relevant goals clarify their importance.
We should also plan our goals into a plausible timeline to understand how long it will take to complete.
If you haven’t set your SMART goals yet, grab a pen and piece of paper and ask yourself how your current goals fill each of the five criteria.
What’s The Problem with SMART Goals?
While SMART goals help us focus on achieving goals, they tend to take a short-term approach. After all, short-term goals are more achievable.
On the other hand, short-term goals are trivial. They tend to focus on immediate profit over a long-term system or purpose. No one ever changed the world by starting with a SMART goal.
Take start-up ventures as an example. Most start-ups go out of business within five years. And the ones who stick around, usually have to pivot a few times to reach success.
The main factor behind successful start-ups is their vision. They tend to have a bold, audacious problem that they’re trying to solve. And all their effort goes to this single purpose.
These goals are often referred to as stretch goals.
How to Set Stretch Goals?
When people and companies have bold visions for the long-term they can experiment and adapt over time. The audacious goal becomes a North Star that directs all future decisions.
Setting and achieving audacious goals really comes down to 2 steps.
- First, identify the ambition.
- Then, figure out the plan.
It’s as simple as that.
We should focus on our boldest ambitions before trying to figure out how to get there. What long-term goals should you be working towards? Think about it.
Is the market shifting somehow, so your company is losing relevance? Does your department have a significant cost that could be dramatically reduced in the long term? What revolutionary ideas would put your business at the forefront of the industry?
Stretch goals disrupt complacency and encourage bigger thinking.
But it’s also important to note that focusing on stretch goals alone can negatively impact productivity. After all, stretch goals can be so audacious that you either don’t know where to start or you feel encouraged to take shortcuts.
Fortunately, we can balance risk-prone stretch goals with the systematic SMART criteria.
SMART Stretch Goals
We can use SMART criteria to turn a stretch goal into an actionable project. The key to long-term success is breaking down our stretch goals into a series of realistic, short-term aims.
The process of turning stretch goals into short-term SMART goals comes down to six questions.
- What’s your stretch goal?
- What is a specific subgoal?
- How will you measure success?
- Is this achievable?
- Is this realistic?
- What is your timeline?
Ask yourself these questions for each subgoal you will need to reach your stretch goal. By aligning our long-term aspirations with short-term goals, we increase our likelihood of success.
We can take the same approach to achieving goals with the Bullet Journal.
Case Study – General Electric
General Electric invented SMART goals in the 1940’s. By 1960, every employee had to formulate their goals using the SMART framework.
Despite following this standard, several departments had stopped being profitable by the late 1980’s. The jet engine and nuclear factories were among the flailing departments.
Senior management investigated and realised that most of the goals at these departments did not focus on business success.
For example, one goal involved building a fence to prevent nuclear protesters from harassing employees. While this goal met all the SMART criteria, it had little impact on the department’s bottom line.
The problem was that many people identified goals that were too achievable. In the early 90’s, the CEO of GE visited Japan to learn about dramatic business transformation.
Japan’s Railway Modernisation
When Jack Welch visited Japan in 1993, he toured a medical testing equipment factory. On this tour, he heard a story about Japan’s railway system.
In the 1950’s, Japan was eager to transform its economy following the second world war. By 1955, the head of the Japanese railway system challenged the nation’s finest engineers to invent a faster train between Tokyo and Osaka.
Within six months, the engineers invented a train capable of traveling 65 miles per hour. This rivalled the fastest trains of its day. But it was still not fast enough. The railway head wanted to reach 120 miles per hour.
The engineers said it wasn’t possible, because the train wouldn’t be able to stay on the rails when it turned. “But why do the trains need to turn?” he asked. Tunnels could be bored through the mountains between the two major cities.
In another 3 months, the engineers revealed an engine capable of 75 miles per hour. But the railway head refused this proposal. 75 mph would not transform Japan’s economy.
Over the following two years, the engineers experimented. The effective team designed train cars with their own individual motors and rebuilt gears to mesh with less friction. When they discovered that their cars were too heavy for the existing rails, they reinforced them. This reinforcement had the added benefit of increasing stability during the journey.
Hundreds of innovations like these resulted in the world’s first bullet train. In 1964, their train left Tokyo and reached Osaka in under four hours, traveling an average 120 miles per hour.
When Jack Welch returned from Japan, he told GE management that each executive and department would need to set its own audacious goals.
General Electric’s Takeaway
By 1994, nearly every GE employee had attended a Work-out, sessions focused on shaking employees out of short-term objectives. Employees were encouraged to suggest any goal they thought GE should pursue. Nothing was off-limits.
Managers would accept or reject the idea right away. And they were encouraged to say yes to any half-baked ideas. After all, in the worst case, the team would be no worse off than they are today.
But odds are that with the group’s energy, they would probably find a way to make the goal realistic, achievable and generally SMART.
In one Work-out session at the jet engine factory, an employee shared his idea to cut their material outsourcing costs. After all, they had the capabilities to produce the material in-house.
While this idea was not SMART in the least at first, it resulted in a 80% reduction in the material cost. The jet engine factory ended up saving $200,000 dollars from Work-out ideas in its first year.
Goal Setting in a Nutshell
SMART criteria make it easier to achieve goals by making them specific, measurable, actionable, relevant and timely. The issue with the SMART framework is its focus on short-term actions and results.
Stretch goals, on the other hand, offer a bolder long-term vision. The issue with stretch goals is that they are so bold that they can demotivate employees if they’re not actionable.
We can only set truly effective goals when we combine stretch goals with SMART criteria. By breaking up our long-term aspirations into short-term achievable goals, we can achieve our most important objectives.
Set more effective objectives with SMART stretch goals and Mind & Practice today.