SMART Goal Setting Theory: To Create SMART Goals, Start With “Why”

Leadership 101 tells us that we must set clear and specific goals for ourselves and our teams to achieve business goals and objectives. In other words, our business goals should be "SMART" (Specific, Measurable, Achievable, Relevant, and Timely.) To craft an excellent smart goal, you need to take a few steps back and look at the whole picture - why are you doing this? The best SMART goals always start with "why." Are you taking an educated guess at what you think a good goal will be that will equate to business success? Are you confident enough to defend that guess to someone else? If you fully understand the "why" behind the project, it is much easier to define your time-based goals. Goal setting theory clearly states that the better you write your SMART goals, the better your team will perform.

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In business, employees are often given goals and short-term targets that they don't understand and have no input in creating. They also don't believe it is an achievable goal and don't know the steps to solve it. Any questions they ask about it are swept under the rug or only given a standard answer from upper management, which typically sounds like "because I said so!" to a toddler. Fewer still have those goals written in a SMART way, which is your primary strategy for average work at best and failure at worst. Starting with why is so important, it is the first C in our five C's of leadership and team accountability - creating a common purpose that is connected to the why.

How can you inspire your team if you don't tell them why they are doing what they are doing, and you'll measure goals and performance?

Your team wants to know WHY they are doing what you are telling them to do -- they want a deep understanding of how it connects to company strategy.

Since most of these people are closer to the customer than the management, they most likely have better ways to get it done if they understand why the company is doing it in the first place. If you can capture the hearts and minds of your employees, you'll see a positive return on your investment. Simon Sinek has done a lot of work in this area with his book Start with Why: How Great Leaders Inspire Everyone to Take Action.

SMART Goal Theory

How do I begin creating SMART goals?

Setting goals is a skill you can learn and improve over time and create a healthy sense of urgency to accomplish the goal. First, determine if your goal revolves around a process or procedure. Goals around standardized processes don't require much guesswork to measure whether or not they are successful, as you have a clear baseline to work from. Once you determine the amount of gain you can reasonably acquire, say 5% in the first quarter, then you can easily choose the new goal. If a process change succeeds, you will achieve the desired success criteria set out at the beginning of the goal. If you fail to meet the new number, you'll need to adjust and try again until you get it right, working toward the goal at each step.

If the process works as intended and doesn't break down — consistent effort = consistent results. If you can't measure progress towards your goal, you need to keep thinking until you can come up with a clearly defined metric of success to see if you gain improvement. If you aren't sure that you can measure it precisely, do your best and adjust as you go along. Think hard about this step as you must ensure that you progress towards your measurable goal, but don't get stuck on it. As we like to say, don't let perfect get in the way of good.

Let's take a closer look at another type of goal. This type of goal is not process-driven but more customer-focused and innovative, a product launch or something on a larger scale. Widen out the picture a little and look at what your customers need and what solutions you can offer them. How can you drive those results forward to provide a solution for a customer? Now, you've come up with a reason for the goal that you've set. This is your "why." What business problem is this product or innovation solving? How does it relate to the market that you compete in?

SMART goal theory

This type of goal (and "why") still needs the SMART goal template and framework, but in order to get to that step, you need to back up a little and reverse engineer. When an idea ("we think our customers need 'Solution X'") starts to percolate, it's worth taking the time to get into the nitty-gritty and begin with the assumption that your customer needs that solution. Why? What is the gap in the market? How are customers currently doing it, or why are they putting up with it? Remember, as Simon Sinek says throughout his book, "People don't buy WHAT you do; they buy WHY you do it." If you don't have that nailed down internally, it will be hard to sell to the market.

To articulate your "why," you need a few things to get you started. Let's assume you've already started with a hypothesis of why you think this will work and then dive into the data to put it to the test. Your hypothesis will have multiple assumptions, and you need to test every one of them. Writing SMART goals should always start with why and end with clear success criteria so that all team members and executives have a shared vision of success. Make sure that the why is both relevant and timely, then work to determine the target date that would be reasonable to obtain. If you are a manager, you should check out our manager's guide to goal setting.

How do you determine a "why" for a product that doesn't yet exist? First, you have to understand your customer's business and their needs. Having a deep insight into your customer's needs is essential when formulating your "why." Get your hands on the data. Talk to your best customers in an informal setting to see their daily challenges that aren't currently being met by any supplier. Create a formal survey after the initial interviews to see how the broader market would react to your idea. Create a prototype and share it with your customer. What does your customer do now? What do they need to do differently that your solution will fix? Keep reiterating until you get a product ready to launch, but never lose sight of the "why," or you'll be less likely to launch a successful product.

SMART Goal Setting Theory Tips

Setting SMART Goals Tip 1: Transparency

To create a work environment that promotes learning, engagement, and collaboration, share your hypothesis with the team and give them a chance to poke holes in it. Do they think your assumptions are accurate? Based on what? This conversation is vital to how you can lead your team to greater results. Encourage your team to challenge the assumptions and share points of view. When that process is complete, it's time to take this idea for a spin (but still in a safe and controlled environment) to determine if it is truly obtainable. Employees are motivated when they know exactly what is expected of them.

Setting SMART Goals Tip 2: Experiment

Once the initial kinks are worked out, and you're ready to move forward with solid data and a clear-cut path, have employees try to test the new method or product. Let them test some of their assumptions. Let them see if they can break it. See what they uncover as potential issues you can solve before you take the experiment to the next level — a beta test with select customers.

Setting SMART Goals Tip 3: Learn

What experiments worked? Which ones failed? What data did you collect that will inform the next decision? Take the opportunities here to clean up the bad data and push forward on the experiments that yielded success.

Setting SMART Goals Tip 4: Evolve, Adjust, and Be Agile

Now that your "why" has solid footing, where can you give this hypothesis some autonomy? Everyone on your team needs to articulate the "why,"; otherwise, they are more likely to fail to achieve that particular goal.

This last step is critical. It requires you (and gives you the opportunity) to behave like a start-up. Managers in established organizations often struggle with how to lead teams in this way. It's easy to hold someone accountable to a specific task or KPI metric (going back to established processes = consistent results). Still, when a goal fails to be realized, it is more likely due to a failed assumption or theory that something would work. In your project management, you must assume that each time frame will be a point of adjustment to keep working toward the success criteria.

Managers and leaders can take this failed assumption and coach their teams through the process, leading to more empowered employees and opportunities for innovation. Empowered teams who work collaboratively can move a product to market efficiently and strategically. Still, it all comes down to the framework established for the project and the goal that started it all (going back to the "why"). If the why is deeply understood, creating your action plan to accomplish this goal is much easier.

So take that SMART goal beyond the process KPI and dig deeper into the assumption that your customers have innovations and solutions to meet their needs. Use the SMART goal framework to test your theories and hypotheses to empower your teams to innovate. Be transparent and offer your teams the autonomy they need to work through the kinks and come to market with a fully formed solution.

Starting with why will help you and your team achieve growth and profitability this fiscal year. Thanks to Edwin Locke for his initial groundbreaking work on goal-setting theory.

Ted Skinner