SMART Business Objectives
All businesses need to set objectives, objectives are important they focus organisations. Businesses that have specific aims are usually more successful than those that don't; because a business with objectives knows what it is trying to achieve. Objectives can be set in all areas of the business e.g. sales, production, finance and marketing. An effective way to set objectives is through the popular acronym SMART.
The diagram below illustrates the five components that make up the SMART Objectives acronym.
SMART Objectives Components
A SMART objective is -
T ime Scaled
Why Are SMART Objectives effective
An objective that follows SMART is more likely to succeed because it is clear (specific) so you know exactly what needs to be achieved. You can tell when it has been achieved (measurable) because you have a way to measure completion. A SMART objective is likely to happen because it is an event that is achievable. Before setting a SMART objective relevant factors such as resources and time were taken into account to ensure that it is realistic. Finally the timescale element provides a deadline which helps people focus on the tasks required to achieve the objective. The timescale element stops people postponing task completion.
SMART Objective Example
The table below uses an example objective from a fictional software company, to illustrate how to apply the SMART objective principle. The software company have decided that they would like to increase sales and will be using the following SMART objective to do that;
"Increase market share to 3% in 12 months"
SMART Business Objectives
||How does the objective include this element
||The objective specifies what the firm would like to achieve by stating that the firm would like to increase market share.
||The objective states that the firm would like to increase its market share by 3%; stating the percentage increase provides something to measure progress against.
||Before setting the objective the firm examined its marketing environment and the firm's capabilities in order to assess what increase in market share was achievable.
||Before setting a 12 month deadline the firm assessed whether it was possible (realistic) to increase their market share to 3% within 12 months.
||The timescale for this objective is 12 months.
Organisations, businesses and people set objectives everyday, often without realising it. If they test their objectives against the SMART principle, they will increase their chances of success. Once a SMART objective has been set, the next step is to write a plan detailing how the objective will be achieved. Click on the following link to learn how objectives differ from strategy Objectives Strategy and Planning. Or the following link if you would like to know about the structure and content of marketing plans Marketing Plans.