I’m sure we have all had to make SMART objectives in the past. Either at school or at work, or even for our personal lives. We are taught from a young age that objectives must be SMART. The reasons for this sort of make sense, but all they do is encourage us to be average. Mediocre, even. We are scared to fail, so we make up targets that we are likely to reach. Attainable. So if we work hard and reach them in less time it takes than we thought, what’s the incentive to carry on with that momentum? What’s the point of putting more effort in now when we can wait until next month or quarter or year when it will count towards the next target?
I once worked with a guy who was set Attainable targets. He was a trader, and he was tasked with making X profit in the year. When he reached this target in May, he closed down all his positions and took the rest of the year off so he “didn’t lose what he had made”. His Attainable target had made him lazy and unambitious. What was even worse was the fact that his bosses thought that he had done a good job and welcomed giving him seven months off. With full pay!
Specific targets are all well and good, but TO WHAT are they specific? To your job? Your life? Your company’s goals? How many of us have moved roles mid-year and then come the end of year review have all our original targets annulled because they aren’t applicable anymore? I certainly have. You are then measured on whatever metric your manager decides to pluck out of the air.
Just because they might be relevant when you make them, doesn’t mean that they won’t be relevant when you come to review them. And why do they have to be relevant? What’s wrong with going off on a bit of a tangent. I’m sure when Elon Musk decided that he wanted to develop a reusable rocket, that wasn’t relevant to anything he was doing at the time. That doesn’t make it a bad objective. Look at him now: achieving.
Time and time again I’ve sat in meetings listening to management discuss why they haven’t met their target and for them to agree that it’s just taking more time to get to where they want to be than they first thought. So they move the goalposts. That target for getting 1000 new customers wasn’t reached because it took them longer to onboard them than they initially planned.. So they reduced the target to 750 and hey presto, target met! Hurrah! Thank you for my bonus, Mr Chairman.
So even if you can measure them, doesn’t mean that the measurement is correct. What if you are measuring the deals brought in by your sales people. Do you measure the number of deals, or the size? What if they are bringing in lots of complex deals which take up a huge amount of resource from other areas of the company? At what point does it count as a deal – when it’s brought in, or when it completes? What if the customer cancels the deal half way through the term?
Or you might be targeted with making your customers happier. You might measure this by the number of complaints that they raise. But the number of complaints could remain the same, but as a much smaller percentage of a growing customer base. Perhaps the number of complaints goes up, but the amount of money you get from returning customers also goes up.
Forcing people to have targets that can be measured stops them from making targets that are not measurable, which can be equally as important.
Generally speaking, if you set a SMART target, it will put an end point to your ambition.
Think about when you go for a run. If my goal is to run 5k, that’s all I’ll do. If I aimed to run 100k, there’s no chance of me being able to achieve that, but chances are I’d get further than 5k.
So ask yourself this. Would you rather meet a mediocre target, or fall short of an aspirational one?
As a CEO, do you want your employees to achieve their pathetic goals, or aspire to smash through them and achieve more than you thought possible? If your company objective is to break even, what happens if you fall short?
I remember when I was at school I always seemed to do pretty well .So when it came to objective-setting, I remember my teachers always struggling to think of things that I could write down. I remember being a little bit smug that I had ‘achieved everything’ so when they told me that my target for the following year was “carry on as I am”, I was proud that I was doing really well. Thinking back, all that happened was that I had no aspiration. I never had anything to aim for. My achievements in school were generally down to luck. I do wonder what I might have gone onto achieve had I been encouraged to set massive targets.
That’s probably an extreme case. I have never met anyone since that had a similar experience. But if I could have achieved even more by having huge or even unrealistic targets, then imagine what everyone else could achieve!
It’s better to fail at a huge target than to meet a mediocre one. We should stop penalising people for not meeting targets, and we should stop rewarding people for being average. Or even worse, when you fall short of a mediocre target. And it’s basically writing your company suicide note if you then move the goalposts to say that you achieved them.
Later on in my life I was filling out my objectives when I worked for a bank. I noticed that to achieve a “standard” grading, I had to exceed my targets. THIS is what is needed, as the bare minimum, to move companies forward. At the time I thought it was just a ploy so that people missed out on bonuses (and there’s probably some truth in that), but thinking back, if everyone had exceeded their goals, imagine how much better performing the company would have been.
By now you might be thinking that if you set ridiculous goals, your staff won’t bother and they will just leave. If that’s the case, then I put to you that you are hiring average people who want an average life. If you want an average company, then great. Because you’ll never be better than average with that mindset.
Set your employees ridiculous goals, with ridiculous rewards for them to meet them, and your company will explode with growth. You will get infinitely more from your employees than if you are setting achievable goals.