【How to utilize the SMART Goals】 Golden Rule for Goal and KPI Setting
(Duration: 4:36)
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What’s SMART Goals?
Hi, this is Mike Negami, Lean Sigma Black Belt.
Today, I’ll talk about the SMART Goals, which are very useful when you’re setting up a project goal or KPI’s. It’s often utilized to set employees’ KPI’s in the HR field. It’s a very powerful tool, so try applying it in the Measure Phase.
SMART is an acronym for Specific, Measurable, Achievable, Relevant and Time-bound. There are other combinations, but this is the most commonly used and the most suitable for project management. The first proponent was Peter Drucker, but his was a different combination than what we’re using today.
SMART Goal 1: Specific
The first criteria is Specific. The goal should be clear and specific. In order to achieve this, apply the 4 W questions, such as When, Where, Who and What regarding the goal.
SMART Goal 2: Measurable
The second one is Measurable. This is Peter Drucker’s famous quote: “What gets measured, gets done.” It’s amazing how he explained the substance of this with only one sentence. At the check phase of the PDCA Cycle, if you can’t measure the current situation, you can’t know if you are doing well or not, or even decide the next action.
SMART Goal 3: Achievable
The third one is Achievable. Haven’t you had some experience being assigned a too-high goal and lost motivation right away? Yes, unachievable goals can de-motivate their recipients, and would work against the goal. It’s better to not assign such a goal.
It’s imperative to make goals that compare past data and situations with current ones. They should not be low goals, but achievable with effort.
SMART Goal 4: Relevant
The fourth one is Relevant. For example, a sales team was given a gross profit % as a primary goal. The result was that they stopped taking low gross profit % orders, then their sales declined as well as the gross profit amount, even though they achieved their goal. In that case, that goal was not relevant.
Also, you cannot make any project goals that go against the company’s strategy or direction. It’s important to put things in perspective and think of goals. Think of the consequences for each goal, then decide on the final one.
SMART Goal 5: Time-bound
The last one is Time-bound. Always connect time limits to goals. For example, if I just told my kids to clean their room or read a book, they would not do it promptly. Additionally, giving deadlines or duration by setting a kitchen timer assures they will complete their tasks in a timely manner.
It’s applicable at work too. A goal without a time limit is just a slogan. Also, the supervisors who give those goals must also participate in the goals and the due-dates and make effort such as providing status reports and follow up with low achievers as the due-date gets close.
That is the explanation of the SMART Goals that are very useful for goal or KPI setting. And by the way, as I mentioned in earlier videos: unlike manufacturing operations, it’s more difficult to collect numeric data in non-manufacturing operations.
That being said, data is still important, so please make effort to collect data first. At that time look at your data while keeping the SMART Goals in mind, then that will give you hints how to utilize those data.
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