How to Create SMART Goals?
How to adjust and rephrase a vague problem into an achievable goal?
SMART criteria is widely used in project management and personal development. SMART is the acronym of five words used to to set an achievable goal:
- S:Specific
- M: Measurable
- A:Attainable
- R:Relevant: relate to other goals
- T:Time-bound: with clear deadlines
One of its applications is to adjust and rephrase a vague problem into an achievable goal.
Purpose:
- Used to more clearly state the goal and problem at-hand
- Design metrics to evaluate and motivate employees
Ex: An internationally well-known private equity firm wants to acquire an Australian movie theater chain A. The partner of that PE firm asks you to help them determine whether they want to acquire that movie business.
Analysis:
At first glance, it seems to be a yes or no question. Since the way the question is vaguely phrased, it’s difficult to proceed from here. That’s where SMART criteria comes in. It’s important to rephrase the problem to help analysis of the situation later down the road.
By thinking through the lens of the PE firm, it’s easy to see that In order for this acquisition to be worthwhile, A has to generate a certain level of revenue, say 200 million Australian dollars a year in five years. Therefore the original problem is transformed from a binary question to a question that is more specific and measurable. By going a step further, the problem really concerns with the ways movie firm A can generate average 200 million in revenue over the next five years. And I can go from here to analyze the sources of revenue for A.
This is an example of using SMART rule to rephrase the problem. It not only help me to refocus on the Schwerpunkt (main point) of the problem hand but also to better evaluate how effective the measures I take serve the goal.
However, in order to use SMART criteria well, it’s also imperative to get to know more information about the status quo and development potentials of a firm.
Key Takeaways:
- Whether to acquire a business problem: think of the ways for the target company to generate adn maintain a certain revenue level.
