Are SMART goals dead?

For years we have been told to set SMART goals. By ensuring our goals are Specific, Measurable, Achievable, Realistic, & Time-bound increases the likelihood they will be achieved. In organizations, goal setting is popular as a process to execute strategy and drive long-term growth. Incentives and career growth are also heavily linked to goal achievement. However, despite their popularity, questions are now being asked about the relevance of the SMART framework. Is there a better alternative to executing organization strategy?

Senior Lecturer at MIT Sloan School of Management, Donald Sull and Charles Sull, Partner at Charles Thames Strategy argue that the traditional SMART goal setting works well on an individual level but is no longer valid for companies as a whole. Instead, organizations should use an alternative framework, FAST: Frequently discussed, Ambitious in scope, Specific with metrics and milestones, and Transparent for everyone to see. 

By discussing goals more frequently, ensures goals are top of mind and driving daily actions and behaviour. While annual goal setting is the norm, more and more organizations are moving towards quarterly objective setting to combat higher levels of uncertainty and marketplace volatility. These ongoing discussions allow for real-time adjustments and more informed decision making. Further, setting of ambitious goals avoids ‘sandbagging’ (deliberately setting lower standards to produce greater than anticipated results) and employees’ tendency to play it safe. For example, Google encourages employees to set goals that they are unlikely to achieve beyond 60 or 70%. Bonuses are delinked from goal achievement, and higher rewards are given for creative and innovative ways employees strive to achieve their ambitious targets and ideas that offer higher payoff in the long term.

By introducing employees to Objectives & Key Results (OKRs) that are quantitative help clarify what needs to be done and allows progress to be measured. The more specific, the easier it is to evaluate and allow errors to surface more quickly, which aids the speed of learning and allows midcourse correction. Finally, by increasing transparency of goals, makes it easier to see how work links together across teams or functions increasing collaboration and better coordination, thus reducing the need for command-and-control management system and closed-door conversations.

While goal setting and management are still the best ways to get things done in organizations, moving on from Management by Objectives (MBOs) and SMART goals that are better at an individual level, to goals 3.0, which are real-time and social, alongside clear expectations of what needs to be delivered, focus on measurement, ensures that goals continue to be a powerful tool to drive strategy execution.