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18 March, 2023
What Is the SMART Model? How to Apply It in Business
Content
What is the SMART model?
Model SMART is short for these English words:- S – Specific: clearly defined.
- M – Measurable: can be measured.
- A – Actionable: feasible.
- R – Relevant: related to the bigger picture.
- T – Time-Bound: a deadline for reaching the goal.
S – Specific
The first key principle of the SMART model is setting a specific goal. When a goal is narrowed down and well defined, you understand much better which strategies you need to carry out in the business.M – Measurable
Once the goal is clear, you need to gather figures and take specific measurements. The parameters and projections for reaching the goal must be stated clearly.A – Actionable: feasible
All goals and measurements must be feasible to carry out and have a high chance of success. For example, if growth last quarter was 5%, aiming for 10% next quarter is more feasible than setting a target of 20 – 30%.R – Relevant
The R stands for Relevant, meaning related. Some schools of thought use R for REALISTIC instead, meaning practical. Either way, Relevant and Realistic are both about fit with the goal and a shared vision, and both aim at developing the business.T – Time-Bound: a deadline for reaching the goal
A goal with a clearly set timeframe is much harder to let slip. Set a clear deadline for each goal. Based on that deadline, employees and managers pick up pace and motivation and build a clear strategy for the goal.Benefits of applying the SMART model
The SMART model helps a business identify its focus and have a clear direction. Unsuitable goals are dropped, saving time and money and directing investment to the right purpose.
- A business can more easily make highly strategic plans with a strong chance of success.
- With the SMART model, employees and managers also have more motivation to work.
- Stress in the business also eases when there is clear direction. The business knows its strengths and can compete with rivals as professionally as possible.
- With the SMART model, employees have their own motivation and plan to use their abilities and meet their targets on time.
How to apply the SMART model in business
Identify promising business goals
Business goals often shift with the market, customer share and competitors. Once you set a business goal, you know where you need to go and what to do, and you have a clear compass for action.Tie the goal to measurable figures
Once you have a goal, work out the figures that measure it. Quantify and measure every factor related to the goal. These figures show you your chances of success. They help you set accurate growth numbers and avoid illusions about plans that go far beyond your ability and reach.Judge how likely the goal is to succeed
Before acting, consider how likely the goal is to succeed. Once the goal is set, you have the motivation to carry it out. If the goal looks too high, you can scale it back or look for an unusual business strategy that gives a high chance of success.Check how the goal relates to other things
To succeed, the specific goals you have defined need links in many directions. Look for the relationships around the goal so you can build business strategies that reinforce each other and raise your chances of success.Set a specific deadline for the goal
The pressure of deadlines gives managers and employees more drive. A deadline that is too long saps motivation, and one that is too short creates too much pressure. Base the deadline on the nature of the product or service and on the results of the previous round to set sensible completion dates.Commit to the goal you set
Once a goal is set, it must be carried out well. Managers should motivate their staff. Employees should use all their time, skills and abilities to reach the goal within the set timeframe.5 examples of applying the SMART model in business
Increase sales with the SMART model
- S: The specific goal is to increase sales.
- M: Raise sales to 100 million VND/month.
- A: Staffing, the market and last month's sales confirm that a rise to 100 million VND/month is achievable.
- R: Resources and the market are stable. Raising sales to 100 million VND/month keeps the company's income and spending in balance.
- T: With current resources and market conditions, the increase of 100 million VND/month will be done within 1 month.
Grow a business with the SMART model
- S: The specific goal is to grow the size of the business.
- M: Grow the business by 5%.
- A: Current resources and the market make a 5% increase in size over the same period last year achievable.
- R: Growing the business by 5% in order to expand the market.
- T: The 5% growth will be achieved within 1 period.
Use the SMART model to improve product quality
- S: The goal is to improve quality.
- M: Raise satisfaction scores and star ratings from customers on Facebook.
- A: Given current Facebook engagement and our Fanpage, we are confident we can do it.
- R: Based on customer potential and service quality, we can confirm a 5% increase in engagement and positive reviews from customers.
- T: The goal of improving customer quality ratings on Facebook will be met within 3 months.
Apply the SMART model to cut business costs
- S: The goal is to cut business costs.
- M: Cut at least 10% compared with the same period last year (1 year)
- A: By reducing headcount while training key staff and scaling back production, we commit to cutting at least 10% compared with the same period last year.
- R: Reducing headcount, training talent and using automated machines will handle the economic downturn well and cut at least 10% while keeping product quantity and quality.
- T: Completed within 1 year
Solve fundraising with the SMART model
- S: The goal is to raise capital
- M: Raise 10 billion VND for the business.
- A: The reputation and talent of the sales team and the brand ensure we can raise 10 billion VND.
- R: With our current reputation and growth potential, we will raise 10 billion VND to expand the business.
- T: The fundraising will be completed within 3 months.
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About the author
CEO & Founder · The MONA
Founder of The MONA, who built a services company of 200+ staff with 14,000+ projects delivered. Khánh Hùng shares how he thinks about building systems that run themselves, automating a business, and the real lessons from delivering projects at MONA.
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