The most successful business strategies are driven by well-defined goals. But, once those strategies are put into place, you need a way to measure performance to make sure you’re moving in the right direction. That’s why it’s so important to combine smart goal setting with smart KPI planning activities.
Key performance indicators
KPIs, or key performance indicators, are business metrics that you define and track in order to measure performance. Here is an example of a real strategic priority from one of our municipal strategic planning software customers that demonstrates how Envisio cascades that strategy down to an objective, and further down to the actions that need to be taken to achieve the strategy.
Finally, we reach the KPI metrics that will tell the managers of the strategy how well that portion of their strategic plan performed:
Strategic Priority: Economy and Financial Health
Objective: To Build A Prosperous Community
Action: Economic Development Initiatives
KPI: Employment rate for city, Establish a tourism marketing fund
As you can see, the KPIs you choose will depend on your specific organizational goals and they should always be:
- Focused and goal-specific
- Easy to measure and report on
- Easy to assign to specific teams or individuals
Goal setting meets KPI setting
Goal setting and KPI setting go hand in hand. And, when you set goals, you don’t just want them to be smart, you want them to be SMART:
When combined with well-defined KPIs, SMART goal setting can make it easier to sell organizational change to your team—regardless of whether you’re a city manager with over 200 team members, a superintendent in charge of a district that covers more than 100 schools, or a Fortune 500 company. When you know exactly what you’re working toward, and have a feasible game plan in place to reach your goal, it instills confidence and a sense of purpose in your teammates and the stakeholders you’re accountable to.
Let’s break down the SMART system and really determine how you can make it work for you.
If you’ve already got a strategic plan, great! Pull it out and compare all your strategies, objectives, goals, actions, tasks, priorities, KPIs—or whatever planning terminology your organization uses—and layer it on top of what you’re about to read here to ensure you’re moving in the right strategic direction.
1. Set SPECIFIC goals
Your goals ultimately define your organization. If your goals are vague, you’ll have a hard time setting and measuring KPIs. And, when you’re uncertain about your KPIs, you can’t accurately determine what you’re doing right and what you’re doing wrong. In other words, you’re flying blind.
By setting specific goals, you define a clear path from point A to point B. Everyone knows where you’re starting, where you hope to finish, and how you plan to get there. This makes it easy to prioritize and measure all the smaller steps that need to be taken to ensure you and your team are always moving toward your ultimate goal.
2. Set MEASURABLE goals
Once a goal has been defined, you need a means of measuring your progress. This is where goal setting and KPI setting become one. In order to keep everyone focused on the actions that actually contribute to the achievement of your strategy, it’s important for you to be able to easily and accurately evaluate performance and communicate the results to everyone who holds a stake in the process.
3. Set ATTAINABLE goals
Setting unattainable goals is a waste of time, and it can be discouraging to your employees to fail despite their best efforts. Strategic goals should be ambitious enough to motivate your team and push them to new levels of success. But, goal setting and KPI setting should never set your team up to fail. Always be realistic.
4. Set RELEVANT goals
There’s a time and place for everything, and sometimes a great idea or project has to temporarily — or permanently shelved — to make way for a higher priority item that is more in line with the overarching strategy you’re trying to achieve. And, of course, make sure that every smaller, short-term goal you set is relevant to the greater end-goal. At the end of the day, it’s all about your ability to quickly shift and pivot away from things that aren’t in line with your strategy towards tactics and actions that are.
5. Set TIME-SPECIFIC goals
Deadlines are a must in the efficient operation of any municipality, school district, or enterprise. Knowing you have to work and produce high-quality results within a specific time frame creates a sense of urgency and complements your strategic planning and implementation process. How? By forcing you to map out and prioritize the necessary actions to reach your goal on time.
When you set SMART goals, your key performance indicators become obvious. With the proper KPIs in place, you can not only measure performance across departments, you can also:
- Ensure everyone is connected back to the plan and working towards a common goal,
- Monitor the progress of your plan with continuous updates from your team members,
- And, accurately report on the progress of your strategic goals during council, board, and shareholder meetings.
Answering the question, “So, how are we doing on Strategy XYZ?” will be easier than ever before!
Are you setting SMART goals with measurable KPIs? Download our free strategic planning template and learn why the experts trust Envisio to help them implement, track, and report on their strategic plans.