Without business goals, an organization tends to flounder and is unlikely to grow. Setting the wrong goals is as bad as having none at all. The SMART goal system is a framework that helps managers sets objectives that are specific, measurable, achievable, relevant and timely. Clear aims make it easier to create an effective action plan for your company.
Specific
Vague business goals such as "increase sales" leave managers without clear direction. They waste time deciding where sales should increase and by how much, and two different managers are likely to come up with wildly different action plans. Setting specific SMART goals removes the guesswork and lets the team focus on reaching the goal rather than defining it. Better objectives would be to increase sales in individual market sectors of certain products or by an explicit percentage by a specific date.
Measurable
If you can't measure your progress, how do you know when you are done? Business goals which don't contain benchmarks or some way to quantify success give people no way to judge advancement. There is no morale boost for being ahead of schedule, and no redoubling of effort if the project falls behind. SMART goals have some objective measure of progress. If you can't figure out a way to assess the project's development, then it's a bad objective.
Achievable
You may have heard the aphorism, "Reach for the stars. Settle for the moon." In real life that phrase often becomes, "Reach for the stars. Realize that's impossible and give up." Unrealistic business goals are demoralizing and reduce productivity. On the other hand, a goal can be too achievable, and an easy objective inspires laziness. SMART goals should be ambitious, but should be achievable.
Relevant
If you don't care about your business goals, you won't be motivated to meet them. Create objectives that are important to you as an individual, to the role of the department and to the culture of the company. IT departments won't benefit from profit-oriented goals any more than the sales force will care about technology upgrade targets. SMART goals inspire people by being personally important.
Timely
You can achieve anything if you take long enough, but in business you don't have unlimited time. When there is no deadline, business goals become secondary to "important" tasks. The pressure of a schedule forces people to act now to achieve SMART goals rather than procrastinating. If the deadline is far in the future, set benchmarks along the way to ensure people stay on track and don't suddenly panic when time is almost up.
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