There’s a S.M.A.R.T. way to write management's goals and objectives George T. Doran A characteristic of management excel- lence is a climate in which company offi- cers and managers talk in terms of objec- tives. However, despite all the literature and seminars dealing with effective ob- jective setting and writing, the fact is that ‘most managers still don’t know what ob jectives are and how they can be written, From a behavioral point of view, too ‘many of these managers’ objectives rep- resenta theeatto their postion. ts, there- fore, the job of top management to com municateto its executives how objectives ‘are set, how objectives are written, and, ‘of course, the meaningo the word objec- tive within the organization. Manage- ‘ment must also realize thatthe writing of objectives represents a new world to ‘many managers, ‘Although it may be fashionable to de- bate the differences between goals and objectives in our graduate business schools, from a practical point of view the label doesn't _make any difference provided officer’managers agree on the ‘meaning of these words. In some cases, goals are short-term and objectives are long-term. in others, the opposite is true. To other organizations, goals and objec tives are synonymous. Time should not bbe wasted in debate overthese terms. The important consideration isnot o have the label get in the way of effective com- ‘munication From the experience of a corporate planner, however, itis helpful to make a distinction between these terms, but only at the executive level. Goals represent George T. Doran is president of Man- agement Assistance Programs, a consult- ancy headquartered at Coeur d'Alene, Idaho. He formerly was director of corpo- rate planning for Washington Water Power Company, Spokane. ‘unique executive beliefs and philoso- pphies. They are usually of a form that is ‘continuous and long-term. For example: (1) Conduct all corporate activities with honesty, integrity, and fairness; and (2) take an active role in community ac- tivities and practice good corporate cit- zenship. Objectives, on the other hand, sive quantitative support and expression to management's beliefs. For example: ‘Todevelop and implement by December 31, 198__an inventory system that will reduce inventory costs by $1 million, find ways to deal with change and allow managers the freedom to reveal them- selves as individuals, These twin de- ‘mands of managing change and satisfying human needs can be accomplished if, and only if, organizations educate their people in the “what” and “how” of writ ing effective objectives. Wes important to understand the human side ofthe objective-settng proc- ess, can be a dificult task, it requires scarce time, and to some its an unpleas- ant experience that generates much stress. As a result, the majority of U.S. corporations don't really have an effec- tive objective seting/planning process. Operating managers feel pressure to produce. They are not interested in the “The establishment of objectives and the development of their respective action plans are the most critical steps in a company’s management process. with a cost not to exceed 200 work hours and $15,000 out-of-pocket initial ex- ppenditures Although on a corporate level some objectives can be long-term, on a department level we could use a subob- jective to express a short-run goal. The establishment of objectives and the development of their respective ac- tion plans are the most critical steps in 2 ‘company’s management process. When top- and middle-level management are indecisive or set inadequate objectives, errors in judgment will compound them- selves throughout the entire organization, ‘The writing chore Recognizing that objectives enable ‘an organization to focus on problems, and give the company a sense of direc- tion, why can't most managers write meaningful objectives? Today's en- lightened management knows that the successful corporations ofthe future must future if they believe they are being evaluated on a short-term basis. Busy producing, they usually don't want to take time to put something on paper that they feel will commit them toa situation in which they may or may not have con- trol over the variables. In many com- panies, managers resent having to come Lup with objectives, particularly when the corporate officers are somehow exempt from the necessary leadership in fist de- veloping and communicating them. So the process of writing objectives is a ‘major source of anxiety that many indi- viduals would like to live without. Yet, “objective setting must become a way of life, and managers must be educated and ‘encouraged to set job objectives within their shops. How to write objectives ‘The critical question then becomes, (Continued on nextpage) NOVEMBER 196135Objectives (Continued rom page 35) “How do you write meaningful objec- tivest’—that is, frame a statement of results to be achieved, Managers are confused by all the verbiage fromm semi- ‘ars, books, magazines, consultants, and so on. Let me suggest, therefore, that when it comes to writing effective objec- tives, corporate officers, managers, and supervisors just have to think of the ac- ‘ronym swat. Ideally speaking, each cor- porate, department, and section objec- tive should be: Specitic—target a specific area for im- provement, ‘Measurable—quantify or atleast suggest an indicator of progress. Assignable—specify who will do it. Realistic—state what results can realist- cally be achieved, given available re- Time-related—specity when the results) ‘can be achieved. Notice that these criteria don’t say that all objectives must be quantified on all levels of management. In certain sit uations it is not realistic to attempt ‘quantification, particularly in staff mid dle-management postions. Practicing ‘managers and corporations can lose the benefit of a more abstract objective in ‘order to gain quantification. tis the com- bination of the objective and its action plan that is really important. Therefore, serious management should focus on these twins and not just the objective, It should also be understood that the suggested acronym doesn’t mean that every objective writen will have all five criteria. However, the closer we getto the ‘marr criteria as a guideline, the smarter ‘our objectives will be. When you start hearing managers and the supervisors saying, “Are your objectives smart," you iknow that effective objective setting is becoming a way of life with them. You also will know that you have taken a step to introduce management excellence into your organization. . 96 AMA FORUM Misfits (Continued tom page 31) ‘The best time to do thisis when a job becomes vacant. Or when you make a promotion decision. Or when you are hurting badly enough to do something about it Establish more teamwork. Bring in ‘one person's strengths to help others. At planning or budgeting time, for example, tse those who are good at planning or bbudgetingto assist those who arenot. We must getaway from the idea that everyone must be very good in every as- pect or every stage of his job. Make periodic evaluations of job fitsevery two or three years. Discuss with subordinates any changes in their job requirements and in the cit- cumstances in which they operate. What are the critical elements ofthe jobs? What are the individuals’ strengths? And do they sill match? Are the strengths that ere right for the job three years ago still right today? Jobs can change dramatically in a short time. A completely different set of skills may be wanted as the products change, asthe organization grows, and as managersand other employees comeand 80, This isa typical reason for job mis- ‘match. A new manager may operate ‘uite differently from his predecessor. A manager may be a laissez-faire, man- aagement-by-exception type, and his sub- ordinates may be very comfortable work- ing for him. Suddenly he leaves and is replaced by a tiger who takes complete charge of everything. He makes all the decisions. He establishes tight control. Immediately, the job of every subordinate hhas changed. Overnight, the decision maker has created a half dozen job misfits ‘Most organizations have @ success philosophy of onward and upward. It is not necessary to motivate a good man- ‘ager in this way. He'll climb through sr0und glasif he needstofor acommand positon, Bu this challenge to climb ap- peals tall kinds of people who should ever be climbing Instead, companies should encour- age people to seek or accept jobs where they il be most success, even i his mean lteral movesand, ys even lower postions, To do this, a company must create the rightenvronmentsothal tans- fers to the sultable poston, up or down the ladder, are nether uncommon nor humiliating Most important, radical change is needed in the poston evaluation and salary stricture. Most salar systems ow make it extemely dificult 10: move fomeone in rections other than Up, without loss of pay. Normally a person's salary is linked to quantifiable factors, such asthe numberof people under him or the sizeof his budget. The whole clas- slication and evaluation of jobs tend to be very iid ‘A salary srucure should allow people tobe wel paid or their contribu tion, whatever their postion. Fi thermore, salaries shouldbe related such more othe individual rather than the jb. A company could then look at what individuals giv, match that with the requirements forsuccessona job, and reward them in accordance with th peformance rather than some ile, Job Clasiication, of whatever Finally, hold manages accountable forthe proper match ofthe stbordnates and ther ob, Require evidence offob ft imperformance aprasals as oundaton, to management by objectives and all ef fonts seeking improverent in productive ity And, when you encounter jb mis match, correct you must remove the employee, move him of her to a more suitable postion, ri thats impossble, seek asntance i ciplacrent People are expensive assets. If a man- agertaspersonsinthe wrong ob rere him to face up othe realty of or be penalized. The immorality hes naling to tackle the problem, not in being sot aboutit, 7