Tech City Life: SMART goals SUCK for start-ups

With January the month of resolutions, Flubit co-founder Bertie Stephens argues that certain goals can be too restrictive in the fast-moving environment of a start-up...

As we enter a new year, we set ourselves personal goals: resolutions. The arbitrary boundary of the calendar year is the ideal time for many of us to make fresh starts and pledge to improve our lives by giving up vices or dropping a few pounds. And we never stick to them, aside from this year of course – this year we’ll definitely still be in the gym by mid-Feb. Promise…

As we enter a new year, we set ourselves personal goals: resolutions. The arbitrary boundary of the calendar year is the ideal time for many of us to make fresh starts and pledge to improve our lives by giving up vices or dropping a few pounds. And we never stick to them, aside from this year of course – this year we’ll definitely still be in the gym by mid-Feb. Promise…

Deciding to create New Year’s resolutions for your start-up is tempting fate, but by replacing one word (resolution) with another (goal), your pledges somehow become far more credible. Setting goals in business is certainly an important task – particularly when your company is in its infancy.

Investors want to know your goals – both for the short-term and the long-term future of your company. If you can’t tell investors what you want to achieve with your business, you’re hardly likely to be taken seriously. It’s not just investors who need goals, though. Potential employees will ask you about your vision and objectives at interviews, and you, the founder of the company, will also benefit from direction.

SMART goals SUCK for start-ups

You’re probably fed up with hearing about SMART goals; Specific, Measurable, Achievable, Realistic, and Time-bound. Since our school days we’ve been told that this is the way to set goals. SMART criteria prevent our targets from being vague and unrealistic. I’ve set my fair share of SMART goals in the past, particularly for the short-term – but in the creative, fast-moving environment of a start-up, this approach often feels clunky.

So why do I feel SMART goals SUCK for start-ups?

Stunted potential

As I’ve mentioned in my previous posts, metrics are very important to Flubit and to potential investors alike, but sometimes a measurable, specific goal can be unhelpful. First, the market is changing quickly: SMART goals are unlikely to remain applicable in the long-term. If you have to create a new batch of goals to match the changing market situation, then your initial goals were clearly too specific and too restrictive.

During my time building Flubit, I’ve also found that setting static, formal goals can inhibit creativity and stunt innovation. As your company grows, your skills, experience and access to technology all change. There are so many unknowns in business – particularly for start-ups. SMART goals tempt us to ignore these unknowns and continue onwards with what you know. By exploring these unknowns instead you may uncover new solutions and directions for your business that just don’t compute with your SMART goals. Your long-term goals should never feel restrictive.

Unmotivated employees

SMART goals don’t work as motivation for all of our staff. We’ve found that setting ambitious (and not necessarily achievable) targets enables our staff to develop new skills and leave their comfort zones. Every staff member at every level of the business wants to learn new skills. Setting challenging goals is a great way of achieving this.

Creative vision

Whatever goals you decide to set, they must always be made in-line with your long-term vision for the company. Setting New Year goals for your start-up ensures that you remain on track and kick start your plans for 2015 in wholly positive fashion.

‘K’

Finally, on the more abstract side, ‘K’, represents the reaction you usually get from staff in a start-up when you ask them to follow SMART goals. Everyone know within three weeks the goal posts will have shifted, and the last thing you want is that form of enthusiasm from your key guys!

What’s the alternative?

So if SMART goals SUCK for start-ups, what should you be doing instead?

I’m not advocating that you abandon goal setting altogether – your investors (and bottom line) will hate you for that. Instead, you need to set goals that get your team members and employees fired up. I call them ACE goals: Ambitious, Creative and Exciting. You need to find the projects rather than the metrics that will make your team hit their targets.

For example, if increasing conversion rate is a key goal, rather than setting the metric, set the three projects that you believe will achieve the goal instead. Ultimately you can’t tell your users to buy more often, but you can build the reasons for them to buy more often. I’ve found projects can be more creative, exciting and are ambitious to achieve – but they end up achieving the same results, with a happier team.

Bertie Stephens is chief executive of demand-driven marketplace Flubit.com.

Comments

(will not be published)