04 Feb Why SMART goals matter
SMART methodology is one of the greatest hits in the history of business management. Have you ever think about how this could impact your energy efficiency plans? Keep reading and learn how.
What is SMART methodology?
SMART is an acronym for Specific, Measurable, Assignable, Realistic and Time-related. It’s widely used in business environments to define plans, strategies, and specially, objectives to achieve them.
The SMART concept is specially related to goals. It was used for the first time in November 1981 in the magazine Management Review. The concept is attributed to Peter Drucker, who created the “management by objectives” idea.
Management by objectives is a process described in Peter Drucker’s book The Practice of Management. You’ll find out that we’re not talking about anything “new” or “disruptive” when you discover that the book was released back in 1954.
The beginning of this process is a participative goal setting. This means that, as a manager, you should try to include your team to set up the goals for the year. This is extremely important because no one wants to be measured by something that he or she didn’t agreed to.
After beneficial results surface when applying the idea to business management, it was expanded to personal career development or project management.
What are SMART goals?
SMART are business or professional goals and are:
Of course, you will find many other definitions of this concept. SMART methodology has evolved since 1981, and other definitions will be closer to what you need in your business.
But this essential description of SMART goals will be enough if this is your first approach to this concept.
Benefits of SMART Goals
SMART goals helps organizations grow.
If this is not important enough for you, SMART goals definition has benefited:
- Team working. If a team sets up its goals together, they will acknowledge the goals individually. If you measure the combined team’s performance based on their lack of previous knowledge they will most likely become disengaged with the goals.
- Better communication. When everyone knows the goals, everyone will be included and up to date.
- Better reporting. Projects with SMART goals are easy to track. For example, if you can follow up on your performance, then you will be in a better position to ask management for more resources.
- Visibility. With clear, team-sized goals you can easily explain your work. With numbers to support your effort.
SMART Goals in Energy Efficiency
Many of you may assume that you are using SMART goals in their efficiency plans, however sadly this may not be the case.
Specific goals are not easy to define in energy efficiency. For example, how do you answer to one of the top questions when approaching a building tenant:
How much will I save with energy efficiency?
We have discovered that many, many energy professionals usually answer: “From 5% to 30%”. Thats clearly not the SMARTest goal due to how broad of an estimate.
Of course, SMART goals are not the holy grail that will help you solve this kind of problems in energy efficiency projects. BUT they will help you with:
- Creating real expectations for your clients (or your boss)
- Checking how good or bad you’re doing while the project evolves, with a clear time limit (or deadline)
Let’s try with a general example related to energy efficiency. Imagine that you’re starting a new project in a new company. The company has multiple buildings all over the world and you’re at and it’s the start of a new year.
Try to answer, with SMART goals, the following questions from your boss:
- How many meters would we need?
- Budget: how much money will you spend?
- And more importantly, savings, answer: how much money will you save?
- How much can you save per building?
Instead of presenting disconnected or irrelevant answers, think of how did you picture your working year. What were your work plans?. Correlating your answers to a year, half a year. or into quarters will assist you in having time-related goals.
Once you fix this, lets transition to being realistic in energy efficiency. We know: it’s difficult to estimate how much money will you save. A nice start would be evaluating the yearly (or quarterly or half of the year) amount from past years.
Put that amount in front of previous efficiency actions taken and try to see the impact generated. This is an excellent way to estimate your savings. Instead of saying “I will save 20%” try to create goals like “in the first quarter, I will save 1,000€ in electricity for our main building”.
Try to commit to goals that you’re comfortable with! The previous example is also specific. You’re not saying “i will save 20%”. You commit to saving electricity in the first quarter, and then you specify from where you’re going to generate your savings.
This way of defining goals is measurable too. You can track your performance while you work, and you can check how good or bad you’re doing against the amount specifically set in your goal.
When we talk about assignable goals it means that, if you have to split the tasks related to the goal, you can also measure what you split between your team. However, is it really doable?
Perform SMART goals like a Pro
We know that this could be too overwhelming to start creating better goals immediately. Don’t panic. SMART goals are not rocket science, it’s just that it’s difficult at the beginning. What can you do to create SMART goals like a pro and start seeing the impact in your efficiency project?
Well, we will hold a specific webinar to chat about this topic next February 18th. Feel free to join, it’s free!
Feel free to send us your goals, we can review them and give you tips to convert them into SMART goals during the webinar. We will review many other real business scenarios so one can learn by example.
In the meantime,you can also check our free learning resources including case studies from companies that used SMART goals before in their energy projects and other learning webinars.