SMART Goal Setting: Good for KPI’s, MBO’s, BBQ

19 October 2012


The “SMART” goal setting methodology is well known (“SMART” goals are “Specific, Measurable, Assignable, Realistic and Time-related”). In a recent webcast Iconixx Software’s Bruce Jackson and Carolyn Jenkins described how SMART goal setting should apply to KPI (“Key Performance Indicator”) development. KPIs are often used as a kind of short-hand for describing performance objectives in sales compensation programs (as are their equally ubiquitous and roughly analogous cousins “MBOs,” which stands for “Management by Objective”). Jackson and Jenkins discuss their merits in the context of Sales Performance Management (“SPM”), in their session “The Importance of KPIs in SPM.” [It’s perhaps a good time to point out that all the really solid management ideas should be communicated anagrammatically, btw.]

KPIs, say Jacobson and Jenkins, allow sales managers to consistently define performance, identify developmental needs, and direct focus around important objectives. They go on to suggest various kinds of KPIs, how to differentiate between measures, metrics, and KPIs, and how to apply SMART techniques to KPI development.

Their remarks include the following suggestions:

  • Focus each KPI is focused on a specific, narrow goal
  • Ensure KPIs can be quantifiably measured and reported
  • Test whether a proposed KPI is “assignable” — that is, ensure that you can identify who on the team will be working to achieve the specific objective
  • Confirm KPIs are achievable and realistic
  • Accurately assigning a time boundary for KPI achievement

The webcast includes several helpful illustrations and examples of KPI development, and a few suggestions for implementation success, including: provide reporting early and often, and include important stakeholders in KPI development.

For Sales Management Association members, view the complete webcast and download the slides here.

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