More than three-in-four companies have a 5% or higher growth goal for 2014. Contrast that to the fact that 47% of CSO’s are not confident they will make their revenue goal. With real economic growth at approximately 3%, something’s got to give. Fewer than 50% of B2B companies will make their targets this year.
The above facts raise a couple of questions. Why do so many companies miss their revenue goals? Is it because they can’t execute on the strategy? Often, we find this is the case. I propose that many misses are due in part to something even more basic. If you haven’t built objectives that follow SMART guidelines, that may be a core reason for the miss.
How Are You Tracking Success?
Where will your company fall on revenue attainment this year? Already half-way through the year, you probably know if you’ll make the target. Are you setting up your sales team and company for success?
Right now you could be thinking “Yes, I’m setting our company up for success.” You have a tight focus on work that will drive improvement. But how exactly will you define success? What will you measure? What is your goal? Saying things like “We’re going to improve our win rate” is meaningless. Knowing the specifics that define success is a basic requirement. Measuring progress is critical as well. Without success metrics and a view of progress, you’re wandering in the dark.
It’s concerning how many leaders don’t use specific goals to define initiative success. Ever find yourself asking if an initiative was successful and you really don’t know? Stop guessing. Download our Sales Ops SMART Measurement Guide and get the answers. Frame up your initiatives with measures of success.
Start With the S.M.A.R.T. Approach
The very first thing you need to do is build S.M.A.R.T. objectives. Without this basic approach, you’re off to a bad start. Thanks to Peter Drucker, any good manager or executive knows the SMART acronym.
- S = Specific. Are your objectives specific? Saying you will improve win rates isn’t sufficient. Saying you’ll improve win rate with a precise definition of Win Rate is required. Have a baseline and the exact goals that will define success.
- M = Measurable. If you can’t consistently measure the item linked to success, find another variable to measure.
- A = Achievable. This means that the objective can be reached by stretching. It also implies that the objective is not set too low.
- R = Relevant. If the objective you have has no relevance to your company objectives, why bother? Ensure the objective supports or aligns with other company objectives.
- T = Time-bound. Meeting all the above criteria but not having timing specified is counterproductive. Assigning dates to achieve the objective keeps the team motivated to act.
The SMART acronym may seem like it is a basic approach. Yet, I can’t stress enough how often we see companies that set objectives without meeting these criteria. Larger objectives frequently reviewed by the executive team may follow these rules. What about the work that feeds these larger objectives? They must be held to the same standard. Obviously, revenue goals are specific, measurable, relevant and time-bound. However, as illustrated in my opening point, they are often not achievable.
Apply this approach to all you and your team does. It doesn’t take long to ensure these rules are followed. If meeting the objective is important, make sure it’s SMART. Download our Sales Ops SMART Measurement Guide now.