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Setting Business Department Goals

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  • 1:09 SMART Goals
  • 1:35 Specific
  • 2:35 Measurable
  • 3:14 Attainable
  • 4:18 Relevant
  • 5:01 Time-Bound
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Lesson Transcript
Instructor: Shawn Grimsley
Setting goals is an important part of organizational management. In this lesson, we'll look at a method that departments can use to develop goals that fit into the overall vision of their organization. A short quiz follows the lesson.

Department Goals in Context

Meet David. He's the department head of his company's shipping department. His company produces sporting equipment, and his job is to make sure that customer orders are shipped out in a timely manner.

David's company recently revamped its mission statement and vision with a great focus on improving customer service. Dave's boss, the vice president of his department's division, has tasked David with developing new goals for his department that are in line with the company's vision and mission.

A goal is an end result you want to achieve. It's where you want your organization to go. You get to goals through a series of objectives, which are fixed, concrete and measurable steps taken that will help you achieve your goal. David's task is to set goals for his department that will help achieve the company's goal of providing excellent customer service. You can think of department goals as objectives that help a company achieve its overall goal.

SMART Goals

David should set SMART goals that meet the following criteria:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-bound

This is a well-known method of setting goals and can easily be remembered using the term SMART, which is formed by using the first letter of each criterion. Let's take a look at each criterion in a bit more detail.

Specific

David must set goals that are specific, clear and focused. Vague and ambiguous goals are very difficult to accomplish because they are hard to define. If you can't define or articulate your goal, then you will not be able to take steps to achieve it because you don't have a firm understanding of what you want to achieve. In other words, if you don't know where you are going, you have no way of getting there.

Let's say that David wants to improve shipping as a goal. Improving shipping really isn't specific enough. Improving shipping can mean improving costs, creating better packaging and handling or ensuring quicker processing times and quicker shipping to customers. A better goal to set is for David's department to have 75% of all orders processed and shipped on the same day they are placed. This goal is specific and definable.

Measurable

A smart goal is also a measurable goal. If goals are not measurable, they cannot be assessed. If a goal can't be assessed, then you'll never know if you are on the path to successfully achieving the goal or on the path to failure. David's goal of having 75% of all orders processed and shipped on the same day they are placed is measurable. Currently, only 57% of all orders ship on the same day. David can simply calculate the percentage of orders placed each day that have been processed and shipped.

Attainable

Goals must not only be specific and measurable, but they must also be attainable. In other words, they must be realistic. In our example, David needs to make sure that it's actually possible for 75% of orders to be processed and shipped on the same day they are placed.

After thinking about it, David realizes that his goal is probably not attainable. Customer orders can be placed 24 hours a day, but the shipping department only operates 16 hours a day and does not work on Sunday. Moreover, the carriers the company uses have a last pick-up at 7:00 p.m. and do not pick up on Sunday. In fact, about 30% of the company's orders are made 'after-hours' on the Internet. David needs to adjust his goal so it's attainable. He modifies the goal to having 75% of all orders processed and shipped within 24 business hours of an order being placed.

Relevant

Goals must be relevant to the company's vision. A specific, measurable and attainable goal doesn't accomplish much if it's not relevant to the company's vision or mission. In fact, it may be counterproductive. Let's look at David's goal.

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