Copyright

SMART Performance Metrics for Business Innovation & Improvement

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Evaluating innovation and continuous process improvement needs to be SMART. That means being specific, measurable, attainable, relevant and time-based. In this lesson, we'll talk about each principle.

Get SMART

As the leader of the innovation team at ABC Cool Products, Janice is focused on creating products and services that her company's consumers will find fun and useful. As part of her job, she's also concerned with continuous process improvement, the ongoing endeavor to make existing products better.

Janice is always trying to measure her department's success in both its innovation and improvement initiatives. However, she hasn't landed on any metrics that seem to work. She needs something that's easy to understand, able to be communicated to team members and stakeholders, and can give insight and direction into both successes and failures.

She finally stumbles across an article about SMART performance metrics, a concept she's not familiar with. She thought she was already being smart! Well, there's a difference between being smart and being SMART, as Janice found out. Let's take a closer look at these SMART metrics Janice learned about.

SMART Performance Metrics

Lots of businesses use the SMART acronym, for everything from setting organizational goals to conducting performance reviews to evaluating innovation and continuous process improvement. While SMART metrics are, ultimately, also 'smart', they represent something much more detailed: Specific, Measurable, Achievable, Relevant and Timely performance metrics that can be used to measure success.

Specific: The specific metric can help Janice's department move away from vague goals or objectives to a clear and targeted direction. Instead of saying, 'We want to sell more of our products,' Janice's team could say, 'We want to make improvements to one particular product to increase its sales.' Being specific helps to define exactly what you want to achieve and sets the path for how you're going to get there.

Measurable: Innovation and improvements, to be successful, should be measurable, meaning that you can put a number or figure to what your department is doing. For example, Janice's department may want to increase sales of its pet products, but they need to set a more measurable objective. Instead, they might determine to create two new products for dogs that will increase sales by 20 percent. Creating measurability allows a business to clearly see what's working and what isn't.

If you can measure the successes and failures of a company, then it fits into the M part of the SMART acronym
graph_showing_profit_and_loss

Attainable: It's easy to want to set lofty goals, but if they aren't attainable, it can set a department up for discouragement and failure. Attainable objectives should be challenging enough to encourage and motivate Janice's team, but still within reach. In evaluating innovation and improvement, a focus on attainability will help keep Janice's team focused. For example, they may choose to focus on creating five new products in the course of the year instead of 50 new products.

Relevant: What's relevant to Janice's department requires asking a few important questions: Do the department's priorities align with overall business objectives? Do the innovations and improvements they see as necessary fit with current market trends? Focusing on being relevant helps to guide every action that a department takes to be sure it stays on track for both the business and its customers.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support