SMART Product Management
In 1954 Peter Drucker introduced his book The Practice of Management, which popularised the management by objectives ( also known as management by results ) concept.
Management by Objective at its core is the process where managers and employees work together to set, record and monitor goals for a specific period.
The mnemonic S.M.A.R.T. is associated with the process of setting objectives in this paradigm. SMART, which is an acronym for specific, measurable, achievable, relevant and time-based, is an effective process for setting and achieving your business goals.
The first known use of the term occurs in the November 1981. George T. Doran, a consultant and former Director of Corporate Planning for Washington Water Power Company, published a paper titled “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives”. Since then, Professor Robert S. Rubin (Saint Louis University) wrote about SMART in an article for The Society for Industrial and Organizational Psychology. Many people popularised the concept and tried to adopt it. Probably that’s the reason why the acronym has several slightly different variations:
- S — specific, significant, stretching, simple
- M — measurable, meaningful, motivational
- A — agreed upon, attainable, achievable, acceptable, action-oriented
- R — realistic, relevant, reasonable, rewarding, results-oriented
- T — time-based, time-bound, timely, tangible, trackable
When it comes to writing SMART goals, be prepared to ask yourself and other team members a lot of questions.
S — Specific
A specific goal has a much greater chance of being accomplished than a general goal. The goal should be well defined and clear to anyone that has a basic knowledge of the project.
The best way to set a specific goal is to try to answer the six “W” questions:
- Who — Consider who needs to be involved to achieve the goal. This is especially important when you’re working on a group project.
- What — Think about exactly what you are trying to accomplish and don’t be afraid to get very detailed.
- When — You’ll get more specific about this question under the “time-based” section of defining SMART goals, but you should at least set a time frame.
- Where — This question may not always apply, especially if you’re setting personal goals, but if there’s a location or relevant event, identify it here.
- Which — Determine any related obstacles or requirements. This question can be beneficial in deciding if your goal is realistic. For example, if the goal is to open a baking business, but you’ve never baked anything before, that might be an issue. As a result, you may refine the specifics of the goal to be “Learn how to bake to open a baking business.”
- Why — What is the reason for the goal? When it comes to using this method for employees, the answer will likely be along the lines of company advancement or career development.
Broad goal: “Improve web site registration conversion”.
Specific goal: “Our current conversion is extremely low — only 5.7% of visitor signup. The goal is to improve it by at least 3%. Together with the designer and developer, A/B test different ‘registration’ button colours like red, green and orange on the main page. Test it for 14 days and at least 10k visitors. Third party app may be required to implement the test.”
M — Measurable
What gets measured gets done.
Once a goal has been defined, you need a way to measure your progress. This is where you setup of adjusting your company KPIs. It’s important to have measurable goals and be able to easily evaluate performance and communicate the results to everyone who is involved in the process. This way you keep everyone focused on the actions that actually contribute to the achievement of your strategy.
A measurable goal may address questions such as:
- How much?
- How many?
- How will I know when it is accomplished?
In our example, we’re trying to improve registration conversion by at least 3%. We will measure conversion results of different button colours to decide which one is the winner.
A — Achievable
Be realistic. There’s nothing wrong with shooting for the stars. However, your goal needs to be realistic and attainable to be successful.
Setting unattainable goals is a waste of time, and it can be discouraging to your employees to fail despite their best efforts. Strategic goals should be ambitious enough to motivate your team and push them to new levels of success. But, goal setting and KPI setting should never set your team up to fail. Always be realistic.
It’s a good question if it’s achievable to improve conversion from 5.7% to 8.7%. We should first understand what the good and perfect conversion rates are. Secondly, don’t think that we can achieve the proper rate by just changing the button’s colour. Let’s say that the good rate is about 20–25%. Can we try to reach 9%? We probably do.
R — Relevant
There are a time and place for everything.
Product prioritising is a huge topic, and we’re not going to talk about it here. However, it’s important to remember that you as a person or as a business have a list of goals to achieve. This list has to be short because it’s hard to achieve something if you’re not laser-focused on it. Moreover, your goals have to be aligned with where your business is going and to where it currently stands. We have to be sure that every small, short-term step we take is relevant to the greater end-goal. Even a great and crazy idea should be placed aside to make way for a higher priority item that is more in line with the overarching strategy you’re trying to achieve.
In our previous example, we wanted to improve signups conversion rate. We probably have some evidence that button is a problem. For example, we made a couple of 5-second tests, and we saw that people understand what the landing page and our product are about, they agree to make the next step, which is signup, but needs more time to find the ‘registration’ button. So, we probably should experiment with the button design and placement to make it more visible. This task isn’t relevant if we have tech problems the registration itself.
T — Time-based
Set a deadline for your goals. Providing a target date for deliverables is imperative. By setting it, you can stay on track with your objectives. However, it’s not enough to set a time-frame. It has to be realistic.
In our example, we decided to make an A/B testing for 14 days and at least 10k visitor. It’s a good amount of visitors to test our hypothesis. The number also based on the assumptions that we should have 10k visits in that period. If we have only 50 visits a day, we should consider other options to test our assumptions.
SMART is a useful tool that provides the clarity, focus and motivation you need to achieve your goals. It can also improve your ability to reach them by encouraging you to define your objectives and set a completion date. SMART goals are also easy to use by anyone, anywhere, without the need for specialist tools or training.