Archive for July, 2012

SMART Objectives: setting you up to fail or stretching you to success?

Friday, July 13th, 2012

I run my veterinary business based on objectives, I also talk about them a lot when I lecture about performance management. Objectives are supremely important to me in helping achieve outstanding results. They give me direction and are the foundation for the success I’ve enjoyed in my career.

stretching-for-success

So it caught my eye when Scottish rugby legend, turned BBC pundit, John Beattie penned a blog recently criticising the Scottish Rugby Union (SRU) for setting unrealistic objectives in its strategic five year plan.

Beattie’s problem with the plan is that he doesn’t believe it is possible and uses the SMART acronym (Specific, Measurable, Achievable, Realistic and Timely) to justify his position of yearning for a smaller, more achievable objective.

His article stands as a great example of two mistakes you might fall victim to in your practice when creating objectives:

  1. If you set easy objectives you might get everything you deserve, but you will not reach the heights you might have achieved.
  2. Mistaking a low level objective for a top level objective will ensure your business doesn’t fire on all cylinders.

Read on to find out why a clear understanding of objectives can help you achieve results beyond your dreams, whether you are a practice or a sports team.

Setting a high standard

One of the SRU’s top-level objectives (the one that got all the press) is for Scotland to win the next World Cup in 2015. For those of you not familiar with Scottish sport, this would be something of an improvement as we were rather unceremoniously dumped out of the last world cup at the group stages.

The objective is so at odds with past performance that it has attracted some unflattering comments. Many, including John Beattie, have blown a collective raspberry at the SRU for their audacity.

The objective is many things: Hard to achieve. Challenging. Outrageous. The stuff of fantasy. Ambitious.  But it is not impossible.

The alternatives provided by the sneering masses are generally myopic, uninspiring or just plain insulting.

Mr Beattie’s alternative, for example, is to “get every school in Scotland to field rugby teams and get a league up and running.”

Actually, to be fair to John, it’s not a bad objective, lacking in detail perhaps, but it has merit. My issue with it is that it not a top level objective. And as such it’s useless at giving the organisation strategic direction, unless of course your organisation is dedicated to school rugby. But the SRU is not. Its primary focus is the winning of as many elite level rugby matches as possible.

In the wider context of the SRU objective, Beattie’s personal objective (to have every child in Scotland play rugby) is an entirely appropriate stepping stone. Before a nation can deliver fifteen (the number of players in a rugby team) elite world-beating athletes, it has to throw the net wide and far to engage as many talented youngsters as possible. It’s just one that fits in further down the food chain.

And that’s his first error. He’s gotten muddled about in what order and where the objectives fit. Which is why he’s hosting a news column and someone else (hopefully more skilled in running large organisations) is running the SRU.

His second mistake is to think that it is somehow wrong to attempt to achieve the unthinkable.

Aiming high but shooting low

The SRU are correct to set an ambitious target. And it’s their job to plan, from the top down, how achieving this all happens – step by step.

But we Scots (indeed it is an entirely British disease) hate to get our hopes up too high.  We struggle with the notion of success, and are inherently more comfortable with the label of ‘plucky losers’. Just look at how Andy Murray has suddenly become a national hero after his courageous loss in the final of the biggest tennis tournament on earth to the peerless Roger Federer. Courageous or not, he still lost.

I suspect that this level of expectation has, over the decades, become a dangerously self-fulfilling prophecy. It’s now so culturally ingrained in our make up, that we scoff at the prospect of success and dare not believe we might just make it on the world stage.

The same could easily be said of the veterinary profession. Compare our business performance with that of dentists, doctors or lawyers and we are miles off the pace. Clearly there are a myriad of reasons for this, but high among them is the reality that we are too comfortable with the status quo.

We are in veterinary medicine, as Mr. Beattie has expertly demonstrated in sport, entirely comfortable with setting modest objectives – ones that can be achieved too easily.

Push the limits and we simply have no clue what to do or how to act.

And therein lies the problem with objectives, whether you are an elite sports team, or an owner of a veterinary practice. If you are happy to write an objective that is simply SMART then will not get all you deserve in life.

I think we can do better. Much better.

Raising your game

What I’m getting at here is that I believe that is quite possible to fail at achieving a grand objective, and still come out in a better position than if you succeeded at achieving a less challenging one.

Allow me to give you an example. Here’s an objective that a veterinary practice owner might write in a business plan.

“I will establish and manage a veterinary clinic that delivers 5% net profit before tax within three years.”

Here’s another, more challenging one:

“I will establish and manage a veterinary clinic that delivers a 30% net profit before tax within three years.”

One of these you might think is rather like Scotland trying to win the world cup. “A vet practice, delivering a net profit of 30% before tax?…What utter madness!”

But think about it. Which would you rather, beat your target of 5% by 2%. Or miss your target of 30% by 5%?

Kind of a no-brainer really, isn’t it?

Now let me ask you another question. Which of the two above profit figures are most veterinary clinics closer to delivering?  (If you guessed 30% you should set up a clinic immediately before someone tells you the ‘truth’ and scares you off your grand plan with their jaded version of reality.)

There are of course many reasons for this situation and I’ve written plenty on the subject. But one of the more likely causes is a lack of clarity about what practice owners actually expect to get out of their practices when they invest.

Very few owners set clear objectives at the outset and fewer still will review them regularly through the year. Those that do will almost certainly use fear of failure as an excuse not to make their objectives too challenging. SMART tells us that objectives must be realistic – so we must follow. Baaaaaah. Sheep follow, not business leaders. Sheep.

Using objectives in practice

In my business I have four top-level objectives:

  1. The first relates to the type of clinical service we provide.
  2. The second relates to the profit I expect to deliver from the practice.
  3. The third relates to the sort of people I want to work with.
  4. The fourth relates to how I want my life to look in 5 years.

Each is a challenging objective. None will be easy to achieve, indeed it is quite possible I will fail to achieve any. But by setting the bar high, it is very likely that even if I do miss out on my objectives, I’ll still be running a veterinary business that stands out by any measure of success.

If you need further convincing then the best example of a challenging objective I can give you is when John Kennedy said America would put a man on the moon.

How did NASA react to this? How did the people of America react? I’ll bet there were many people around the world thought it was nonsense, laughed and said it couldn’t be done.

For Scotland and her long-suffering rugby fans, it may seem like winning a world cup would be impossible. But if the SRU’s aim is simply to qualify for a world cup then it is certain they will never win it.

Similarly, in your vet clinic, if your objective is just to survive in these tough times, then don’t be surprised if the practice doesn’t fund your present or your future very well, if at all.

Today’s takeaway

SMART objectives are a good start, but if you want to achieve more then they need an update, personally I’d add in the word ‘Stretching’.

Have you got the S.M.A.R.T.S. to achieve a wee bit more?