How to specify challenges and goals correctly

From What is a “SMART” Problem Statement at McKinsey? by Working With McKinsey:

The problem statement clearly defines, in a concise but comprehensive way, the key business problem that needs to be solved. Even though it’s called a problem “statement”, it’s usually in the form of a question.

SMART is an acronym for Specific, Measurable, Action-oriented, Relevant, and Time-bound.  A good problem statement should be all of those things. The challenge is to balance being thorough with being concise.

Some examples from problem statements that are not SMART:

– Not specific: “better manage the business…” – this is too generic and doesn’t suggest where the greatest impact might be, how, or by when to capture it.

– Not measurable: “reverse our deteriorating performance…” – without specifying what metrics best reflect “performance”, it’s impossible to assess whether or not we’ve made progress.

– Not action-oriented: “increase sales and decrease costs…” – while these are both appealing goals for any company, they have to be actionable to create impact.

– Not relevant: “increase profits by raising prices…” – this sounds good, but not if the client is selling a commodity that sells at market prices.

– Not time-bound: “eventually increase profits by 10%…” – a specific deadline is needed to motivate people to action, hold them accountable, and know if the project was successful.

Notes: (1) McKinsey’s rigor around fundamental processes is stunning; another example I quoted is the McKinsey Feedback Model. (2) For more on SMART, see the Wikipedia page.

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