How to Set Annual Goals (Part 1 of 3)

Questions This Guidance Answers: 
  • What are MT goals?
  • How should I plan my annual goals?
  • How do I measure my achievements?

In this cast, we recommend how to start setting annual goals, and why we do not like "SMART" goals.

Many managers are going through goal setting efforts right now, for 2008. We get lots of questions about goals, and goal setting, this time of year. Sometimes, they're dispiriting. Managers seem to spend an awful lot of time word-smithing their intent into corporate frameworks. All that time would be FAR better spent thinking about the goals themselves, and how the achievement of those goals will help the organization.

A lot of managers have to create goals that are "SMART", and we don't recommend your doing so unless you have to. We dislike them SO much we almost called this cast, "SMART Goals are Stupid." (We REALLY don't like them). In fact, we spend a good bit of time in our introduction talking about SMART goals, so beware. The fact that the technique is so widespread and so often ineffective causes us to want to address it fully.

And hey, who would have thought that our answer would be "MT Goals"?


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When Mark first mentioned on the forums

When Mark first mentioned on the forums that he was not too thrilled about SMART objectives, I wondered what the problem was. I agree that making the objectives measurable and timebound is the main thing. If people get sidetracked by the other items on the SMART checklist for objectives: specific, attainable and relevant, then that it is not too smart.

When you first mentioned “MT goals”, it sounded a lot like “empty goals”. Now, that would been stupid.

Adragnes- Ha! We never thought of


Ha! We never thought of "Empty"...good one!

Happy new year all.


Great start to a timely topic. I meet

Great start to a timely topic. I meet next week with my boss to go over my IDP. While SMART objectives was the way with previous companies, I look forward to the remaining casts on this subject and hope to 'revise' my IDP accordingly.


Jim- Narrow and


Narrow and focus!


Okay, time to confess! I'm one of the

Okay, time to confess! I'm one of the people who hasn't sent colleagues here to MT. It's not because I don't want to be generous and share. It's because (1) the only other managers around are my bosses, and I don't want to imply they're bad managers; (2) I've written posts in the forums that I wouldn't want them to see.

Mark & Mike, is there any way an MT member can edit/delete very old posts?


R., No, there isn't a way for you to


No, there isn't a way for you to delete an old post/comment. However, send me an email and we'll figure out to get fix the problem (I can delete it, we can redact specific text, whatever).

I appreciate the balance between being upfront with one's views and "protecting yourself". Although I generally shy away from the idea of anonymity on the net (I believe a lot of the net's bad behaviors can be attributed to this practice), but it is easy to see some of the downsides of attribution.


Love the cast, as usual. I especially

Love the cast, as usual. I especially benefited from the discussion of the two types of stress. I realized that in attempting to avoid distress I had also succeeded in avoiding eustress. This explains my lack of growth and the stuck-in-a-rut feeling I have had. Now I can start setting real MT goals and seeking out some eustress to challenge myself. The hard part as always is waiting for part 2 and 3.


When I first saw the comments about

When I first saw the comments about "SMART" is dumb, I was concerned, but I have to say I agree, having heard the perspective. SMART was such an improvement over where I was (when that concept was forced down my throat), but it's not as good as where I am now. I think I'd discarded the extraneous stuff from my thinking, but not my vocabulary. The "dead man's rule" is still important, though -- a goal that a dead man can meet is pretty useless.

RefBruce- Glad you're getting value.


Glad you're getting value.

Hadn't heard the dead man rule, though...CLASSIC!



What Value Does the Yearly G&O Process

What Value Does the Yearly G&O Process Add?

When you say that SMART is dumb it got me thinking about G&O in general and your recommendation to be specific in particular.

I find the yearly G&O process to be useless bureaucracy. Maybe my experience is tainted because of the industry I am in (software development) or by my inabilities using the process.

8 years ago I was a second-line manager of a 20 person software development team. I did quarterly G&O with monthly reviews to track progress, and weekly one-on-one's with my directs. This seemed to work well and keep us focused and on track. Basically it was a rough kind of project plan where I could translate my company's goals into my team's action and the track progress.

Now, after the hi-tech bubble burst, I find myself as a first-line manager of a 4 person software development team. But this time I have new tools to use -- the Manager Tools tools (O3's with notes, Feedback, and Coaching). In addition we also keep a detailed and current project plan.

Yesterday my boss asked me to prepare G&O for the upcoming year. What I am finding is that the yearly G&O does not add anything especially if the goals are specific. We are already doing feedback and coaching. We are already tracking schedules and tasks. So what do G&O add?

If you say that G&O help you track the performance of your directs then I'll answer that I am already doing that with my O3 notes, coaching and project plan.

If you say that G&O help you stay focused then I'll answer that I am already doing that with my O3, coaching and project plan.

If you say the G&O are big items which are outside the coaching process and project plan then I will answer that you aren't using them correctly.

If you say that G&O help you communicate the corporate direction then I'll answer that the goals do not have to be Measurable and Time-bound to do that. In fact, by making the goals narrow you are limiting their ability to communicate the corporate direction.

In practice I have found that G&O are almost never relevant by the end of the year and are then either fudged at review time (for the directs you like) or used as ammunition against the directs you don't like.

Also -- I want to say "hi" to my boss, who is likely to read this because I shared my enthusiasm for Manager Tools with him. :-)

Steven- The Annual G&O effort does


The Annual G&O effort does have great value when paired with a management philosophy of follow through, reporting, feedback and performance measurement.

So, when everyone FAILS to do this, the G&O seems worthless. But G&O isn't worthless.

It's a case of putting one's best foot forward, only to drag the other behind.

And even if your boss knows, I'd say all the accuracy of your comments wouldn't cover up the less than positive attitude. Why bother asking if you have all the answers?

Maybe it's just me.


Mark, Sorry if I came across too


Sorry if I came across too negative.

Of course I do not have all of the answers -- my bad experience with the G&O process is an indication that I need to work on improving my skills in that area.

In order to understand the value of G&O let's try to work on a more specific case instead of talking in generalities.

Goal: Design, code, and test software component X by 1-Aug-2008 with 0 outstanding bugs. Deliverables are the Design Document, the code, the Test Plan, and the test results.

Measurable? Yes. Timed? Yes.

I see two problems with this goal.

(1) The date will change due to both external (eg: late and incomplete and changing requirements for component X, and other "more important" projects which will come along) and internal factors (underestimating the amount of work). Marketing pressure may also cause us to release before the 0 bug metric is obtained.

So sometime during the year either the goal will need to be changed to match reality or the employee will get a black mark on their review (which may or may not be deserved).

The quarterly update suggestion helps in that it forces you to make those changes throughout the year instead of waiting until review time.

But it still seems weird to set goals which you know in advance will be changing. And if your boss does not agree to the change it can (and will) be used against you.

(2) The same task will appear on the project plan and be discussed weekly in O3's. It will be monitored and tracked and recorded by O3 notes and project plan histories. All tracking data will be available at review time.

There is follow through, reporting, feedback and performance measurement even without the annual G&O process.

I understand that there needs to be corporate standards because not everybody does O3's and monitoring throughout the year. I also understand that it is important to have overall goals and strategies. But the G&O process might not be the best way to achieve it.

Sorry, but it is NOT weird to set goals

Sorry, but it is NOT weird to set goals that you "know" are going to change. The question is how hard you are willing to work to keep them from changing.

Not meeting a goal due to forces you choose to allow to affect you is not a reason to not set a goal. The alternative is no goal. And goals motivate behavior.

Goals are the equivalent of professional anti-entropy.


Great casts on MT goals - very timely.

Great casts on MT goals - very timely. Each goal we set is rated at the end of the year on a 5-point scale: 3 = Achieves Goal; 4 = Exceeds Goal; and 5 = Far Exceeds Goal. My goal for our group would be zero errors in all documents produced from February through December 2008, which would be an almost impossible feat given many of our timelines. However, I am concerned that setting the goal at zero means a 1 (unacceptable) or a 2 (below expectations) rating if not achieved. Would it make sense to define measures for each of these ratings (e.g., "Achieves" is less than 24 errors, "Exceeds" is less than 12 errors and "Far Exceeds" is 0 errors?) as long as the "Achieves" is a real achievement (not for "dead men")? I thinking of this in the context of what rating Mike would have gotten when he set a goal of zero outstanding help tickets by EOY and achieved having only 7(?) open - which from what I understand was a gallatically awesome achievement for his group.

[...] - (Comment on Manager Tools)

[...] - (Comment on Manager Tools) [...]

[...]       Now is a

[...]       Now is a popular time for small business entrepreneurs to cast vision and set objectives into the new year.  For a long time, managers have been using the goal setting formula known as SMART (Smart, Measureable, Achievable, Realistic, Timely) to set their annual goals.  Ray Silverstein is a sales columnist for  In his article, A Guide to Goal Setting, Silverstein explains what SMART goal setting is and how it works.    Also this month, blogger Mark Horstman has posted a 3-part podcast entitled How to Set Annual Goals.  Horstman hosts the blog, Manager Tools.   In an innovative and fresh look at SMART goal setting, Horstman claims that the seasoned formula is “intellectually flawed” and generally not applied properly in the workplace.  Mark Horstman suggests an alternate method, which he predictably calls MT goal setting.  [...]

Just to clarify in a couple of the

Just to clarify in a couple of the above posts, G&O = Goals & Objectives?

The cast was well done, as usual. It has helped me in formulating plans for my staff to set their 2008 Professional Goals (SMART), yes we still use these for now, but are in the process of changing.

Thanks gentleman.


Great podcast; enjoyed very much. I'd

Great podcast; enjoyed very much. I'd always agreed on achievable and realistic, but hadn't worked out that I could do without the S, R and A. Nice.

Have blogged about it here with due credit.

[...] So simple yet so powerful and so

[...] So simple yet so powerful and so true. This is a quote from a recent episode of the excellent Manager Tools podcast, and it has big implications for communications folks. [...]

Questions: How do you get directs to

Questions: How do you get directs to take more ownership of their goals? Does the direct draft their goals first and then get the bosses input? Does the boss define the goal and the direct is responsilbe for setting out the plan to achieve the goal? Is the direct responsible for sharing status re: the goal in the 03 or is the boss if the direct is not talking about their goals?

The problem doesn't seem to be SMART


Hi all,

The problem seems to be that people are unable to write goals which are SMART.   I agree that the M & T components are the ones which really drive behaviour and results.  When a goal is written without the M & T components, it isn't SMART, and it should be revised until it is.

Kind regards