Is Your Business Getting SMART?

Businesses are facing increasing challenges in the marketplace. To stay competitive and to be successful, businesses need to take a holistic view of the company.

What are your critical success factors? (What are the activities that must happen and are critical to the success of your business?) How are you performing in the market? What's your market share? Are your customers satisfied with your product or services? Why or why not? Why do they buy from your competitor instead of you? How well are you performing compared to your competitors? How do you measure company performance? What are the key indicators of your company's performance?

A SMART assessment will help evaluate these areas of your business — and much more.

The SMART (Strategic Management Analysis Review Tool) process was developed by the Missouri Small Business & Technology Development Centers (SBTDC) and University of Missouri Extension. Its purpose is to help you understand the challenges and opportunities facing your business.

The principles of SMART were founded on world class principles for performance excellence. The SMART criteria represent an international set of practices associated with excellence and apply to all businesses, regardless of size, location or industry.

Too often businesses wait until it's too late before they change their strategy. SMART is a self-assessment that helps you recognize the company's strengths and identify missed opportunities for improvement.

The SMART criteria are built upon a set of core values and concepts that are the foundation for business requirements and results. These core values and concepts are: Customer-Driven Quality, Leadership, Continuous Improvement and Learning; Valuing Employees, Fast Response, Design Quality and Prevention, Long-Range View of the Future, Management by Fact, Partnership Development, Public Responsibility and Citizenship, and Results Focus.

Typically, a team of Missouri SBTDC counselors will conduct an extensive interview with the business owner and/or their management. The SBTDC team will work with you to chart a course toward long-term performance excellence and give you a detailed feedback report outlining your strengths and opportunities for improvement. We'll also work with you to develop short and long-term action plans.

The SMART criteria look at key business performance areas. The factors can change, depending on a company's business strategy, and they sometimes vary with different industries. The SMART process looks at your company in six categories:

Strategic planning
This category helps you to look at how you plan your company's future. Here the business examines the information used in planning and the key people involved in the planning process. The company also examines its performance relative to the strategic plan.
Customer and market focus
How does your company understand your customers, competitors and the marketplace? This category addresses how the company segments its market. Do you know the requirements of your customer, and how do you measure customer satisfaction? Gathering information from your customers will help you evaluate satisfaction with your product or service and determine future requirements of the market.
Process management
The focus here is how the company accomplishes its work. Processes are the set of actions required to accomplish a task. Process management includes not only the operational activities of the company, but support and management functions as well. The company examines and measures the processes that are critical to its success.

Some sample questions of issues addressed in this category include: What is your relationship to your business suppliers? Do your suppliers know what you expect of them, and how do you measure supplier performance? How does your business consider supplier and partner relationships in your strategic planning?
Human resource focus
Even small companies with a handful of employees need to be concerned about their workforce. Good performance comes from employee satisfaction, education and training. Effective communication is essential to ensuring that your company's employees have the information needed to perform well. In this category, you are asked how your company identifies and evaluates employee training and education, as well as employee satisfaction and well being.
Information and analysis
How does your business analyze information? How do you determine what information is needed? More often than not, businesses measure company performance by the bottom line only. Businesses often fail to evaluate those areas that drive sales and profit.

Sales and profit are end results, and at this point, it's sometimes too late to make improvements. This SMART category will help you identify other performance measures. There should be a good balance of company performance measures, such as operational, customer-related, employees and financial. All factors that are critical to the success of your business should be systematically analyzed.
Leadership
Leadership sets the directions for a business. As a leader of your company, you set goals and values of the company to employees and customers. The SMART team will help you evaluate how you communicate and promote your company goals and values. The criteria in this category help the business leader analyze how you review performance and your effectiveness as a leader.

Finally, SMART looks at your business results: comparing sales from year to year, market share, customer satisfaction, financials and a competitive analysis. The SMART team will help your business recognize its strengths and opportunities and work with you to develop an action plan for improvement.

Frequently, the "little things" can cause businesses to miss opportunities. Don't you think it's time your business gets SMART?

More information can be found on the Missouri Small Business & Technology Development Centers Web site on the SMART section.

- Virginia Wilson, business specialist, MO SBTDC. For Creating Quality Newsletter, Mar. 2001. Revised 2/19/08.