SMART²: Why goals and KPIs deserve their own rules

We all know SMART goals: Specific, Measurable, Achievable, Relevant, and Time-bound. It’s management’s equivalent of “eat your veggies.”

SMART is great… but here’s the catch: it was designed for goals, not for KPIs.  Too often we hear about unused dashboards or leaders waving different metrics to prove their point. Cueing a 20-minute debate about definitions, data quality, and whose number is the “real” one. By the end, nobody feels wiser, no decision has been made, and the meeting ends with the dreaded “Let’s circle back next week.”

Lots of effort with little impact.  Sound familiar?

That’s what happens when KPIs aren’t SMART. They become bargaining chips instead of guiding stars. Teams chase vanity metrics that look good on slides, argue endlessly about numbers instead of acting, or quietly ignore dashboards altogether because they don’t trust the data.

So let's see if we can adapt SMART to make it more suitable for KPIs: a two-SMART system, something like SMART².  SMART 1 for setting goals, SMART 2 for testing KPIs.

Because goals and KPIs are different animals.

Goals, KPIs, KRs, and KRIs — Let’s clear the air

Before we get into SMART², let’s untangle the alphabet soup:

• Goals (or Objectives): Ambitious, often qualitative. Where you want to go.

  “Become the market leader in Belgium by 2026.”

  
  

• Key Results (KRs): Quantitative outcomes that show if you’re hitting a goal.

  “Sign 10 new enterprise clients this quarter.”

  
  

• Key Performance Indicators (KPIs): Ongoing performance gauges. Think speedometers.

  “Monthly client acquisition rate (%).”

  
  

• Key Result Indicators (KRIs): Lagging proof of outcomes, often financial.

  “Annual revenue growth.”

👉 Goals = direction.

👉 KRs = milestones.

👉 KPIs = gauges.

👉 KRIs = results check.

SMART² — A second SMART just for KPIs

So how do we keep KPIs sharp, relevant, and believable? With SMART for KPIs:

• S – Specific

• M – Meaningful

• A – Actionable

• R – Relative

• T – Trustworthy

Here’s how each one works:

S – Specific

"If it’s vague, it’s useless."

A KPI must measure one clearly defined thing. “Engagement” is not specific. “Average report refresh time in seconds” is. Document the scope, the formula, and the unit. That way, two people looking at the KPI won’t argue about what it means.

Sanity check questions:

• What exactly does this KPI measure?

• Is the formula documented?

• Is the scope (region, unit, system, time) clear?

• Would two people interpret it the same way?

• Could a newcomer understand it from documentation alone?

M – Meaningful

"If it doesn’t matter, don’t measure it."

Dashboards love vanity metrics. But a KPI is only worth the pixels if it’s tied to business value. A meaningful KPI is aligned with strategy, important to stakeholders, and simple enough to explain without resorting to interpretive dance.

Sanity check questions:

• If this KPI improves, does the business benefit?

• Is it linked to strategy or a critical success factor?

• Could it be gamed without real value?

• Would leadership or clients care about it?

• Can it be explained in one sentence?

A – Actionable

"If you can’t act on it, it’s just trivia."

KPIs should change how people behave. If a KPI can’t be influenced by decisions, it’s frustrating to track. Actionable KPIs identify levers a team can pull — and ideally, they’re leading indicators, giving you time to react before disaster hits.

Sanity check questions:

• What levers can move this KPI?

• Is it within the team’s control?

• If it’s off track, can we act quickly?

• Is it leading (early warning) or lagging (post-mortem)?

• Would tracking it actually change behavior?

R – Relative

"A number without context is just noise."

“Utilization is 65%.” Okay… compared to what? KPIs only make sense when you compare them with baselines, targets, or benchmarks. Without context, you can’t tell if the number is good or bad.

Sanity check questions:

• What’s the baseline?

• Is there a target or threshold of success?

• Can we benchmark against peers or industry?

• Is it tracked over time to show trends?

• Does it make sense relative to other KPIs?

T – Trustworthy

"If people don’t believe the number, they won’t use it."

The number one reason KPIs fail isn’t relevance — it’s trust. If stakeholders think the data is dodgy, they’ll ignore it. Trustworthy KPIs come from accurate, consistent data, with definitions that don’t change every week. And they show up reliably (no “oops, missing this month” excuses).

Sanity check questions:

• Is the KPI based on an authoritative data source?

• Are formulas and definitions stable and documented?

• Is the data validated and updated consistently?

• Do stakeholders trust it enough to act on it?

• Could it withstand an audit or external challenge?

  
  

A famous KPI: Netflix’s Hours Viewed

One of the most famous KPIs in the world: Netflix’s “hours viewed” metric.

Netflix used to count a “view” if you watched just 2 minutes of a show (yes, bathroom break included). Critics laughed, so they shifted to total hours watched, which they publish in their What We Watched reports (Netflix newsroom).

Let’s put Netflix’s KPI through the SMART² test:

• S – Specific: Yes. It measures total hours streamed. Clearer than “engagement.”

• M – Meaningful: Yes. Viewing time is strongly correlated with engagement and retention. If people binge, they stick around.

• A – Actionable: Yes. Netflix can influence it with better recommendations, hit shows, smoother playback, and clever release timing.

• R – Relative: Yes. Netflix shows it over time, per title, and even compares regions. Context is baked in.

• T – Trustworthy: Yes. It’s based on streaming logs. Though outsiders can’t fully verify, internally it’s about as solid as it gets.

  
  

👉 Verdict: Netflix’s hours viewed is a SMART KPI. Not flawless — longer content can inflate numbers — but it ticks the boxes and reflects what matters to Netflix’s business.

How to use SMART² in your organization

• Audit your dashboards: Run each KPI through the SMART² questions. Retire the duds, less is probaby more.

• Define ownership: Every KPI needs a data owner and definition doc.

• Communicate simply: If you need three slides to explain a KPI, it’s not SMART.

• Pair with SMART goals: Goals inspire, KPIs guide. SMART² ensures both work in harmony.

• Review regularly: Business priorities shift, KPIs need to evolve.

Wrapping Up

Goals and KPIs are different. Goals need ambition; KPIs need trust. Classic SMART works for one, but not the other. That’s why SMART² matters:

• SMART Goals for clear ambition.

• SMART KPI's for reliable measurements.

Together, they give you a performance system that inspires and guides.