Strategic commercial interventions: SMART objectives and objective bank

1. Purpose and Rationale

Projects can fall short of meeting their goals due to a lack of consensus on the definition of success. SMART (Specific, Measurable, Achievable, Relevant and Time-Limited) objectives use a specific set of criteria to help ensure that objectives are clearly defined and attainable within a certain timeframe.

In general, for each intervention we would expect to see:

• Clearly articulated objectives setting out how the outcomes for the asset can be achieved for the strategic commercial asset, both in the short and long term.
• Objectives are aligned with national and regional policy objectives and the priorities set out in the National Strategy for Economic Transformation.
• A series of SMART objectives may sit underneath strategic policy objectives set out and agreed with ministers.
• Clear review points in the process for re-assessing the validity of objectives to ensure continued relevance.

The HMT Green Book states that “clear objectives are vital for [the] success” of a project, and that “a lack of clear objectives negates effective appraisal, planning, monitoring and evaluation”. ^[1]

These principles are highlighted further in the Scottish Public Finance Manual (SPFM) where it states that, “Objectives and outputs should be set out clearly and relate explicitly to policy or strategy. They should be defined so that it can be established by evaluation after the event whether and to what extent objectives have been met. It is important that objectives are not described in such a way as to exclude options. Ideally they should be specific, measurable, agreed, realistic and time-dependent (SMART).”^[2]

It is therefore crucial that when the Scottish Government intervenes to provide financial support to a business considered to be of strategic significance to Scotland, that clear and measurable objectives are considered. Officials should define clear and assessable objectives early in any intervention process to ensure everyone within the project team, including external stakeholders such as the board/management of the company subject to the Scottish Government’s (SG) intervention and any external commercial advisors are able to easily understand their role in contributing to the success of the objectives set.

Setting and agreeing priorities works most effectively where there is a mutual understanding of the delivery context and the roles and responsibilities of Ministers, Chairs, Boards, Chief Executive and senior officials (this can be applied further to shareholders in the context of intervention.) A shared agenda should help determine priorities and resource requirements and inform corporate and business planning processes. Where priorities change in the course of the year, proactive engagement is important to determine how affordable and manageable any new demands are and how they can be delivered (this should also be reflected in revisiting the SMART Objectives with proactive engagement amongst shareholders).^[3]

By agreeing specific review points through the intervention lifecycle, officials should be able to measure their progress and whether the objectives originally agreed are on course to be met or whether there is a change in direction within the intervention which may result in new objectives being agreed.

This guidance note is designed to assist officials when developing objectives as part of a new or existing intervention process.