Smart Goals Are Dumb

I’m going to argue something that will make every operations leader I know flinch: SMART goals are the wrong primitive for B2B revenue work.

I know. The acronym has been on a poster in every break room since 1981. I am still going to argue this.

The problem with capped objectives

A SMART goal — Specific, Measurable, Achievable, Relevant, Time-bound — has a structural feature that nobody talks about: it has a ceiling.

The ceiling is the thing that makes it Achievable. The ceiling is the thing that makes it Time-bound. The ceiling is, in fact, the entire point of the framework: to define the box you’re trying to hit, so you know whether you hit it.

This is fine for delivery work. If you’re shipping a product feature by Friday, give me a SMART goal. If you’re hiring three engineers in Q3, give me a SMART goal. If you’re closing $X by end of year, the framework is a useful conversation starter.

But here’s the catch: SMART goals are a terrible primitive for relationship work. Because relationships don’t have ceilings.

The compounding problem

When you set a SMART revenue goal — close $5M in new partnership-driven revenue this year — you have, by the structure of the goal, told yourself to stop at $5M.

The structure of the framework is “hit the number, then declare victory and rest.”

The structure of partnership work is “the number you hit this year is the seed of next year’s compounding, and stopping is the worst thing you can do.”

These are incompatible. The framework is fighting the underlying economics. And in a fight between an org chart and an underlying economic, the underlying economic always wins, eventually — usually right when the team is celebrating having hit the SMART goal.

What actually compounds

Individual goals — the kind a manager sets for an individual contributor in a 1:1 — almost always have a ceiling, by design. Hit your number. Take your bonus.

Partnership-driven revenue, in contrast, has no ceiling. The math is non-linear. If you make 50 introductions this year, and 5 turn into partnerships, and each of those throws off a long tail of additional referrals, you’ve done compounding work. There is no version of this where the right answer is “stop at $5M.”

The right answer is: keep depositing. Watch the variance. Don’t optimize for a quarterly target. Optimize for the trajectory of the trajectory.

This is not the kind of language you hear in a Q1 planning meeting. It is, however, the kind of math that actually describes how partnership-driven companies grow.

What to do instead

I’m not arguing you should run a B2B org with no targets. I’m arguing you need two layers:

• Delivery targets. SMART, capped, time-bound. These are operational. Hit them, celebrate them, move on.
• Compounding metrics. Uncapped, monitored over multi-year windows. These are strategic. You don’t celebrate hitting them — you celebrate not stopping.

Examples of compounding metrics for partnership orgs:

• MRRs added per quarter (defined in the previous essay)
• Inbound intros made to you per quarter (a lagging indicator of deposit velocity)
• Partnership-attributed revenue percentage increasing (not absolute)
• Sponsor return rate (a single number that measures the entire health of an event program)

These metrics don’t show up on a Q1 plan because they don’t fit the framework. The framework wasn’t built for the work.

The deeper point

The reason SMART goals are dumb for partnership work is not really about goals. It’s about how you think about the shape of B2B revenue.

If you think revenue is linear and additive — every deal stands alone, every quarter resets — SMART works.

If you think revenue is non-linear and compounding — every deal is connected, every quarter builds on the last — SMART caps you.

The companies I watch grow without ceilings have made the second move. The companies that hit walls at $50M, $100M, $250M have usually made the first move and don’t realize it’s the source of the wall.

I’d rather hit $4M and be compounding than hit $5M and be capped. The math, run forward five years, isn’t even close.

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One essay left: “Pi (π) = 3.14159…” — on why partnerships are non-rational and non-repetitive. Or return to the Partner Philosophy index.