The A-Z of goal setting
The benefits of setting business goals
Setting a goal gives us a target to aim for; it gives us something to focus on and helps to keep us motivated; a natural by-product is enhanced performance. And the benefits don’t just appear when you meet the goal. There’s plenty of evidence to suggest that just by setting one in the first place you have a higher chance of being successful, whether you meet the challenge you set yourself or not – and in my view, that’s because in thinking about what’s required for a target, you’re already putting yourself ahead of people who don’t.
If that’s the case, then there’s a great reason to start thinking not only about goal setting right away, but about how you can get even better outcomes from the targets you put in place.
Science also tells us that you can increase your chances of success even further by writing down the goal and sharing it with others.
Setting business goals also gives you the opportunity to celebrate ‘wins’, rather than focusing on - and beating yourself up for - the things that you haven’t done. Of course a little self-reflection and criticism is perfectly healthy; you’d never drive your car by relying on the rear-view mirror, but you do need to check occasionally to make sure everything’s okay!
Ultimately, positivity is key – set challenges, identify goals and then use these to propel yourself forwards.
But all that being said, how do you ensure that you don’t box yourself into a corner with your goal setting? According to the ‘theory of constraints’ goal-setting is by nature self-limiting. Once you’ve set a goal, your subconscious accepts that as the limit of the challenge, so you tend to simply aim for that and are unlikely to exceed it or often even achieve it.
The solution to avoiding such constraints is to set yourself BHAGs – Big Hairy Audacious Goals: the idea being that you ‘aim for the stars’ with a target that may feel or sound a little ridiculous because of its ambition. It may sound a bit odd, but it’s a great way to maximise their benefits. While these extreme challenges may not be achievable in their entirety, by setting your sights high you won’t hit a ceiling you’ve unconsciously created for yourself by aiming too low.
Benefits in brief
Apart from helping you to focus on success, setting goals offers lots of benefits to you and your business, such as:
Provides clear direction
Provides clarity when making decisions
Puts you in control of your future
Gives you a sense of purpose and self-satisfaction
Encourages you to step out of your comfort zone and discover new skills
It’s clear that setting goals provides lots of opportunities for building on your current success, so if you’re not already doing this as part of your business development, then maybe it’s time to start! If you feel you need some help to set the right targets for your business, it may be worth attending a business goals training course [LN2] to help you develop the skills you need to keep pushing your business forward.
Measuring your business goals
Setting business goals is a great way to accelerate and achieve success but you need to bear two important things in mind when you’re deciding what your goals are:
I’d always recommend setting between three and five goals at a time – any more can be too many, and will be so absorbing that they become a whole new business activity in themselves, rather than an enhancement to your current business processes. Remember, you’re looking to enhance your current successes, not create a cottage industry that needs managing as a separate, additional entity.
In order to measure the goals you set, you need to ensure that information is:
Easy to understand
Easy to communicate
... and that your goals follow the ‘SMART’ principle:
Specific –targets need to be clear and detailed
Measurable – ensure you can measure progress/outcomes
Attainable – make sure they’re realistically achievable (apart from your BHAGs)
Relevant –they must be directly aligned with your business objectives
Time-bound – set a time in which you aim to achieve them
Methods of measurement
By using the SMART method outlined above, your goals are given a definitive structure that allows you to track progress based on a set of identifiable objectives.
By being specific about each goal, you and your team know exactly what the desired outcome is that you’re working towards. It’s one thing to say ‘We want to increase sales’, but quite another to put a value on that e.g. ‘we want to increase sales by 30% in six months’.
By setting tangible values, you can measure your progress along the way, enabling you to adapt processes as you go to stay on track. Sales is a good example because you can put an exact value on your products, and measure what you sell and how you sell it over the relevant time period along the way to show you’re heading towards your objective – or providing the opportunity to change tack if you aren’t.
Making sure your goals are relevant and attainable also ensures that you’re not de-motivating your team by expecting something that everyone can see is just not possible – for example, setting a goal to quadruple your sales within two months is a lot of pressure when it’s unlikely to be achievable.
If you’re not sure how to prioritise or measure your goals, you can always invest in some training or external support so that you can learn how to identify and implement the most successful strategy.
What should you measure to help you meet identified business goals?
Most businesses use Key Performance Indicators (KPIs) as a measure for gauging business success and meeting their objectives – but while they certainly have their value, to truly measure your goals you need to look forwards, not just backwards.
If you’re only keeping track of KPIs, you lose out on the opportunity to correct issues as they arise, which can take you way off target. So what’s the solution?
Instead of just thinking in terms of KPIs, you also need to implement a forward-thinking measure, such as Critical Success Factors (CSFs). They are very similar in nature but have the subtle difference of telling you what you NEED to do in the future, rather than what you ACTUALLY did in the past.
By identifying and communicating your business’s critical success factors, you’re essentially highlighting the performance elements of your business that are essential to your success – they lay out the steps you need to take in order to achieve your objectives. For example, in order to achieve more sales, you need to create more appointments with prospects – and measuring the latter will tell you whether or not you’re likely to meet your sales target.
You’ll still need to use KPIs as a reflective exercise to measure your success rate, but as you work towards your goals, critical success factors really are critical!
Performance and processes
Once you’ve identified your business goals, take time to set out the factors that are critical to achieving them. This gives you a workable template for processes to help you aim towards success.
So for example, if your goal is to increase productivity, critical success factors may include staffing issues, operational hours, streamlining processes and/or investment in new systems or technology. This guides you towards the actions you need to take to help you navigate your way to the desired outcome. It may be that one measure can become a proxy for several other things, reducing the amount of measures you’re trying to focus on.
It’s worth involving managers and staff in any departments involved in your goals, as they may be able to help you identify the most relevant critical success factors and KPIs. You may also benefit from some outsourced specialist support or training to help you implement a new system to help you manage this effectively. [LN4]
Setting measurable business goals – a case study
Defining business goals is a great way to keep you focused and on track to achieve greater success, so I wanted to share a case study to help you understand how the process can work, why Critical Success Factors are essential, and how to measure results.
Before my work as an outsourced finance director and trainer I used to work in a large bank, and the senior management had identified a need to clarify to their financial advisors (FAs) what they needed to do to ensure success. In theory, driving the FAs to success was easy, as achieving the desired results ultimately meant they’d earn a bonus – but how do you put this into real terms and allow them to track their progress?
In order to achieve this, I developed a new system to ensure that the FAs and their managers could measure progress and therefore the likelihood of hitting their targets in real-time.
The 6-3-3 system
The system we implemented was summarised as ‘6-3-3’, meaning that the advisors had a weekly target that consisted of:
- Six first appointments
- Three second appointments
- Providing advice on three different products
The three products were actually broken down across two customers attending second appointments, so 1.5 products per customer – although in reality, this would translate into two products at one second appointment, and one at another.
The advisors were still able to hit their target even if they didn’t manage six appointments each week, but if they missed their target every week, they became ever more unlikely to meet their success goals. Of course business fluctuations need to be taken into account, which tripped some of the FAs up – with two weeks over the Christmas period where they wouldn’t be booking appointments, they had to learn that they needed to make more appointments on the weeks either side of the festive break to bring up their average.
Critical Success Factors
By setting out a clear set of targets, the advisors knew exactly what factors were critical to their success – and in fact, the middle number was the magic number, and therefore the only one that really needed tracking.
Well, advice on products is always given at the second appointment, and you don’t get a second appointment without a first – so by measuring success at this stage, it was easy to track whether or not advisors were going to meet their target.
These clear success factors meant that both the advisors and their managers could easily keep track of targets and their progress towards them. And from a wider business perspective, the goal setting and the success it delivered allowed for a restructure that reduced the advisors by 40% without losing any revenue.
If you need some professional support to help you create an effective and easy-to-measure system for achieving your business goals, please take a look at my training programmes, or feel free to contact me to see how I can help. [LN5]