Every business book emphasises the importance of setting goals but how exactly should we set them? Setting business goals isn’t simply deciding on the things you’d like to accomplish and working towards them. Scientists say the brain believes that by setting goals, whether large or small, we are working towards a desirable outcome that is an essential part of our identity. Our brains then set up the conditions that drive us towards that goal because we always want to maintain that self-image.
Devoting time for goal setting amid a pandemic and a struggling economy is challenging but we stand to achieve more and better results by doing so. Here’s how:
Step 1: Tie your goals to your mission
The most important thing for your business is a mission. A company mission statement is the reason it was started. It could be service, social, profit, or growth. When motivation fails, your mission will help you continue the hard work. Canadian author Lawrence Peter once wrote; “If you don’t know where you are going, you will probably end up somewhere else.”
Start by distinguishing your long-term goals, usually five years, from your short-term ones that can be quarterly or even monthly. Once you have written them down, create a clear connection between said missions with goals. For example, if your mission is to build a reputation among local businesses as the most knowledgeable and reliable software resource around, the long-term goal would be say, ‘to enhance staff expertise’. The objectives would then be ‘to schedule regular training seminars’ or ‘have all staff certified by a certain time’. If you find the goals you have written down do not suggest a list of actions, you may need to re-evaluate what your business is about.
Step 2: Cover all the bases
All goals are not created equal. Without outlining all the goals in all the categories, prioritising is difficult. Consider these three categories your goals may fall into.
Profitability goals. Profit-making companies’ number one goal at the end of the day is to make money. Projecting a number for the year, gives you a bird’s eye view of what your revenue will look like that year.
Development goals. These are learning-oriented and spell out skills and experiences you and your team need, to remain effective. They include certifications, performance metrics and staying current on technology.
Day-to-day work goals. These goals exclusively deal with making your company more efficient. Reducing ongoing business costs, streamlining customer service processes, increasing traffic to your business or going paperless are great examples. As a start, write down one change you can make and the results will encourage you to move forward.
Step 3: Review these goals with your team
Your business is only as good as your team. They are the ones interacting with your clients, working on your products and driving your business goals to its accomplishment. They are the most valuable asset so getting enthusiastic buy-in from your employees gives them a sense of ownership in the goal. It helps them be aligned and have a common focus, rather than trying to outperform each another.
Lee Iacocca, one of the great business leaders of the 20th century, best known for developing Ford Mustang and Ford Pinto once said; “The speed of the boss is the speed of the team.” The team can never be more committed to success than you are but they will support a world they help create.
Step 4: Get organised
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Have you ever set New Year resolutions only to fall off the bandwagon in a few days? That is a result of being disorganised and unfocused. As with life, you need to accompany your goals with good habits and a schedule that makes hitting the targets easier.
Automate as much as possible. Use a calendar for both you and your staff, and add reminders. Use online to-do list software like ToodleDo to organise tasks, set deadlines, and prompt you for repeat actions. Put key goals on your office wall or in the staff meeting room to keep them visible.
A popular business tool is spreadsheets. With Excel, you have limitless ways to view, enter, and manipulate your goal and habit data, but you have complete control over your stuff and can make it private. What’s nice about spreadsheets is you can create reports and can customise your views in any way you see fit. Also, by using Dropbox, you can keep your tracker sheets anywhere you have a connection.
When writing your spreadsheet do not just input ‘Become an expert on python, start date March 1 – May 30’. Go further and make the small decisions now. Focus your brain power to break it down to ‘Learn introduction to Python March 1 to April 1, Learn python structures April 2 to May 1, and execute python programs May 2 to May 30’ and so on. Getting organised makes you stay focused on the bigger goal and not getting distracted.
Step 5: Set your KPIs
KPIs are key performance indicators which measure how effectively a company is achieving its goals. High-level KPIs may focus on the overall performance of the business, while low-level KPIs may focus on processes in departments such as sales, marketing, HR, support and others.
As HP founder, Bill Hewlett put it, “You cannot manage what you cannot measure…and what gets measured gets done.”
To define a KPI ask yourself what is my desired outcome? Why does this outcome matter? Who is responsible for the business outcome? How are you going to measure progress? How will you know you’ve achieved your outcome? Let’s take an example of a sales growth KPI. You will then define it as ‘To increase sales revenue by 20 per cent this year’. The why is ‘achieving this target will allow the business to become profitable’ and how you will know you achieved it is ‘revenue will increase by 20 per cent’
When all is said and done, review your KPI on a weekly or monthly basis, tracking your progress is essential in assessing how successful you were in developing the KPI in the first place. Lastly, make sure your KPI is actionable. For example, you want to sign up 1,500 new customers in the first quarter. You could divide the targets up equally per month. In this case that would be 500 customers in January, 500 in February and 500 in March. However, you may want to get more specific. There are more days in January and March than February, so maybe you want to set a target of 600 for those months. Or maybe you typically get more customer traffic in February (perhaps your business has a trade show) so you decide to set a target of 800 in that month.