Business Goal Setting
The Key to Growth and Success
As we begin a new year, our hope is to continue to grow our businesses in both revenue and profitability. One of the most important responsibilities of leaders is to establish goals for their business. As a business grows, it becomes more difficult to align the efforts of increased employees. During the start-up phase of a business, communications tend to be informal and it is easier for the owner to ensure that expectations and plans are clear because there are fewer people. However, adding employees adds complexity, and it becomes critical to formalize goals to ensure that everyone is on the same page.
Business goals act like the connective tissue that holds together all the various initiatives, processes, and tasks that make up the complex systems of a business. Leadership teams that take the time to intentionally create and communicate goals and to ensure that rewards are aligned appropriately will reap the benefits of engaged employees, lower turnover, shared accountability and greater financial success.
Goals are generated as a result of some overall business planning. That plan should include a Vision (where we want to go) and a Mission (generally how we are going to get there). That part of the plan should remain constant over several years but should be reviewed on an annual basis to insure its continued relevance. That relevance is insured by a review of both the internal and external factors in the business and its environment.
At the start of each year, that overall plan needs to be reviewed for the status of longer-term goals (those part of a multiyear process) and those shorter-term goals established to be accomplished during the previous year. Goals for the coming year, both long-term and short-term need to be established based on previous plans and current needs.
Before the actual development of goals, please consider what categories of goals should be considered. These overall categories might include, sales, marketing, people development, and productivity to name a few. These categories represent the important areas where development needs to be accomplished for future success. Writing goals with each category provides balance to the plan and helps in prioritizing.
Write each goal using the acronym WHY SMART
W-Written. The act of writing a goal on paper is a first level of commitment to achievement
H – Homogeneous. Don’t write goals which are in conflict with one another.
Y-Yours. Don’t allow others to give you their goals. This may be difficult when others may be involved in developing organizational goals. Ether commit to those goals or creat your own, which might be slightly higher.
S- Specific. Avoid goals which are vague, such as being better or being healthier.
M- Measurable. Be able to measure the accomplishment either numerically or obtaining reward, such as a certification.
A-Achievable. Beware of stretch goals which may not be achievable. Once an individual realizes that a goal is beyond the realm of possibility they will give up on its achievement.
R-Realistically High- Never be satisfied with the status quo.
T- Time Based-Most people have difficulty making a commitment of when the goal will be completed. Making that commitment may lead to a better understanding of the availability of resources, both time, financial, and talent.
Each goal needs to have a step-by-step plan for its achievements. What steps are required? Who is responsible for each step? When will each step be completed?
Finally, progress toward the completion of each goal needs to be reviewed on a regular basis. What obstacles have been encounted? How can they be overcome? Has the environment, either externally or internally changed, requiring a notification or reprioritization? Business planning and goal setting need to be a flexible process which can adapt to either new knowledge or a changing environment.