Goals are important – we’ve all heard the saying that "failing to plan is planning to fail" – but how do you make sure company targets are more than just words on paper?
It’s a question UKBF team member JCBrown posed on the forum and it got an animated reception. As the new year starts, it’s something a lot of business owners are thinking about, so we wanted to share advice from members on how to approach the topic.
Long-term ambitions can be broken down into years, quarters and months to understand what everyone needs to do to get there. That means goal setting can have a big impact on the performance of a business but it’s not an easy process.
There are a number of common mistakes to avoid when setting business goals:
Goal setting is tough, but not impossible – and can have a big impact.
It’s worth talking about that vision with your business partners, advisers and other important people in your life to get feedback and make sure everyone’s on the same page. Try writing out a one or two-paragraph vision statement to make it more concrete too.
Another good motivational technique is to set a BHAG – a Big Hairy Audacious Goal – that you want to achieve at some point in the future, eg. “Inspire 10,000 children to learn about science”.
You can then start to break down what steps you need to take to get there.
“For example, ‘grow user engagement on UKBF from X to Y’ and ‘grow newsletter readers from A to B’,” said UKBF founder Ozzy in the thread.
“As the business owner, it is my job to tie those to commercial performance, but for the team those are achievable. As everyone here can hopefully see, I then invest in the required recruitment and tools to help the team achieve the goals I set.”
The easiest way to test this is to ask an employee whether they know the three things mentioned above.
There are a number of great ways to include business goals in everyday activities:
Leading indicators call for people to complete a certain amount of activity, such as sales calls. Activity-based goal setting is powerful because it gives people a clear sense of what they need to do.
Often it’s best to have a mixture of lagging and leading goals.
Setting stretch goals alongside regular targets is a great way to set expectations and show people what will happen if the company has an exceptional year or they do particularly well.
“You can set all the goals you like – life tends to decide otherwise! My goals for 2021 were blown out of the water by C19.”
When this happens, don’t keep beating yourself up. Review the situation and update your goals accordingly.
The degree of complexity depends on the size of your business. If you have lots of departments and different products, you need to understand how their goals fit into the overall mission. If you’re a one-person band, a small number of straightforward annual targets is fine.
As tony84 pointed out in the goal-setting thread, it can be limited to a simple target and a to-do list for the day or week. He starts the year with two targets:
The best way to do this is to book time in your diary. This likely includes time to review performance around regular team meetings and, every quarter and year, to do more in-depth analysis and get feedback from external advisers.
Look for ad-hoc opportunities to thank and recognise staff when you spot achievements too, as MBE2017 points out.
“I have found a simple thank you, email, letter or phone call saying just that can often bear more fruit than a bonus. I come back to my previous point: some managers and leaders can carry the argument and sell a company's goals and values to its workforce, but most cannot.”
Hopefully, this article will help you get started or improve the goal-setting routine you have. The key is to start simple and keep iterating. Listen to your team too – they’re normally the best judge of how to do something.
If you’re interested in sharing your goal-setting experience or want some advice, you can join the discussion in the forum here; there are lots of UKBF members that are happy to help. Join UKBF here if you aren’t already a member.
It’s a question UKBF team member JCBrown posed on the forum and it got an animated reception. As the new year starts, it’s something a lot of business owners are thinking about, so we wanted to share advice from members on how to approach the topic.
The importance of goal setting in business
Business goals help people prioritise resources, including their own time. Working with your team to set these targets can galvanise people around a shared objective and make sure they understand the impact they have.Long-term ambitions can be broken down into years, quarters and months to understand what everyone needs to do to get there. That means goal setting can have a big impact on the performance of a business but it’s not an easy process.
There are a number of common mistakes to avoid when setting business goals:
- Employees are given goals without adequate resources to achieve them
- Management sets revenue goals based on their ideal outcome without working out how they will be achieved
- Staff don’t engage with goals because they can’t relate them to their own job role
- There’s no link between employee, team and company goals
- Business owners’ goals, such as a large exit, don’t inspire employees
- Poorly set goals incentivise negative behaviour, such as excessive discounting to hit sales targets
Goal setting is tough, but not impossible – and can have a big impact.
Working from a company vision to short-term goals
Start by thinking about what you want your company to be: what vision do you have of the future? Perhaps you picture a bustling office with a certain number of staff, a business sale that will fund a life on the beach or a sustainable business that doesn’t grow but creates a lifestyle you love.It’s worth talking about that vision with your business partners, advisers and other important people in your life to get feedback and make sure everyone’s on the same page. Try writing out a one or two-paragraph vision statement to make it more concrete too.
Another good motivational technique is to set a BHAG – a Big Hairy Audacious Goal – that you want to achieve at some point in the future, eg. “Inspire 10,000 children to learn about science”.
You can then start to break down what steps you need to take to get there.
Nine tested techniques to help you set business goals that work
Goal setting is different for every business, but here are some best practices that will help you get it right.1. Set “SMART” goals
The Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART) goal-setting methodology is a really handy way to test your goals. It helps avoid some of the most common points of failure, such as not knowing how a goal will be measured.2. Break goals down for individual team members
If team members don’t understand how they impact goals, they won’t engage with them. It’s important they know what their goals are, what they can do to impact performance and how that effort feeds into organisational targets.“For example, ‘grow user engagement on UKBF from X to Y’ and ‘grow newsletter readers from A to B’,” said UKBF founder Ozzy in the thread.
“As the business owner, it is my job to tie those to commercial performance, but for the team those are achievable. As everyone here can hopefully see, I then invest in the required recruitment and tools to help the team achieve the goals I set.”
The easiest way to test this is to ask an employee whether they know the three things mentioned above.
3. Develop goals with team members
People are much more engaged with things they’re involved in creating. If you dictate someone’s goals to them, you need to convince them and try to make them care; the goal-setting process can do that for you.4. Talk about goals at every possible opportunity
You often have to repeat things to make sure messages are adopted by the entire team. Goals are no different.There are a number of great ways to include business goals in everyday activities:
- Discuss performance in one-to-ones
- Question how an activity or investment will contribute to company goals
- Include progress updates in team meetings
- Structure meetings around goals, by getting people to report on what they’re doing and then giving a company-wide update
- Tie incentives and rewards to goals
5. The difference between leading and lagging business goals
When you set a sales goal, it’s a lagging indicator; the activity has already happened before the results are in. The drawback to this type of goal is that it’s too late to make a difference.Leading indicators call for people to complete a certain amount of activity, such as sales calls. Activity-based goal setting is powerful because it gives people a clear sense of what they need to do.
Often it’s best to have a mixture of lagging and leading goals.
6. Be ambitious but realistic
If your team thinks goals are unrealistic based on past performance or resources, they won’t buy into them. The key is to be ambitious but make sure goals are achievable.Setting stretch goals alongside regular targets is a great way to set expectations and show people what will happen if the company has an exceptional year or they do particularly well.
7. Understand when goals need to be reset
Sometimes life just happens; the last two years have shown us just how much external volatility can impact small businesses’ plans. As goal-setting sceptic The Byre puts it:“You can set all the goals you like – life tends to decide otherwise! My goals for 2021 were blown out of the water by C19.”
When this happens, don’t keep beating yourself up. Review the situation and update your goals accordingly.
8. Use the right level of complexity for your business
As a general rule, it’s best to keep goals as simple as possible. That makes them easier to communicate, which is half the battle.The degree of complexity depends on the size of your business. If you have lots of departments and different products, you need to understand how their goals fit into the overall mission. If you’re a one-person band, a small number of straightforward annual targets is fine.
As tony84 pointed out in the goal-setting thread, it can be limited to a simple target and a to-do list for the day or week. He starts the year with two targets:
- How much I need to pay the bills
- How much I would like to earn
9. Develop a reporting and reflection process
The most critical part of embedding the goal-setting process is making sure you have a helpful reporting process – and give yourself time to reflect on how well it’s working.The best way to do this is to book time in your diary. This likely includes time to review performance around regular team meetings and, every quarter and year, to do more in-depth analysis and get feedback from external advisers.
Look for ad-hoc opportunities to thank and recognise staff when you spot achievements too, as MBE2017 points out.
“I have found a simple thank you, email, letter or phone call saying just that can often bear more fruit than a bonus. I come back to my previous point: some managers and leaders can carry the argument and sell a company's goals and values to its workforce, but most cannot.”
What tools can you use to set and track goals?
The simplest way to track company performance is to use a spreadsheet. There are a number of tools you can use too.- Write the goals on a whiteboard
- Add goals to items in your organisational software, such as Trello
- Journaling can be helpful for one-person bands
Get goals right for your business and it can make a big difference
The difficult thing about goal setting is that it’s different for every business. A huge number of factors, like communication, values and team size, impact what the best approach looks like.Hopefully, this article will help you get started or improve the goal-setting routine you have. The key is to start simple and keep iterating. Listen to your team too – they’re normally the best judge of how to do something.
If you’re interested in sharing your goal-setting experience or want some advice, you can join the discussion in the forum here; there are lots of UKBF members that are happy to help. Join UKBF here if you aren’t already a member.
