5 Reasons You Need Clear Business Goals and 4 Elements To Setting One

You Need Clear Business Goals

You’ve heard it before: you need to set goals.  Not just personal ones, and not wishy-washy hope-filled ones, but clear business goals.  But do you actually do it?  Really?  Specific and measurable ones like they say lead to success?  I thought not.  So I put together a list of things you can’t actually do until you’ve addressed that omission.

Vader Finds Your Lack of Clear Business Goals Disturbing

Without Clear Business Goals…

1. You can’t be strategic. Strategy is the selection of the best tactics to get you where you want to go. If you don’t know where that is, there’s no way to determine the best path. To use an analogy, if you’re going to take a road trip, you can’t choose if you should start heading north, south, east, or west until you know what destination you’re aiming for.

2. You can’t measure success. I worked with an organization to put on an event once, and we set a goal of getting 3,000 people to it. We got more like 1,000. Some on the planning committee considered it a great success because the 1,000 people that came had a good time. But we failed to meet the goal of getting 3,000 and “having a good time” wasn’t one of the criteria we’d set…nor even one that we measured other than by “gut feeling.”

3. Choices become harder. This is a direct result of the first two. If you don’t have a strategy, and you don’t know what or how to measure success, there is almost no way for you to be smart about eliminating options. Everything possible is always on the table, and there are no criteria for you to narrow them down. That leads a lot of people to just choose things at random, or whatever seems comfortable and familiar…neither of which is likely to be the most effective thing to do.

4. Necessary skills remain undetermined. Again, following on the previous, choices made more or less at random mean you’ll be running into needed skills that you may or may not have. This issue also echoes back up the chain as well. You might be more likely to pick an approach that you think you can do, even if you’re not great at it. Or even if it’s not the most efficient way to get the job done. That can pull you away from success because you start thinking that you can measure this thing, that must be what determines your success, which is a path that pulls you away from any chance of a good strategy. It just entrenches the lack of strategy. But what if hiring an employee, or a contractor, to do something different is the best way forward? There’s no way of knowing without a goal.

5. Automation is impossible. With a goal, you can find things that increase the chances of success and turn that into a systematic practice, a procedure, company policy, or part of the organization’s culture. That kind of continuous improvement and refinement of your practices simply can’t be done because different practices may support different possible goals. The goal brings coherence to the practices you systematize and try to make automatic.

What makes a good goal? Within the context of a small business, “more sales” won’t do. It’s not enough. Sure, it’s easily measurable, but it’s a given. Every business in existence wants more sales. It’s not specific enough to help you be strategic, make choices more easily, and determine what skills you need to carry out a plan.

Consider These Elements When Setting Your Clear Business Goals

1. Who? Often people create goals that are entirely self-centered. “I want to make more sales” is one of those. But working in a specific group of people helps with all of the reasons for having a goal. Compare the selfish example with, “I want to increase the number of women-owned businesses I serve.” Suddenly, I can set aside any options that are unlikely to bring me into contact with women entrepreneurs. That makes me more strategic. I can measure a ratio of female vs. male owned companies. I could choose social media sites based on popularity among women rather than focus on other demographic traits like age or geography or income (unless those are important to the business goal as well).

2. Where’s the Leverage Point? In many (most?) situations, there is a leverage point that may be different than the ultimate goal. That can be the low-hanging fruit, or the bottleneck in a process. Thinking of where you might get the most leverage when setting a goal helps you to step back from “this is what I want” and instead seeing your business more objectively, from the outside. It’s what E-Myth Revisited author Michael Gerber calls working ON the business, not working IN it; or what Sam Carpenter calls the “outside and slightly elevated” perspective in Work the System. If you’re outside looking in, you can more easily see these choke points and set goals that have a higher potential payoff.

3. What Threshold? One of the problems with “more sales” as a goal is that it cannot ever be achieved. Having one or more threshold in your goal gets you off the treadmill of more, more, more. It can focus your mind and your efforts on getting to a new and better point, where you can reassess. I mentioned the event goal earlier of 3,000 attendees. That’s a single-threshold goal. You might also have a dual-threshold goal. That might be where you say, “To be considered a success and done again next season, this project needs to bring in 100 new customers. It will be considered a failure and immediately scrapped, no looking back, if it brings in fewer than 50. In between the two is acceptable, but needs to be reviewed for possible improvements.” Notice that the threshold here effectively pre-decides what will be done, and measures success, simultaneously.

4. What Values/Philosophy? The late Marshall Rosenberg liked to say that punishment appeared to be effective only if you asked what kind of behavior you wanted from others, but didn’t look so great if you also asked the question, “Why do you want them to act that way?” In other words, you want people to take action because they want to, not because fear or circumstance or some other external factor forces the choice on them. To apply this to business, sketchy marketing practices might increase your sales in the short term–because you’ve tricked people into buying a product they don’t really want (or think they’re getting something else)–but is that why you want them to buy?

Take Action!

Did I stutter?  Set some clear business goals!  You’ve got the tools–set some great goals that help you be more effective in the future.  If you run into problems, or have an insight or success, leave it in the comments below.

Pre-Meme Image By William Tung from USA (SWCA – Darth Vader!) [CC BY-SA 2.0], via Wikimedia Commons, modified and memeified by Ardea Coaching.

Posted by Michael J. Coffey  |  1 Comment  |  in Goals, Strategy, and Planning

About Michael J. Coffey

Michael started learning about online marketing as the web store manager for a scrappy little game retailer during the "dot com bubble" of the 1990s. Since then he's helped fitness companies, tea wholesalers and retailers, lawyers, clothing designers, restaurateurs, and entrepreneurs in many other fields. In his spare time he drinks very high quality tea, writes letters with a fountain pen, and reads literature.

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