A quarter of the way into the New Year, the end of the financial year, it’s an opportune time to talk about goals and goal setting. How has the last period or year gone for your business? Did you reach your goals? Achieve what you wanted? Did you even set goals for your business?
The advice from everywhere is to set goals if you want to achieve anything substantial in your business or life. Goal setting is deeply embedded and a fundamental element of management and leadership practice. The evidence is irrefutable; set goals and do it well, good things will happen for your business. Challenging, specific goals lead to higher performance than soft, vague goals such as do your best. Yet we constantly see businesses small, large and corporates; that aren’t performing as the owners need them to, not performing to their potential or even more concerning drifting or sometimes hurtling along a path to irrelevance and ultimate demise. The reasons for this are varied but a common central cause lies in their choice of goals and the goal setting processes within the business. When we dig deeper the underlying root cause is issues around the; thinking required to select the right goals, and the discipline to effectively make them a reality.
The SMART Goals process which breaks a goal down into realistic measurable chunks, with a timeline is a great discipline to turn something you hope will come true into concrete plans and action. Despite being a compelling and popular methodology SMART goals are not always that smart. In the business context SMART goals are great for providing focus and boosting a number, yet often businesses find they fall short of achieving their bigger picture objectives, and especially so for those shooting for a big, hairy audacious goal (or BHAG introduced by Jim Collins in the book Built to Last: Successful Habits of Visionary Companies). SMART goals are better for steady-state environments than for complex or changing situations, due to the assumptions underlying them that the goals chosen to be SMART are worthwhile. Other problems exist due to the nature of SMART goals being outcome focussed; lack of emotional connection to the aim being pursued, drive short term thinking, minor setbacks can cause demotivation. Also SMART goals tend to end up focussed on menial, unproductive tasks (so people feel productive) rather than on difficult goals essential for the business to achieve its aims and full potential.
Stretch Goals or BHAG, are those goals that are essentially dreams, a picture of a destination to set business objectives and targets. Goals that you have no real idea of how to get there! Forcing your business to commit to ambitious, seemingly out of reach objectives, creates energy to jolt everyone from compliancy, to force new ways to do things, new thinking to reshape the organisation and built a new future for the business at levels of performance significantly different than before. The problem with Stretch Goals is that they can cause panic (as how do we do it!) and people aren’t convinced that success is possible – too big a goal - can crush moral. Also a stretch goal focussed on singly can cause people to act in ways to the expense of the business itself. Having an improvement mind-set to goal setting also allows people to believe in the goal, and empowers people to take risks as they are be less afraid of failure, which is vital to goal achievement i.e. To be a great marketer – your people and your business have to learn to be a great at marketing.
There is a solution to the issues experienced with Goal Setting, which is to pair Stretch Goals (BHAG) and SMART goals. Determine your biggest ambitions, your dreams, in your mind or on paper draw your picture of future success. Describe your goals or BHAG - that may seem impossible (remember if you know how to get there – it’s not a stretch goal). Then start breaking that goal down into short-term, concrete objectives and steps. What is realistic, achievable, measurable, realistic progress we can make this year? This Quarter? This Month? This Week? This Day? A big ambition underpinned with SMART system, a plan, so you and all your people take realistic and concrete steps towards the achievement of the goal on a day by day basis is the path of success.
Of course doing this is often easier said than achieved in a business when faced with the pressure of managing the business day to day. Long-term success depends of the quality of big picture thinking required to select the right Stretch Goals, and the leadership, decision making and communication processes in the business that provide the discipline to effectively turn big ambitions into reality.