Columnist John Spence, a top business thought leader, offers advice for strategizing business goals in the new year
John Spence is recognized as one of the top business thought leaders and leadership development experts in the world and was named by the American Management Association as one of America’s Top 50 Leaders to Watch, along with Sergey Brin and Larry Page of Google and Jeff Bezos of Amazon. He has been the owner or CEO of five companies and a guest lecturer at more than 90 colleges and universities. As a consultant and coach to organizations worldwide, from startups to the Fortune 10, John is dedicated to helping people and businesses be more successful by “Making the Very Complex… Awesomely Simple.”
As we begin the new year, many organizations create their plans and goals for 2022. Having spent nearly 30 years working on strategy and strategic planning for companies worldwide, I would like to offer a few thoughts about how to set goals for your business appropriately.
- Limit it to a handful of key goals that will have the most leverage in moving your business forward. If you have 17 priorities and 25 primary goals, you have set yourself up for failure.
I teach an executive level class at the Wharton School of Business on strategic planning. Each year, I ask my students what percentage of companies that have a solid business plan effectively executes their plan. The answer is 10 to 15%. That is why it is essential to identify the most important goals and focus relentlessly on them.
- Consider what things to say “no” to. What goals will you not pursue? What customers will you not go after? What products or services will you no longer offer?
At its essence, all strategy comes down to allocating scarce resources. A significant part of goal setting is understanding what goals are worthy of your limited time, people and money.
- It is critical when setting goals to make them binary. It must be abundantly clear whether someone achieved their goal or did not.
Goals like this go by several names. KPI is key performance indicators, OKR is objectives and key results, MBO is management by objectives, and there are others. What they all have in common are exceedingly specific and measurable goals.
One of my favorite phrases is, “ambiguity breeds mediocrity.” When people do not precisely know what is expected of them, it is impossible to deliver it.
- Goals are for people, not for teams or departments. No matter how large the project, there must always be one person who is ultimately accountable for delivering it. You can set a goal for a team, but it is always the team leader who is responsible for the results or lack of results.
A friend of mine who was a Navy SEAL has a saying that sums this up nicely. “There are no bad teams. There are only bad team leaders.”
- When a critical organizational goal is achieved, celebrate it with enthusiasm. Let people know that they have accomplished something important that will be meaningful to their success and the business’s success. Give out praise lavishly.
On the other side of the coin, if the organization fails to achieve important goals, you must show through your actions that mediocrity will not be tolerated. This is why it is critical to set clear and binary goals because it removes politics, personalities, egos and guessing from the equation. It is just data. You achieved the goal or you did not. If people continually miss the goals and there is no accountability, then what you are saying is that you were never serious about the goals in the first place.
I have seen many businesses that were excellent at setting goals and were phenomenally successful. I have encountered companies that set goals but did not execute them and achieved only a modicum of success. I have never seen a company that did not set goals and achieved sustained success. Great goal setting is fundamental to running a great business.
By John Spence