Strategy Session: How to Set Goals for Your Business (Thinks Out Loud Episode 389)

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As I noted a week ago, if you’re like most companies, you’re about to start planning your strategy for next year. You started with a health check to assess where you are. Well, now it’s time to think about where you want to be. What are your goals for next year? More importantly, how do you set goals that inspire your team to achieve your objectives? How can you get your team aligned around a common vision for your organization?

There’s a fairly straightforward approach we tend to recommend for how you can set goals for your business. And that’s what this episode of Thinks Out Loud is all about.

Want to learn more? Here are the show notes for you.

Strategy Session: How to Set Goals for Your Business (Thinks Out Loud Episode 389) Headlines and Show Notes

Show Notes and Links

• How To Perform a Health Check for Your Business (Thinks Out Loud Episode 388)
• How to write SMART goals (with examples)
• Jim Collins – Articles – BHAG
• What is BHAG? Creating a Big Hairy Audacious Goal | Adobe Workfront
• How Can Leaders Overcome the Blurry Vision Bias? Identifying an Antidote to the Paradox of Vision Communication | Academy of Management Journal
• Digital Gatekeepers and the Death of Organic Traffic (Thinks Out Loud Episode 247)
• How to Compete With Amazon (and Expedia and Google and…) (Thinks Out Loud Episode 221)
• What do you hope to achieve? How do you plan to get there?

You might also enjoy this webinar I recently participated in with Miles Partnership that looked at "The Power of Generative AI and ChatGPT: What It Means for Tourism & Hospitality" here:

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Recorded using a Shure SM7B Vocal Dynamic Microphone and a Focusrite Scarlett 4i4 (3rd Gen) USB Audio Interface into Logic Pro X for the Mac.

Running time: 22m 39s

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Transcript: Strategy Session: How to Set Goals for Your Business

Well, hello again everybody and welcome back to Thinks Out Loud, your source for all the digital expertise your business needs. My name is Tim Peter. This is episode 389 of The Big Show. And thank you so much for tuning in.

I very much appreciate it. I think we’ve got a really cool show for you today. I wanted to follow up on the discussion from last week. Where we talked about doing a health check for your business and understanding your current state, right? You’re beginning to get ready to, you’re beginning to get ready.

Boy, there’s a lot of setup there. You’re starting to plan your strategy for next year, right? That’s the setup for this. We’re thinking about our strategy and. The reason we’re doing a health check, the reason we did a health check last week, in last week’s episode, is because we’re trying to understand where is the business right now.

And once you have a sense of where the business is, one of the next things you want to do is say, where do we want to go? What is the future state? Even better, what is the ideal future state? Now, if you’ve set goals before, you’re very familiar with this process of saying these are going to be specific, measurable, achievable, relevant, time bound, right?

Smart goals. You’ve heard of these before. I doubt I’m the first person to ever tell you about those. And I think you should use smart goals. But I want to start more broadly than just SMART goals. We’ll get to that, I promise you. I want you first, though, to think… Big I want you to think in terms of not just what are things going to look like a year from now I want you to think in terms of the ideal state the optimal state What would things look like next year if everything we could possibly want went well?

Because when people talk about smart goals and when people talk about for their objectives for next year sometimes there’s a tendency to you A, not be as specific as you might think. And B, not be as relevant as you might think. And when I say relevant, I don’t mean relevant to the business. I’m sure there are, I’m sure that all of the goals you’re looking at are going to be relevant to your business.

But there’s a word I like a lot that talks about meaningful. Right? How meaningful is this to the business? How big a difference is this going to make for your business and for your team? Because what you want to do is create a really clear picture of where you want to end up. And a clear picture in a way that people can understand that it matters.

So before you start thinking about your objectives, before you start thinking about your goals, you want I want you to take a big step back and ask yourself a really important question. What do you want? No, really, what do you want? Take a minute or two and look at what success truly looks like for your business, and frankly for you as a person.

This isn’t just some touchy feely, reach for the stars, motivational speaker thing. This is backed by research. Uh, Carton and Lucas wrote a paper in the Academy of Management journal that showed the team’s struggle. Often, with what they call the blurry vision bias, people don’t have that clear a picture of what they’re going for, and because of that, they have a really hard time achieving it.

Nobody knows what success really looks like. We see this all the time where businesses lay out a vision, and the vision sounds good on paper. Right? We’re going to be a leading company in our industry. We’re going to be, you know, among the best players in the world. But what does that really mean? You know, when you think about something like Amazon, they said we’re going to be Earth’s most customer centric company to build a place where key people can come to find and discover anything they might want to buy online.

Well, that’s actually pretty clear. We want people to be able to come and find anything they want to buy. And we’re going to do it in a very customer centric way. That’s very simple for people to get their, their head around. People to get their mind around and say, Okay, what do I need to do to help achieve that?

If you tell your team your vision where you want to, you want more or better or someday, they’re going to struggle to achieve that. Really, ask ten people what better looks like. In your organization, and you’ll probably get 11 different answers. So you want to really think about how do we go for something truly meaningful?

How do we go for something very, very clear? And that’s going to make it much easier for you to break it down into smaller, more actionable goals. Like, you know, let’s say you’re a 10 million dollar company and you generate 25% of that from your website each year. Well, getting an extra 25 or 30 grand isn’t really that hard.

It’s also not terribly inspiring, it’s just not that difficult to do. But if you say we’re going to drive an extra 250, 000 through our website at a 35% profit margin within the next 90 days. That’s easy for your team to envision, neither you nor your team will be confused about what you’re trying to accomplish.

You’ll have to really put on your thinking hats and say, well, how do we achieve that? But that’s an entirely different problem. It’s not a blurry vision problem. So start by closing your eyes. I mean this sincerely, close your eyes. And picture as specifically as you can, what success looks like for you a year from now, three years from now, five years from now.

What does your work day look like? What does your office look like? What does your team look like? How much revenue are you producing? Can you picture ten times? The revenue you’re doing today. You don’t have to do it in a year or even two to three years. You know, there’s lots of different ways to think about this.

Good to great calls this way of thinking big, hairy, audacious goals. That Amazon example I gave you a moment ago is one. Those are usually things that take five or ten or twenty years. But if you think it’s hard to get your head around, take a look back. Are you making ten times what you once did? I bet you are.

How long ago was that? Why can’t you do it again? It’s okay if you can’t see it yet. But the point here isn’t to blur your vision. You’re trying to make it clear. Where do we want to be? Do you want to be ten times larger? Do you want to be fifty times larger? In ten years or twenty years. That’s fine. Make it clear in your mind where you’re trying to go and then you can work backwards for what are we going to do over the next five years, what are we going to do over the next three years, what are we going to do over the next year, not in terms of actions or tactics, but in terms of goals, because if we know we want to be somewhere five years down the road.

It makes it much clearer what we should be doing today to start to get there. So think about the revenue you’re producing. Think about what profits look like. Think about what your cash flow looks like. Then you can work backwards and say, Okay, what do we want to do in the next year? How far towards that path do we, down that path, do we want to get?

And think in terms of when you want what you want. Is it in five years? Is it in three years? What do you want to do in a year? What do you want to do in nine months? In six months? In a quarter? Don’t hesitate to be aggressive with some of your goals. I know I’ve said this a couple of times already. Yes, the big hairy audacious goals could be much longer term.

You also want to make progress right away where you can. You’re not going to be 10x in a year unless you’re a very, very small business. Or unless you’ve been doing something, you know, very wrong. Or you have some, you know, really sophisticated way to get there. You know, you’re going to acquire a much larger competitor or something along those lines.

You also want to have a bias for action to accomplish things as soon as possible. We see this all the time where quick wins beget quick wins and beget energy that people want to give into the organization to help you where you want to go. And to use the motivational speaker line for a moment, shoot for the moon.

Even if you miss, you’ll end up among the stars, right? You’ve all heard that before. More practically, would you rather aim for three years when something you want to do might only have taken one? Would you rather aim for nine months and reach your objective than have it take a year? Which one do you think leads to greater success?

You want to do the same exercise. In terms of your customers, you’ve probably heard of the ideal customer profile before. Think about how do you get more customers like your ideal customer. Do you have a best customer today? Do you have customers who match perfectly with what it is you’re trying to do?

Who are the perfect example in terms of, of where it is you want to be or who you want to be working with? Are they the right size? Do they have the right budget? Do they have the right problem that you solve? Do they have specific pain points you help them with? Do they make decisions in the way that you want them to?

Do they have the right maturity level? Are they a good fit for your business? And are there more like them? What other, what other customers can you think of that are like those? Because as you think about your goals, one of your goals should be how do we get more customers like our best customer? How do we get customers who help us get to, to where we want to go?

I see lots of businesses lots of times chasing customers who aren’t really a good fit. They cost too much to service, or they don’t really have a need for the, for the product or service that you’re offering. And then, you know, you struggle to sign those customers to a deal, or you struggle to sell to those customers if you’re in a B2C business.

The point here is to be very clear on who it is you’re trying to serve, and why it is they’re a good fit for your business. Take some time to articulate. And write down what you want. You want to be very, very clear about this. Because it’s going to help your employees. It’s going to help your team understand where you’re trying to go.

And help them solve for how to get there. Now, this is where you can start to think about your SMART goals. This is where you can start to think about being specific and measurable and achievable and relevant and time bound, right? Specific, well, I think this should be abundantly clear. That’s what I’ve been talking about this entire time, right?

For the last, oh, I don’t know, 12 or 13 minutes. In terms of measurable, If you’re seeing a big uplift in terms of revenues or profits, then measuring them becomes easy. If you’re trying to say, well, we want a 3% increase, it, sure, that’s measurable, but it’s tough to measure and it’s expensive to measure because it’s You may not see it on a day to day basis.

If you’re saying, oh, we want to be 20% bigger or 30% bigger, that becomes much easier to spot, becomes much more simple for you to identify if what you’re doing is working. Now, achievable, we’re going to come back to in a moment. Notice I’ve been talking big, hairy, audacious goals. I’ve been talking about clear vision and, you know, setting stretch goals and the like.

And I haven’t really talked about achievable much. There’s a reason for that. I’m going to come right back to it. In terms of relevance, this is what I mean by meaningful. Does what you’re doing matter? If you were to drive your business to a 3% increase year on year, that’s fine. But do you really care? Is it going to change anything in your world much?

Probably not. Oh, but if we say we’re going to reach for 20% increase or a 30% increase or a 40% increase in at least some areas of the business, that’s probably meaningful. You’ll probably see the effects of that. In terms of time bound, I’ve talked about this, have a bias for action, have goals that require some result within a meaningful period.

Where are you going to be in 90 days? How do you know you’re on the right path? What’s your, what are your goals for six months? How do you know that you’re on the right path? So you want to make sure that becomes very simple. To, to know that we’re actually making progress. Now, once you figure out specific, measurable, relevant, time bound, and, uh, excuse me, specific, measurable, relevant, and time bound, now let’s talk about achievable.

This is when you want to start thinking about this. The point isn’t… To skimp on these goals to make sure you achieve them. It’s also not to grind your team into dust with things that can’t be achieved. It is to stretch your team and force you and your team to think. How will we do this? What would it take to accomplish this?

By the way, I’ve talked about your team here. You don’t have to answer this question on your own. You want to include your team in this discussion. One of the reasons you want to be clear in all of the other elements is that you’ll help them see what it is you’re trying to achieve. I can tell you a real world scenario where this occurred.

I had a huge problem back in 2009. The company I worked for was in deep, deep caca, right? Like things were really bad, right? The economy was cratering and there’s nothing quite like the fear of failure, the thought of failure to focus your mind. I want to be very clear with you. I didn’t rescue the business.

I was working in my team. Did I brought them into the into the discussion? I let them know that we were in real trouble. I made it clear how much runway we had available to us. How soon we might run out of cash, how, how much risk there was. To all of our jobs and to all of our customers, if we didn’t figure out a solution and the team came up with a ton of ideas to reduce costs and drive revenues, they were brilliant in terms of innovating and thinking broadly about, wow, we’ve got this real problem.

How do we solve for this? So it’s even better when you do this on the front side before it’s how do we keep ourselves from going out of the frying pan and into the fire? Rather, how do we achieve these, these goals that we want to achieve? How do we achieve this growth that we’re looking for? Because there’s a clear vision of where we’re trying to get to.

So where are you starting from? People can understand that. Who can help you achieve this? I’m a big believer in think who, not how. Who can you get to help you achieve what it is you’re going to achieve? They can start thinking about the things that might get in the way. And that will lead to the approach that you’ll take to ensure that you accomplish everything you want.

And that’s what a strategy really is. It’s making sure that all of the things that you’re doing are leading you towards your goals. And they can’t lead towards your goals if you’re not very clear on what those goals are. Ultimately, that’s why that matters. The roadmap of how you get where you want only works if you’ve got an end destination in mind.

So take some time to think about that end destination. Take some time to think about a really compelling vision of where you want your business to be, where you want to be personally. And then enlist your team in helping you create that roadmap. Once they know where they’re trying to go, they’re really smart.

They’re going to help you get there. And I can’t wait to see where all of you go. Together.

Show Wrap-Up and Credits

Now, looking at the clock on the wall, we are out of time for this week. As always, I want to remind you that you can find the show notes for today’s episode, as well as an archive of all past episodes, by going to timpeter.com/podcasts. Again, that’s timpeter.com/podcasts. Just look for episode 389.

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Show Outro

Finally, I do want to say, thank you so much for tuning in. I know I say this pretty much every week, but I say it pretty much every week because it’s so important to me that you hear this. I would not do this show without you. Your support, your listenership, your comments, your conversation, the community you are helping us build here means the world to me.

So, please keep the tweets coming, keep the messages coming on LinkedIn, keep the emails coming. I love getting a chance to chat with you and hear what’s on your mind, and learn from you about how we can make this a better community.

So with all that said, I hope you have a fantastic rest of the week. I hope you have a wonderful weekend. And I will look forward to speaking with you here on Thinks Out Loud next time, until then, please be well, be safe, and as always, take care, everybody.