Follow these 5 steps to set effective goals with your team this year and achieve the outcomes you want to see.
Are you looking ahead in 2022 and wondering how to go about setting the best goals that you can for your organization this year? If not, you should be.
Goal setting is deeply tied to productivity. One Harvard Business School study that surveyed MBA students found that 84% of respondents had no specific goals at all. Some — 13% — had goals but didn’t commit them to paper, and just 3% had clear, written goals with plans to accomplish them.
The results? Ten years later the 13% of the class that had set written goals but not created plans were earning twice as much money as the 84% who had set no goals at all. However, that top 3% who had written goals and a plan were making 10 times as much as the other 97% of the class.
Ten times as much! That’s a serious chunk of change. Imagine what you can do if you take the same principles and apply them to your business.
If this is your first foray into more formalized goal setting or you’re just looking for some new ideas, here’s a crash course in goal setting with information from our in-house experts.
Start with a SWOT analysis and a benchmarking exercise
Before you set any goals, you’ll want teams and departments to do an analysis that outlines strengths, weaknesses, opportunities, and threats (SWOT).
The whole point of goals is to improve or achieve, right? Well, how can you improve if you don’t know where your weaknesses are?
Before you set any goals, you’ll want teams and departments to do an analysis that outlines strengths, weaknesses, opportunities, and threats (SWOT). Even if you’ve done something like this in the past, companies and teams grow and change. It’s a good idea to do these kinds of analyses frequently.
Next, you’ll want to do some benchmarking work. This involves researching similar companies, competitors, and the like. The point is to understand where your company stands in terms of variables like income, expenses, and the like. This way you can use industry averages to set realistic goals.
The cardinal sin of goal setting is selecting unrealistic goals. It’s always good to push your teams, but if they’re never able to accomplish what they set out to achieve, morale will start to plummet.
Create cascading goals and send them with employees over break
Cascading goals consist of company-centered objectives that are rolled out from the executive suite down through the rest of the organization. It’s the flow from the top down that helps inform the goals of each department, team, and individual. The key is ensuring alignment with managers’ and employees’ goals to achieve “we’re all in this together” sense even though the process is a hierarchical one.
There are a number of different forms of cascading goal setting models. Here are a few examples:
- Visions, Values, Methods, Obstacles, and Measurement (V2MOMs)
- Objectives and Key Results (OKRs)
- Big Hairy Audacious Goals (BHAGs)
Whatever the method, each comes with its own criteria that’s perfect for adoption by small and medium-sized businesses.
Make sure your goals are S.M.A.R.T.
An oldie, but a goodie. S.M.A.R.T. stands for specific, measurable, actionable, relevant, and timely. Every goal you set should meet all of these parameters. If it does, it’s considered to be a well constructed and considered goal because the S.M.A.R.T. method is designed to make goals as clear and unambiguous as possible.
S.M.A.R.T. stands for specific, measurable, actionable, relevant, and timely. Every goal you set should meet all of these parameters.
Use a one-word goal for your overarching plan
The book “One Word That Will Change Your Life” outlines how effective setting a one-word goal can be. Of course, the cascading goal method and others like it involve much more than one word, but the good thing is that they can all work together.
The idea is that complicated strategies can be abandoned when they become overwhelming, but it’s hard to be overwhelmed by one word. While this strategy is generally employed on the individual level, there’s nothing stopping you from bringing it into your small business. When you select a goal word for the year like “diligence” or “tenacious”, it provides a clear, memorable, and simple guidepost for the year’s work.
This isn’t to say that the one-word goal should be a substitute for any other, more complex goal setting activities. The one word you chose should be like an umbrella that all of your company’s other goals ultimately ladder up to. It’s just that, as teams and individuals make decisions throughout the year, it’s easy to answer questions like “does this align with tenacity?” and proceed accordingly.
Format some goals as ranges
This strategy works best with quantitative goals. Let’s say, for example, that you want to grow your company’ revenue by 30% next year. Rather than having just 30% be the goal, consider making the goal be growing your business’s revenue by 25% to 35% next year.
The idea is to make the goal a range where it’s still a goal, but one side of it is more achievable and the other is more of a reach. That way teams don’t get discouraged by not quite reaching 30% — 29% is still pretty good! Nor do they relax once the goal has been met or is in clear sight because there’s still another 5% to achieve in the goal range.
Naturally, the range format doesn’t work with every goal. But for those that it does work for, it can help boost morale while also keeping teams going beyond what they might have otherwise pushed themselves to achieve.
Ultimately, the key is to make your goals company specific. There is a clear benefit to look at other companies for inspiration and benchmarking. But just because something works for a similar company doesn’t mean it will work for yours. There are no purely good or bad goals — they’re simply a way to get your teams to the outcomes you want to see in 2022 and beyond.