The tradition of contemplating the past year and setting goals for the next is ancient. Four thousand years ago, early Babylonians took advantage of the dawning of a new year to rededicate themselves to their king and to please the gods by repaying debts. Ancient Romans paid homage to the god Janus, who looks both forward and backward through sacrifice and making pledges to do better in the future. Early Christians, such as John Wesley, the founder of Methodism, held worship services on New Year’s Eve. The services, still held today, focus on improving oneself in the coming year.
While the date of the New Year celebrations in many cultures varies, it provides a natural divide in the timeline of our lives for a new beginning. Wise business leaders leverage this opportunity when budgets roll over and new projects launch to take stock of earnings, employee performance, and company culture over the past year and set strategic goals for the upcoming year to guide efforts and achievement in the year to come.
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Why Set Goals?
Businesses operate best when employees at all levels are well-informed about the desired direction and outcome of day-to-day operations. Goals define the bigger picture of what leaders hope to accomplish and achieve by outlining concrete objectives. They impact businesses in the following ways:
- Indicate how and where resources such as employee time should be allocated
- Identify key areas where funding should be increased or decreased
- Highlight business priorities
- Motivate employees to focus on a strategic plan
The type of goals that your board elects to pursue is not as important as going through the process of defining, setting, and committing to achieving goals. In and of itself, the goal-setting process can be enlightening and will undoubtedly motivate leaders to work towards the needed change to achieve their strategic plan for the future.
Planning for the Process
Have you ever sat down to write goals for the next year and come up with either a blank piece of paper or a laundry list of tasks akin to climbing Mount Everest?
Setting the right kind of goals for your company begins with determining your starting point. Reviewing key performance indicators (KPI) over the past six months or the past year will reveal the company’s current direction, as well as areas that may be lagging. During your analysis of the past, it is essential to note company strengths and weaknesses. What is propelling you forward, and what is hindering your progress? Bolstering skills and performance in areas that are already strong will do little to move you closer to your goals unless you can make significant improvements where KPIs are low.
Armed with an in-depth understanding of your own organization, turn your attention outward and examine how you measure up against the competition. As much as your success is shaped by your improvement year over year, your business success will ultimately be determined by your ability to outperform competing companies. Are you truly equipped to compete in your target market? Can you offer customers something that nobody else can?
Consider the future direction of your sector of the economy. Change is constant in the economy, and recent years have proven that operations can change on a dime. If business interactions appear to be trending towards a new business model, are you prepared to make the necessary changes, or will you be left behind? Determine what skills or tools you need to acquire to keep pace. Will you need to partner with a Salt Lake City executive recruiting firm to hire an executive with unique knowledge, skills, or experience?
Setting the Right Goals
Business innovation is constant, and trends come and go. It can be easy to become side-tracked by groundbreaking ideas and practices that appear to be the wave of the future. While you should not ignore these types of trends, diverting company time and resources away from long-term goals in pursuit of fleeting ideas is folly. Keeping your company on track for the long-haul results from setting goals arising from and in support of your organization’s mission and vision for the future.
Realistic business goals all have several characteristics in common.
- Quantifiable – Ambiguous goals are challenging to achieve because it is difficult to track one’s progress. Progress that you can use data to measure helps maintain focus and interest in achieving goals. Stating goals specifically and tying data points or KPIs to their achievement makes them easier to understand, grasp, and reach.
- Manageable – Lofty goals sound great during the planning process. However, if progress is too slow for it to be visible or the timeline to achieve it is too long, employees will likely lose interest or grow fatigued. If your goals are substantial and may take seven or ten years to realize, consider ways to break them up into smaller steps that will lead you to the same destination.
- Achievable –If your company typically wins two new contracts every three months, it would be unwise to set a goal to sign ten contracts in the first three months of the year. Goals that appear unattainable from the start can be demoralizing. It is wise to set goals that require a stretch as long as that stretch is in reach. Avoid asking employees to reach the stars unless they are astronauts.
- Fundable – With the right funding behind them, many initiatives can be successful. However, the budget may not allow you to fund them all at once. Contemplate the monetary investment required to support employees and provide the necessary tools to make your goals happen.
- Congruent – Well-intentioned goals to improve business practices and outcomes can conflict with one another. For example, a goal to cut call center operating costs may conflict with a goal to reduce customer wait times. You may have to decide which goal brings you closer to achieving your company’s mission and vision.
Reviewing the Data
Evaluating the goals set for your company is a long-term process. Regularly checking key performance indicators will inform you of your progress and alert you to flaws in your planning. Making necessary adjustments along the way is part of the process and will help fine-tune your goal-setting process for future years. As you make progress, keep employees informed and celebrate milestones along the way. Integrating employees into the process keeps the goals at the front of their minds and gives them a stake in the outcome. Employees, managers, and executives all have a part to play in attaining company goals.