As a Business Mentor and Coach, I often meet business owners who struggle with setting and/ or achieving their Business Goals. The result – business owners start thinking that business goals just do not work for them or that they do not need to set business goals in the first place!
Today, let us talk about why we struggle with our business goals.
- Unrealistic Goals: Want to reach the X million mark? That is a great start to a Business Goal. We aim higher and get our teams to stretch themselves to achieve these ambitious goals.
But wait, do we have the budget, tools, people, skills, market, and even time to achieve these goals? For example, signing up a large, new corporate client may take months of preparing, following up, and documentation before you can start roping in the business. Have we factored in this when defining our targets for the initial months? We do not want to demotivate our teams at the beginning of the year with unrealistic expectations.
- Not Data-Driven: Quite often our goals are based on what we “think” we should be achieving and not on what we “know” we can achieve. The difference between “thinking” and “knowing” is Data. Data about, our customer base, our market segments, our product demand, our competitors’ strategies, our wins, our losses etc.
For example, we know that 50% of our customers give us high volumes but smaller profits, 30% of our customers give us lower volumes and lower profits (but pay us in advance) and 20% of our customers give us higher profits and lower volume. If our goal is to increase liquidity, we will need to focus on the 30% who pay us in advance, rather than the 20% who give us higher profits, but take months to complete the project and have long credit terms.
While past data will help in defining the right goals, current data helps in achieving these goals.
A big portion of the current data is the assumptions we make when we plan the execution of our goals. These are often not documented and hence we never know when we have met, missed, or surpassed our assumptions.
For example, in the above example, we assume that out of the 30% of customers who pay us in advance, we assume that,
1. Customer A will give us an ‘x’ amount of business this month.
2. Or Sales Channel B will generate ‘y” amount of business this month.
When we capture these assumptions (preferably in writing), we can always go back at the end of the month and verify if our assumptions about Customer A / Sales Channel B were correct or not. Did we underestimate them, or did we overestimate them? How does this impact our next month’s planning?
- Uncommunicated Goals: Let’s say we have finalized the perfect goals for our business, we now need to ensure that these goals are percolated to every division within the organization. And I do mean every division that may or may not be directly related to the goal.
For example, We have a goal to increase your customer service scores by 20% this year. This goal needs to be shared with not just the customer service teams, but also the sales, finance, logistics teams, etc. Every point where our customer interacts directly or indirectly with us will contribute towards the achievement of this goal.
Goals hence need to be shared across hierarchies, divisions, and individuals. It’s just not just conveying the goals, but also ensuring there is clarity on what each unit needs to do to contribute towards the achievement of the goals.
- People Challenges: The single biggest challenge faced by all organizations is related to “People”. Challenges vary from hiring the “right people”, retaining them, motivating them, skilling them, compensating them, rewarding them, guiding them, empowering them, supporting them…… Underperforming teams seldom meet organizational goals.
For example, if our goal is to increase production by ‘x” %, we need to ensure that our production team is primed to produce the delta. Do we need more people in the production department? How can we automate some of the repetitive work, to give our teams the time to complete important tasks? Do we need to train the production teams on new processes, systems, and equipment? Can we design a reward and recognition program for superlative performers? What do we do with team members who are not contributing despite all these? These are some questions that need to be answered when we communicate our goals with our teams.
- Monetary Limitations: Postponing our organizational goals because of monetary limitations is a common phenomenon. Each of our goals may need some investment.
For example, If our goal is to increase our customer base 2x times, we need to invest in marketing to generate more leads and in sales to close more leads. We may also need to invest in alliances & partnerships to increase our reach. All of these require additional funds that we may not have. What do we do then?
One way to address this is to identify your primary goals and free up funds to meet the primary goals first. Do everything to become more efficient, increase savings and route your funds to your primary goals. In the above example, this would mean routing funds for marketing and sales functions, rather than office infrastructure. Or explore partner programs rather than open offices in new geographies.
- Weak Link: In most organizations, there is one section that is underperforming or underutilized. This brings down the overall performance of the business.
For example, I find that most entrepreneurs do a fabulous job of building their products/services. The challenges develop in weak marketing, pricing, differentiation sales, or delivery of this offering. We all know of superior products or services, which are not yet been discovered by their customers. This could be because of weak link marketing.
The weak link can also be an underutilized strength. In the above example, the organization may have a strong differentiation from competitors, but this is not conveyed to potential customers before they buy. It may be visible only after the customer experiences the product/ service. In this case, the strong differentiation is not utilized to attract new customers, hence bringing down the overall performance of the business.
- Weak Planning: Great goals do not make a business successful. We also need great strategies and execution plans to meet those goals.
As a Business Mentor, I often hear teams say that they have no specific idea how they will achieve their goals. They do intend to work harder, work smarter, do more sales, and meet more customers. One can always do more of everything, but unfortunately, not all efforts will contribute towards achieving the goals.
Another common scenario is when teams feel they do not have the time to make plans. They are busy doing everything that is urgent and important at the same time. However, teams who invest a fraction of the activity time, in stepping back, planning their moves, and systematically implementing them, are definitely more successful.
Planning also includes a robust review system that continuously analysis the goals, the strategies designed to achieve those goals, and the tactics identified to actionate the strategies. There will always be a gap between intentions and results. This gap needs to be analysed to tweak the tactics, strategies, or sometimes even the goals to ensure we achieve the outcomes we envisioned for our organization.
- Independence of Goals: There is no single goal that will achieve the overall growth of the organization. We hence work on multiple goals at different levels of the organization. The missing piece is the interdependence of these goals on each other. Different goals are dependent or related to other goals. And if one of the goals is not achieved, it would impact other goals too.
For example, If the goal is to increase the profitability of a region by ‘x’ percentage, then we need to ensure our revenue goals are put into action along with other goals to manage expenses, hiring goals to hire the right talent at the right cost, Productivity goals to adopt technology (SAS) models, customer goals to onboard profitable customers, product goals to identify high-profit margin product/service offerings, etc. All these goals are interdependent and impact the overarching goal to increase the profitability of the region.
In conclusion, Business Goals are more than SMART declarations! Businesses also need to know how to achieve, monitor, and adapt these goals.
“The Victory Of Success Is Half Won, When One Gain The Habit Of Setting And Achieving Goals” – Og Mandino (“Quote by Og Mandino: “The victory of success is half won … – Goodreads”)
Neetu V Bansal is an international Business Coach, Mentor, and Author. She works with small and medium businesses, startups, and early-stage organizations helping them generate more leads, close more sales, and ultimately earn more revenues and profits. She is passionate about applying Customer Perspectives in business and propagates this framework to solve SMarketing challenges. An Alumni of Harvard Business School Online, she offers sound boarding, Group Coaching, and One-to-One Mentoring Programs to suit the different learning styles of business owners.She is currently coaching businesses across India, the Middle East, and the United States in their sales and marketing journeys.