Different Types of Goals Are Needed To Be Successful
What type of goals does your business set? We’ve found that many small businesses are good at setting result-based goals. These are goals that spell out the desired result. An example of a result-based goal is: “Increase our revenue by 20% this year.”
While result-based goals are needed, there are a few issues with only having these types of goals:
- Your team may not see the correlation between the result that the business needs and the activity that they personally need to take to create those results. For instance, if the goal is to increase revenue your service team may assume it’s up to the sales team to reach this goal. They may see their contributions of upselling or cross-selling as a minor, or even insignificant, part of the goal.
- Result goals may seem too big, unrealistic or even have little meaning. Your team may see the goal for a 20% increase and make assumptions that it’s not achievable. Especially if they are already feeling overworked, at capacity or even underpaid. It might seem bigger than what the goal really is, because they don’t always have the necessary context. For instance, increasing revenue can be the result of bringing in new customers, raising prices, cross-selling to current clients, entering new markets, new marketing campaigns, etc. When all the elements come together the goal may be much more achievable than if the team assumes that the entire increase will come from new sales.
- Your team may feel that they can’t control the results. A lot of little things may go into reaching a result-based goal. The barriers to achieving goals can be real or not so real but could range from: “I can’t control if a marketing campaign will work” to “I can’t control if more clients say yes.” "I can't control" excuses, whether real or not, can prevent teams from even trying to reach what they see as goals that are too big. It's important to collaborate with your team to understand what they can do to help get results.
A technique that works well is to take result goals and break them down into goals that spell out the activity that is needed to reach each result-based goal. When you focus on activity, it’s easy to show your team the correlation between their goal and the activity that they personally need to take. It also helps make the goal smaller, more achievable and within their control.
This week we challenge you to take one result-based goal and try to create activity goals around it. Do this by:
- Take each result-based goal and identify the leverage points. Leverage points are the points in your business process where your team can influence the outcome of the goals. For instance, with a 20% revenue increase your leverage points might include:
- Pricing Strategies
- Marketing Campaigns
- Closing Ratio
- For each leverage point, write down which processes within your business impacts this point. Some leverage points may only be one process, but others might be impacted by several processes. For instance, “Cross-Selling” might be tied into process at the point of purchase, but it could also be tied to sales processes, follow up calls, etc.
- For each position, identify what activity they personally need to do to reach the goal based on which processes are a part of their job responsibilities. For instance, with cross-selling an activity goal might be to make five follow up calls each week. This makes the goal seem more within a person’s control and easier to achieve. In order to create these goals, you will need to consult data or, at the very least, make assumptions that are tracked and adjusted based on what the data shows. Using the above goal of five follow up calls, you’d want to know how many calls it takes to make one sale and the average dollar amount per sale. If you don’t know them it’s okay to make assumptions, but then you need to track and adjust the activity goal as you find out what the data is saying.
Set regular times to communicate about goals. You should share progress as well as setbacks and adjust your strategy as necessary, always with the focus on the desired results the business needs.