Every New Year most of us make promises to ourselves which often include dieting, working out more, and quitting bad habits. Business leaders often reflect on the past 12 months and start thinking about creating business growth goals, tracking those goals, and measuring progress. Setting goals is a common undertaking, but unfortunately it can be useless, unless you understand "action steps." When recruiting for a company, I usually ask two questions: "What are your goals for this position? "What are the actions you are going to take to achieve your goals?" Most of my clients can easily answer the goals they want to achieve, yet many have trouble articulating the action steps necessary for achieving said goals.
Setting a goal for your business can be valuable -- but usually isn't. More importantly, perhaps we should think in terms of strengths and weaknesses and define what action steps we need to take to achieve our goal.
Hypothetically, your business goal is to increase profits up to $20 million next year. Great. But what does that mean to you and your team? The goal by itself is useless. Goal setting only works in combination of action and asking: "What do we need to do to sell $20 million of product and/or services?" Your sales and marketing teams should brainstorm the action steps that would help them achieve the new goals, asking themselves questions such as:
Your actions should be measurable or verifiable. At the end of each month you'll ask your staff if they did, in fact, follow up within 30 days of each potential sale, or whatever the action step was. If performance is not on track to meet the goal, either the action steps are not being taken or they are not sufficient to ensure achievement of the goal. Either way, an adjustment needs to take place.
The value of the goal is not the goal itself, but the determination of the action steps most likely to lead to achieving the goal. Some goals are not achievable. It can be disheartening to set a goal that does not get realized. Also, by chasing unattainable goals, your company wastes time and money, which often leads to lower profits and poor morale.
After your team members have determined an action plan that will most likely achieve the desired goal(s), you should plan on re-evaluating every couple of months to ensure you're on track. Here are some action steps for setting goals for your company.
It's all well and good to have a long view of your company, but measuring success needs to be managed on a monthly basis, as well as reviewed and analyzed quarterly. Also look beyond your walls and understand your business from a competitive, business vertical, or economic perspective.
Make sure that you've communicated your action steps so that everyone understands what the goals are and what they are working toward. When your team realizes what you are trying to accomplish, it provides the rationale for decisions you might make regarding hiring, acquisitions, incentives, sales programs, or any other monetary decisions.
When your action steps have been defined, you can develop a deeper understanding of the effects of tactical decisions and how they play against your goals. Business leaders should have a budget that considers revenue to expenses, providing your team with a better understanding of major acquisitions or the costs associated with winning a new client.
When you put a plan into action for your business against achievable goals, sometimes you need to change course. Remember you're managing tactically month to month and reviewing quarterly, while still planning for future growth.
It is incredibly important to realize that setting business goals will not guarantee success for any business. However, setting up action steps to achieve your goals can sometimes get you closer to corporate growth. Taking the time to look at your organization from tactical and broader perspectives will give you confidence in what lies ahead and how your organization will be able to optimize.
Erika Weinstein is CEO and founder of eTeam Executive Search.
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"Goals for 2014" image via Shutterstock.
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