Your Quintessential Guide to Strategic Business Goals
The fact that you have made it this far shows you spend more time on strategic business goals than the average managing director. So many spend just a few minutes picking a number out of thin air and then charge on with sales and marketing work. This is wrong for so many reasons which I will come to in this business resource.
Why Your Company Needs Strategic Business Goals?
Strategic business goals, when done right, focuses you, and your team, on exactly where you are going. When you are focused on exactly where you are going you can then channel valuable resources (time, money, effort) all in that direction, and avoid wasting resources on other things not needed.
When you have the right goals in place they engage all your team members. Rather than just you thinking about how you will achieve goals, it encourages all your team to think about this and find creative solutions. This can save you money and make life easier because some of your team will find easier and low-cost ways to achieve your business goals.
Where do Your Strategic Business Goals Come From?
It is absolutely crucial that your strategic business goals come from the right place otherwise you will get the establish the wrong goals and take off in the wrong direction. The first step to achieving this is by asking, “who are your stakeholders?”.
Your stakeholders are those your business is there to serve. This is more than merely your customers. This is everyone who is paying you money. This may include shareholders, investors, government (grants) and those who give their time in kind, such as employees working beyond their paid hours.
Once you know who your stakeholders are you need to get under the surface and find their true needs. What is it they really want from your company? You need to go deeper than simple answers such as quality, money or time, and understand exactly what they mean.
How to Write Strategic Business Goals
In some cases the stakeholder needs identified may be in personal terms, such as the shareholder who wants to clear their mortgage or buy a sports car. For these, as for all stakeholder needs, you must translate these into business outcomes and language.
All your strategic business goals must be written in words that describe your business in the future. They must describe the future of your company in tangible terms that all your team can relate to. They must be dated in stone and have an impartial inspector who will check to see they have been completed.
Some goals you set using this process may appear impossible and you might be tempted not to write them down. However, if you do write them down, and date them, as described above, your team will find creative ways to achieve them. Consider John F. Kennedy when he announced he would put a man on the moon within the decade. Everyone said it was impossible, but they did it.
Communicating Your Strategic Business Goals Effectively
Once you have your strategic business goals you must communicate them, effectively. Get all your team together, Zoom is fine, and walk them through your vision, stakeholders, their needs and your goals. Let them see the logic. Let them ask questions and get them on board with delivering these goals.
To bring it to life for them create a rich picture of your goals. Everything that you can see happening in the future as a picture. This might include your new Board of Directors, New facilities, new working processes, new countries, etc. Build it from clipart or get an artist/cartoonist to draw it for you.
As managing director, you should walk the floor every day and speak with your people, at all levels, on your goals. Look to see the change happening and offer help. Identify ‘islands of change’ where your future is already occurring and share with everyone. Make sure they can also see the change is happening and they are the ones to roll this out fully.
List of Strategic Business Goals
At this point, you might be thinking how can I short cut this and find a ready-made list of business goals that align with my stakeholder groups? My advice, this very rarely gives you the right goals for your company. It all too often focuses you on the wrong things that result in wasted time, money and effort, and you find you do not deliver your stakeholder needs.
Here are some examples where copying business goals does not work:
Increased market share
Consider increased market share as a goal to generate more revenue? What if your market is shrinking and what you need to be doing is diversifying into new markets? What if your shareholders want to sell, time might be better spent on increasing the lifetime value of customers rather than finding new ones?
I had one client who saw a goal around people applying on spec to join a company. It sounded great and he believed it would reflect how much his team loved working at his company. However, on closer inspection, his situation was completely different. The other company was talking about employees in a sector with a shortage of skilled workers, whereas he was talking about self-employed facilitators in a sector where there was an abundance.
It seems obvious, surely you would want to improve the quality of your product or service? Yes, but only if this is what your customers want. It is very easy to jump into this area and spend a fortune on R&D when maybe there is no need. Maybe your customers want better margins or maybe they want products or services from a company that is more environmentally responsible?
Take time and find out what your customers really want before you start your planning process. Spending this time up front will save you a lot more time in the long run and make sure your customers get what they really want.
The Biggest Mistakes in Setting Strategic Business Goals
Sadly, there are so many mistakes in setting strategic business goals. These are caused by people who don’t know any better, have got bad advice, or are trying to short cut the process. Taking any of these approaches will likely result in very little progress towards your goals and/or take you off in the wrong direction.
Everyone loves a number to aim for. Whilst numbers are great, and essential in business, they make for bad goals. Why, because they create unintended consequences, high-pressure environments, block creativity, create a blame culture and often result in the number not being achieved.
So often I hear of stories where a tech salesman has the best solution for a business. He promises it will solve all their problems, it will save them a fortune in wasted hours and has all the case studies to back it up. However, I hear just as many stories where the solution made little difference and was not aligned with stakeholder needs.
There is nothing wrong with inspirational language when it is connected to your vision. However, your vision needs to be backed up by goals that are real and deliverable. Your goals need to show your team the future in language that is tangible and personal to them. Inspirational language for your goals leaves your team puzzled.
Though copying others goals or a list of goals you find on Google is fast and easy, it rarely delivers what your stakeholders really want. Every business is different, how they operate, why they do things and what they do. Coying to short cut your process will cost you time and money on wasteful activities
Why Good Strategic Business Goals are Critical to the Full Planning Process?
Your strategic business goals are the first step and impacts on the rest of your strategic planning process. If this is wrong then it will impact on everything else. If you are using the planning backwards method, as we recommend, you must start from tangible goals. This supports the brain to picture the future and come up with creative ways of how you got there that make a real step-change.
When engaging your team, tangible goals that they understand and paint a picture of the company future greatly reduce the fears many have. If you are looking to make significant changes and accelerate your business there will be a level of fear in your people. Getting your goals written correctly and communicated correctly will greatly reduce this fear and support your people to move quickly to new ways of working.
Your strategic business goals, written in tangible terms, allow you to calculate the financial benefit of your future. For example, if your goal is to have a new territory operating in the future, you can identify the value drivers related to increased asset value, increased revenues and reduced costs in this model and work out what this will be worth. Much more accurate than looking at the typical 5% growth year on year as most do.
Throughout your goal setting process keep asking why? Why do your customers want better quality? Why do shareholders want £10M, rather than £9M or £11M? Why do investors want money on a certain date?
As you dig into these “why’s?” you will get to the stakeholders true needs and this will allow you to set the correct goals. Then everyone will know where you are going.