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Setting Company Goals? Start by Considering These 4 Areas of the Business.

Which four areas should you concentrate on?

15Jun

Late last year, research by Deloitte showed a strong link between goal-setting practices and business performance:

  • Companies that used quarterly goal setting were 3.5 times more likely to be in the top quartile of business outcomes.
  • Companies where employees could easily set clear goals were 4 times more likely to be in that top quartile.

Unfortunately, the typical company today still sets annual goals, not quarterly. And the typical CEO still lacks a system for capturing goals across the company.

Some companies offer a simple system for changing that. But picking the right goals for your company, in your specific situation? That’s not so simple.

Even when you're committed to quarterly goal setting, the moment where you sit down to start—whether it’s in front of a blank page, a blank Excel sheet, or a blank set of goal fields in Khorus—can be intimidating.

When I face this task myself, I begin by looking at four fundamental areas of the business. Inspired by the Bell Mason framework, these four areas give me focus as I consider how my longer-term objectives for the company should be broken down in the near term.

1. Resources

Every company needs resources to operate, the two main types being capital and people.

Quarterly financial goals are a natural starting point. (Just don’t let it also be the end point, as it is for a lot of firms.) Based on your annual financial goals, what needs to happen this quarter? Maybe it’s a certain level of revenue or profitability; maybe it’s a dollar number you hope to raise from investors. Early-stage companies tend to focus on raising money or limiting burn, mature companies on profits, and companies in between on growth.

Sample goal: “Earn $10 million in revenue” in the next quarter.

The other major resource a company needs is people. These goals can involve making key hires, opening new offices or departments, or anything associated with making people productive.

Sample goal: “Improve employee engagement” next quarter, as measured by something like Gallup’s Q12 engagement survey.

2. Products

The second area I think about as I set goals is the product (or service) we offer. Corporate-level goals here might revolve around launching a new product or service, or completing a major release.

Sample goal: “Launch XYZ product,” with a success measurement of ending Q3 with 5,000 active users.

3. Process

“Process” is the next area I consider. This covers improvements in operations anywhere in the business.

Unless there’s a large, corporate-level operational change in place, I usually handle this area by setting a blanket goal: “Continuously improve operational excellence.” I then encourage every department to create their own supporting goals in that category—such as aligning sales and marketing around a new process, refining customer feedback mechanisms, or upgrading the technology used by a team.

This allows everyone to set near-term goals for process improvement, even if they aren’t directly involved in building or selling the product. Every department is important, and making sure that each department has appropriate operational goals is critical to building a high-performing company.

4. Markets

All companies exist in a marketplace and compete for the customer’s attention, either directly or indirectly. When setting company objectives, it’s critical to consider how you reach those customers. Goals in this area may include expanding to new regions, aligning with potential partners, selling through additional channels, or completing major marketing initiatives.

Sample goal: “Drive industry thought leadership” or "Secure 2 new channel partners."

___

I hope these four areas give you a strong foothold as you create goals for next quarter. Think of it as a suggested starting point, not a rigid framework. Just remember that when you make something a corporate goal, you’re telling people, “Here is what I value.” These will be the entire organization's guideposts for the next three months, so choose wisely.

Best of luck and, as always, let us know if we can be of assistance in your goal-setting process.

Sources

Khorus Blog

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