Creating Successful Business Goals for the New Year
What do New Year’s Resolutions and Annual Business Planning Have in Common?
The beginning of the year is a time when we like to pause and reflect on the previous twelve months and set goals for the future. However, many of us are also aware of how quickly those plans fall apart. Setting successful personal resolutions is, in part, a balancing act between the realistic and the ambitious.
Most organizations don’t make explicit New Year’s Resolutions. However, companies do think about their goals in a similar way when the time comes for them to do annual planning and set priorities for the coming year. And they, too, must balance achievable goals against challenging ones that can push the teams and organization to higher levels of performance.
When people set their new year’s resolutions they have a greater likelihood of success when they are few in number, specific in nature and dynamic in pursuit. In a business setting, the organizations that tend to be most successful choose a few, specific goals that they too treat as dynamic and flexible. As organizations create their priorities for the following year, particularly those relating to cultural priorities, they should apply these same principles to maximize their chances of success.
The elements of successful goal-setting.
Many of the factors we know drive successful personal resolutions are the same as those that drive successful business plans. Some of the recurring themes we hear include:
Choosing from a few key things.
The more resolutions people add to their list, the less likely they are to follow through on them. By contrast, those who limit their commitments are less overwhelmed, and subsequently more successful.
In his book Essentialism: The Disciplined Pursuit of Less, Greg McKeown presents multiple priorities as a zero-sum game: the more priorities you add, the more your time and attention is divided between them. If you want your goals to succeed, keep your attention focused to just a few. Maybe even just one.
Specificity is another crucial step in successful goal setting. Rather than saying “I want to be a better person,” someone should instead resolve to “express gratitude five times a day,” “be more considerate of others and interrupt less during conversations,” or “take on an additional unpleasant task or chore once a week.”
The more vague the goal, the harder it is to start. That uncertainty can delay progress indefinitely. Specificity gives a task a clear path forward.
Viewing goals as dynamic.
Finally, successful goal-setters recognize that not every goal is viable in the long term. They are comfortable re-examining their priorities and re-evaluating what makes sense as things change around them.
Those that are too rigid in their goals are likely to persist with a goal even when it no longer makes sense, or else to give up and not set a new one when their original goal proves unfeasible. Conversely, those that are too soft in their goal setting know they will likely achieve it, leaving much opportunity for greater success on the table. They are more concerned with being able to say ‘I did it’ than to push themselves to greater heights. Setting a healthy goal requires sound judgment in knowing when to forge ahead and when to set a new course.
Creating goals that are informed by the past and based on experience.
We don’t make our judgments in a vacuum. When we set personal goals, we base them on who we are and what we believe is important in our lives at that point in time. Businesses, when they’re setting their strategic goals and priorities, are also not doing so in a vacuum. They look at what they’ve tried in the past, and they’re using that body of knowledge to drive their priorities for the coming year. This experience is critical for setting achievable yet ambitious goals.
However, it’s important for companies to set internal expectations with regard to goal setting and accountability. A few years ago, I worked with a company that had a strict approach to goal setting. While they encouraged all employees to set goals, they also made it clear that if you set a goal for the year, you better achieve it. Those around you will support you and help is offered, but you are expected to meet the goal. They merged with another company whose attitude toward goal setting was that if you ‘shoot for the moon’ and get halfway there, that’s still OK, maybe even great. These two different approaches, while each valid in their own right, were not compatible with each other. This conflict led to some difficulties within the organization that had to be resolved for the merger to succeed.
The tension point between ambition and realism is going to be different for each organization. Knowing where you are as a company requires you to identify what’s pushing you (but still achievable), what’s asking too much (setting you up for failure), and what’s a slam dunk (something to put a check mark at the end of the year that says you did it). That can be as different for every company as it is for every individual. If a large international organization decides that they want to begin operation in their 75th country and they already operate in 74, that’s achievable. For someone who’s operated in the United States for the past 15 years, making their first entry in a new country is much more ambitious.
Understanding the why.
Finally, successful goals have to be united with a clear purpose. A surprising number of people in organizations struggle to understand how and why the goals were identified in the first place. From an employee perspective, when they hear goals such as “increase productivity” or “grow sales,” it can often feel like they’re simply being asked to work harder, or do more with less. They don’t have a clear understanding of why the organization decided to pursue the goal they did. Why expand into a certain geography? Why increase sales by 12% and not 8 or 20? Why decease costs by 6% and not 4 or 10?
If we think about this on a personal level, it might make sense that at the start of a new year we decide we should exercise more, a message likely reinforced by news programs, gym advertisements and conversations with others. But have I really considered why I should exercise more? If however I say “I don’t feel capable of handling the demands of work and travel as well as I have in the past, and I think that a thoughtful exercise program will increase my energy level and ability to work more effectively,” I have a chance. If I then take time to factor my work and travel schedule into the plan, I’ve not only identified a reason for my goal, I’ve also planned how I will achieve it. That makes my likelihood of success much higher.
Business goals don’t need to be set at the New Year.
Business plans are not New Year resolutions. Most businesses do conduct some type of annual planning activities. Regardless of when you do your planning, you’ll have more success if you follow the principles outlined above. Limit the number of goals you set. Be specific about what they are and how you will achieve them. Approach them with a dynamic mentality so that you can adapt to the business environment. Understand and communicate the purpose behind your goals, and use your experience with past goals to inform your goals for the future. And strive for that delicate balance between what is ambitious and what is realistic.