Goal Planning
Goals can be a powerful tool for companies of any size
Happy Thursday,
August tends to be a time when teams reflect on annual progress since we still have several months left to reach annual goals. Within the next few months most companies also start mapping out goals for the coming year, making it a good time for us to have a goal oriented conversation.
What is a goal?
Companies big and small describe goals as achievement over a set period of time, ranging from monthly to annual goals. Part of our investment due diligence includes asking about company goals and the process involved with deciding those goals, as these responses offer greater insight into team dynamics.
Regardless of team size, we find three common aspects of goals include:
Measurable – goals should be measurable to be meaningful. If a company targets $12 million of annual revenue it’s clear when the goal is achieved, and averaging $1 million per month signals the team is on track.
Defining a Purpose – goals allow teams to maintain a constant point of reference to anchor discussions when distractions or challenges occur. Reducing larger goals into individual components also allows employees to understand how their specific contributions relate to broader company purpose and achievements.
Mix of Long and Short Term – large lofty goals are helpful for setting strategic direction but short term goals are essential to celebrate incremental achievements and maintain team moral.
Asking About Goals
We often ask companies to explain the reason behind a goal or what the desired outcome is for achieving the goal. Often times we find companies set goals but struggle to explain the basics of why they want to achieve those goals.
Consider a company targeting $10 million of annual revenue. It is a reasonable goal for a new venture, but it helps if the team also understands what the goal represents in terms of overall strategy. Maybe the $10 million of revenue will allow the company to hire more engineers, which accelerates product development for a new lifesaving medical device. Understanding the deeper reasons for pursuing a goal makes it more meaningful than just a dollar amount and helps convey the overall strategy to everyone involved with the company.
Measuring Progress
Marathon runners tend to hit what is called a wall around mile 20-21 or about two thirds through the race. Realizing there are only a few miles left helps runners maintain motivation to finish the race. If goals are not measured and the team not provided periodic updates, motivation may start to decline as nobody knows how much progress has been made or how close they are to finishing. If the team hits the “wall”, without knowing there are only a few miles left, it becomes much more difficult to maintain team motivation.
A few years ago we worked with a company which set annual goals but did not update employees on progress toward the goals, so nobody knew if they were only a few miles from achievement. We worked with the company to implement a tracking and reporting process, so each month an email went out to all employees providing updates on goal status. Individual team managers also held monthly meeting to discuss each update, allowing teams to review progress and uncover areas of potential challenges early enough to make adjustments or maintain motivation to finish the last few miles of a goal.
Updates
One goal we strive toward is helping companies big and small understand how to position the company for investor discussions. A while ago we talked about building a presentation slide deck and are working on an update focused on the initial overview or pitch deck. We realize founders are excited about their companies and want to tell every detail of the story, but most investors only spend 2-3 minutes reading a presentation. More on this in the coming weeks.
Thanks for reading and hope everyone has a great weekend.
- The Caymont Team