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18 Tips For Setting Better Business Goals
Use these 18 business goal-setting tips to increase the likelihood of realizing your strategic goals.
Strategic goals represent critical or important achievements in your organizational strategy. They’re objectives to be achieved over the next three to five years, which link out to your measures and initiatives. Here are a few examples:
- Balance the budget: A balanced budget reflects discipline in planning, budgeting, and management. It is typically seen in the public sector, or within divisions or departments of the private sector.
- Increase share of market: This customer strategy focuses on selling to more customers, thus increasing the market share. For example, a landscape company may want to reach more households; a hospital may want to serve a greater portion of the local population.
- Grow percentage of sales from new products: This objective focuses on the sales outcome your organization is hoping to achieve. It emphasizes constant innovation, even on your most successful products.
- Create a performance-focused culture: This objective can be used if your organization wants to change its culture to one that focuses more on performance management or incentives. This objective shows up a lot in government and nonprofit organizations.
These goals will identify what you’re working toward as an organization. The business goal-setting process includes three phases: Pre-work before goal setting, goal setting itself, and ongoing management after setting goals. The 18 business goal-setting tips below are divided by stage, to help you take this process step-by-step.
18 Principles To Follow For Business Goal Setting
Before The Business Goal-Setting Exercise
- Complete a SWOT analysis. SWOT is a high-level strategic planning model that will help you identify where your organization can improve and where it’s doing well. It’s an acronym for “Strengths, Weaknesses, Opportunities, and Threats.” This detailed SWOT analysis template provides the details of how to conduct the analysis. Doing the analysis first will help you think through your strategic challenges and opportunities before trying to set targets.
- Run internal and competitive benchmarking. These exercises will help you compare performance in various areas across your organization, and across your competitors’ or peers’ organizations. This information will be helpful during the business goal-setting process by showcasing where you are strong or weak.
- Do a market analysis. Where do you see your industry headed? What is trending for organizations in your space? A thorough market analysis will help you answer these questions.
- Review your past performance. Without knowing where you’ve come from, it’s hard to decide where you should be heading. Past performance can help inform a number of your future business goals.
- Solicit input from employees. Gaining insight from employees is a smart strategy, as it will give your leadership team insight from those on the “ground floor” of the organization. But if you do ask for input, be open to actually using it—otherwise, employees will be less likely to offer up their opinions in the future.
- Determine who will participate in the goal-setting exercise. Determining who should be a part of this conversation is largely based on the size of your organization. Will you involve mid-level managers, or just senior leadership? What about your board of directors?
- Give all participants some pre-reading homework so they can come prepared. You want everyone in the room to be on the same page and ready to go once the meeting begins.
During The Business Goal-Setting Exercise
- Be sure every goal ties back to your mission and your vision. It ensures each goal is oriented on where your organization is headed in the long-term, not just something you’re thinking about in the moment.
- Make your goals descriptive. The more specific and descriptive you can be, the more likely it is that everyone understands each goal in the same way. For example, a goal like “obtain at least six new corporate accounts per quarter” is more transparent and easily understood than “grow our customer base.”
- Be certain your goals are realistic. Are all of your goals achievable? Are there some that are simply not within the realm of possibility? It’s great to have stretch goals, but you should be able to reach them within a three- to five-year time period.
- Make sure your goals are appropriately sized. If you have any goals that are too large or too long, break down the goals into multiple steps and apply target dates for each component.
- Consider whether your goals are measurable. You won’t be creating measures that coincide with your goals just yet (we’ll discuss that a bit later), but be certain your goals can be tracked, measured, and analyzed in some way.
- Consider what actions you’ll take to achieve these goals. Sometimes, avoiding contradictions across your goals is easier said than done. For example, one goal might be to have 100% customer satisfaction while another might be to maximize profit. These two things may be incongruent, so one may have to give a bit in order to be realistic.
- Examine who will be responsible for each of your goals. Who will ensure everyone stays on track? Who will ensure that reporting on progress takes place each month or each quarter? Consider the roles and responsibilities required to assure continuous advancement.
- Identify the resources you’ll need to achieve these goals. For example, if one of your goals is to develop and use a customer relationship management (CRM) system, do you have the funds appropriated for it? Budgetary limitations should also be considered during the goal-setting process.
After The Business Goal-Setting Exercise
- Meet regularly to check in on your progress. This ensures everyone involved stays on-task no matter how much time goes by. Keep in mind that some adjustments may be required as your team starts to pursue these goals. Don’t be afraid to adjust as needed!
- Communicate your goals internally (and possibly externally). Does everyone in your organization understand the goals and why you selected them? The entire company is involved in reaching them, so every department and every individual should understand how their performance impacts the goals—and therefore, the overall success of the company.
- Make sure you have good data for the related measures. Once your goals have been set, select measures (also known as key performance indicators) that will help you monitor performance toward each goal. Ensuring you have data that informs each measure is imperative.
Don’t forget to reward your organization as you hit your goals!
The process of business goal setting can be challenging, but actually realizing a business goal is even more so! So when your organization achieves a goal, take time to acknowledge it. Knowing that the ‘wins’ are celebrated, not overlooked, will bring renewed motivation to everyone involved. Good luck setting—and reaching—your goals!