It’s That Time Of Year Again! Are Your Goals Aligned, Attainable And Funded Properly?
Setting SMART goals (specific, measurable, attainable, relevant and time-based) is straightforward. Giving all of our readers that advice would be a bit below the expectations, so instead, we’re digging a little deeper with the advice around goal setting.
Specifically, the 10 tips we included here are based on what we see most often missing from our business and revenue goal conversations with clients and prospects.
Data supports that business leaders are adept at setting goals. But are they the right goals? Are the goals based on data? Are they aligned with other aspects of the business?
We’ll attempt to give some guidance to help in these areas.
Tip #1 – Do The Math
It’s probably going to seem out of order to start with a tip around the math associated with goal setting, but it’s where we see most of the issues when clients share their goals with us. What I mean by that is most of the company goals we see are not based on any actual performance metrics.
That’s why our first tip is about making sure you can mathematically justify your revenue goals for 2019.
Here’s an example: If you want to go from a $40 million company in 2018 to a $50 million company in 2019, you’re going to need the lead flow, close rates, average revenue per new client, renewal rates and other key metrics to support that growth.
Wanting it isn’t enough.
The big takeaway from this tip is start with the metrics. What kind of growth can your company sustain given its current performance? Then look at the key metrics and understand what level of improvement is attainable and what level of revenue that new performance can produce.
If it is in fact an incremental $10 million in revenue, congratulations! But in almost every case, you’ll probably be surprised to see that it will be short.
Don’t panic. The next step is to evaluate what’s required to improve all of those metrics to the level you need to achieve that extra revenue, and then make sure you have the investment, programs, people and tracking in place to deliver. That’s how you’ll be ready to hit 2019 running.
Tip #2 – Build Goals Based On Last Year’s Performance
When it comes to goal setting, past performance is a very good indicator of future performance. If you’ve grown 5% for the past three years, it’s not likely you’ll grow 20% next year. It’s possible, but not likely.
Start 2019 planning based on the data and performance from 2018.
Here is an example: If your six-person sales team did $5 million in revenue last year, don’t expect that same team to do $10 million this year. If that is the goal, make sure you’re planning on hiring at least six more people to be ready to close deals on January 1, you’re investing in technology to make those six people much more efficient or you’re planning on changing your sales process to make it twice as easy to close new customers.
Building reasonable goals based on last year’s performance (or on an average of the past few years) is the best way to create attainable and realistic goals and then increase those based on specific investments or tactics you plan to deploy.
Tip #3 – Get Buy-In From Your Team
Coming up with goals in isolation is a fast track to missing those goals. In almost every case, revenue-related business goals are a team sport. If you don’t get your team bought in, you’re in trouble.
People who don’t think they can hit their goals because they weren’t involved in the goal-setting process are more likely to give up before they even get started. They’ll think, “Those goals are unattainable, so why even try?”
The consultants at McKinsey have advice on how to involve your teams in the goal-setting process. Click here to read their guidance.
In some more progressive companies, they’re actually letting individual teams set their own goals. Once the corporate goals are defined, individual teams, departments and even individuals can create their own goals that roll up to support the overall company goals.
As long as that overall goal is attainable, this approach is one worth considering. It might take some coordination to make sure there is no overlap, and some oversight to make sure all of those team or individual goals do actually align, but this is one way to get everyone on the same page and excited about the upcoming year.
Tip #4 – Make Sure You Have All Of The Assets, Processes And Systems To Achieve Your Goals
Goals without the execution to back them up are worthless. Don’t even bother. If you need to double your inbound lead flow, then you need systems, processes, tactics and campaigns to deliver that. If you want to double your close rate on proposals submitted, then you need new assets, training and upgraded processes to deliver that improvement.
Whatever goals you’re looking at, make sure you’re also looking at the internal workings of your company to ensure it’s all set up and ready to go.
Important point: If you’re planning on doing some of that set-up work in January, don’t expect January to be a high-performing month. It might take you a couple of months to get all of the systems and processes set up and working.
Plan and set goals accordingly. That’s why we’re encouraging our prospects to get started with us now, so we can hit the ground running in January.
Miss even one month in 2019 and you’ve lost 8% of the year. That means you’ll be playing catch up for the rest of the year.
Tip #5 – Consider Any Macroeconomic Factors
It’s a smaller tip but an important one anyway. Take a hard look at the economic impact on your business. If we slip into a recession this year, what does that mean for your business? Be prepared. What goes up always comes down.
Create alternative plans just in case. Maybe you want to create two sets of goals, one that is supported by the current economic environment, and one that would be better suited to an economic downturn. It’s always better to have a Plan B and be proactive rather than reactive.
Tip #6 – Look At Your Team And Make Sure You Have The People To Execute
All the experts agree that success comes down to the people on your team. Regardless of your goals, if you don’t have the sales, marketing and customer service team members to drive toward your goals, it’s going to be a challenging year.
Now is the time to review your teams. Based on what you want to get accomplished and your goals for 2019, where are your weak spots? What roles need to be upgraded? Can A-players take on additional responsibility?
The result of this assessment is going to feed your plans through the end of the year and into early 2019, so the sooner you have this team-wide review, the better you’ll be positioned to make the changes you need to hit your 2019 goals.
Tip #7 – Align Execution And Work With Your Goals
Just setting goals doesn’t lay the groundwork for goal attainment. You have to align the execution across your company with your goals. Strategy, tactics, analytics and technology have to be either executed on or installed to help you get to your goals.
This is a little like the chicken and the egg. Which comes first? The programs or the goals. In our estimation, it’s a little of both. You should set your goals based on your ability to execute, and if you’re missing key executables, make sure those get planned during goal setting.
For example, if you have aggressive sales goals but need a CRM upgrade, you can set goals based on the understanding that you will be upgrading your CRM but then have to actually go through with the evaluation, purchase, setup, configuration, training and usage of that new CRM system as early in 2019 as possible.
Every team or department should have an aligned execution strategy and plans that match up perfectly with the company’s revenue goals. You can’t have goals without the execution, and you can’t know what to execute without the goals.
Plan them at the same time to avoid any confusion or misalignment.
Tip #8 – Cascade Goals Down Into The Organization
Part of the previous tip has to do with pushing big corporate goals down into every crevice of the organization. This is how you get everyone, no matter how big or small your organization, rowing in the same direction.
For example, you have a $20 million company, and next year you want to be a $25 million company. To do that incremental $5 million, you’ll need to increase website traffic by 50%, grow conversion rates on your website from 1.5% to 2% and improve the conversion rate on sales-qualified leads to sales opportunities from 20% to 30%.
When you run all of the math through your revenue cycle calculations, this gets you to your goals, assuming all of the other metrics remain consistent as they were in 2018.
Now you need to create the set of marketing and sales programs to support those metrics upgrades, and those programs need to be created and supported by people in the sales and marketing teams.
Individuals on those teams are now assigned to the specific programs required for the company to hit their growth goals. That could be ongoing website optimization, improved content to drive up conversion rates or arming the sales team with better video — the list could go on.
By pushing these goals to everyone in these departments, you can be sure that these people are working on areas that match your overall growth goals.
This runs into every department in the company. HR might need to recruit and hire two new salespeople. IT might need to upgrade the website hosting platform to support more advanced website features. Finance might need to approve the purchase of new marketing technology. The sales team might need to be trained and coached up on how to use social media to make new connections.
Everyone needs to be rowing in the same direction.
Tip #9 – Create A Mechanism To Share Progress On Goals In Rhythm
What gets measured gets done! There is some debate about who said that first (Peter Drucker or Tom Peters). Regardless, it’s a fact. If you want to get something done, make sure you’re tracking and measuring it.
One great way to share your progress toward goals is with dashboards and scorecards. You can have individual scorecards, team scorecards and company scorecards.
You can set up electronic dashboards to pull data from your existing systems and keep the teams updated on progress in real time. Very exciting stuff.
While the real-time, self-service aspect of dashboards makes communication easy, it won’t replace how you reinforce your progress toward goals. Make sure that is woven into any and all ongoing communication.
Whether you have an intranet where you post daily updates on successes, a weekly email that goes out or an update as part of a regular communication session, make sure that your goals are reinforced as much as possible. Be sure your progress is a consistent component of that communication and any changes that take place are clearly communicated in the context of your overall goals.
Tip #10 – Try Not To Pivot Or Change Your Goals, If Possible
Finally, it goes without saying that sometimes businesses have to pivot and change direction. However, you should realize that these changes are going to set you back on your goals. This is especially important when you’re talking about marketing.
If the marketing team starts executing an event program with the goal of getting 50 attendees because you know that five usually become customers, you can’t change direction in the middle of the month without jeopardizing the event program performance.
Marketing specifically requires time for the programs to deploy and gain traction. More time is needed to evaluate the data and optimize the execution to improve performance. Rarely do programs take days to install, days to run and days to optimize — there generally is not enough data flowing into the program dashboards to make informed decisions.
Stick to your guns. You created your goals, strategy and tactics for a reason. You selected the technology for a reason. Give that plan enough time to work before you scrap it and start over. If you are going to start over, recognize this as a setback toward your goals, and reset those goals realistically.
The tips covered here highlight how challenging this entire process is. It takes discipline. It takes a trained hand, solid leadership and tight communication. The first year you work like this might feel choppy and uncomfortable, but year two will feel better, and by year three you’ll be an expert.
All business is hard, but make yours just a little easier by following these goal-setting guidelines going into 2019.
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