Do you find the process of setting goals for your company great in theory, but not so great in practice? Perhaps you and your team set goals but soon forget about them. Or perhaps you set goals, but everyone doesn’t properly buy into them. Or perhaps you set goals, keep them in mind, and get everyone bought in, but then still don’t achieve them. Unless you master the process of business goal setting, your development in business and life will stagnate and you’re unlikely to realize your full potential.

Going from quarter to quarter without any goals is like playing darts blindfolded hoping that you’re going to hit the target. Although you may think business goal setting is a difficult process, it’s actually quite simple. All it takes is mastering four simple principles, which we’ll cover next.

4 Principles for Business Goal Setting

#1 Power your business goals with a vision that extends beyond the company 

The first thing that you need to do when it comes to business goal setting is ensure that your goal setting process or your entire company is powered by a vision. When we were building Skype in its very early days, our tagline was: “The whole world can talk for free”. You can imagine the revolutionary spirit that this created inside all of us – we knew we were doing the world good. We knew that we were serving a purpose that went beyond just the company. 

A lot of times I’ll come across groups or teams or companies that have a vision along the lines of becoming number one in their market, or at least being within the top three within the market. That’s great, but that’s fairly self-serving. Few frontline employees will feel genuinely inspired by the company being number one, or number two, or number three in its market.

While visions like this might motivate the leadership to a degree, they won’t have much effect on those doing the lion’s share of the work. Whereas “The whole world can talk for free,” with Skype really motivated everyone in the company – and even extended to our customers, because they were part of that mission too. 

Having a vision that extends beyond the company; that extends beyond the team; that encapsulates the positive impact that you’re trying to have in the world; that’s the first step for a really sound goal-setting process, because you want to tie everything back to your inspiring vision.

#2 Select a business goal-setting framework

The second thing that you really need for a great goal setting process is a framework. I personally love using Silicon Valley’s favorite, OKRs – the acronym for objectives and key results. This framework is really simple. The objective is what you want to achieve, and the key results are how you’re going to do achieve it. So, as a quick example, let’s say your objective is to grow sales. Then the key results could include increasing the price of the products, opening a new geography, adding new payment methods, and driving transaction volume. All of these relate to how you’re going to achieve the objective of growing the sales.

Last but not least, OKRs should have clear owners and deadlines and be specific and measurable, as is the case with traditional goal-setting frameworks. 

business goal setting

#3 Push the “how” to the team

As mentioned, the objective within the OKR framework is what you want to achieve and the key results are how you’re going to achieve it.  As a leadership team it’s important to get aligned on the company’s key objectives. But once that’s done it’s best for the individual teams to go away and come up with how they plan to achieve the objectives – that is, to come up with the key results for each objective. This fosters far more buy-in as well since the wider team becomes a key part of the entire goal-setting process. Encourage the wider team to brainstorm and think through how they’re going to come up with the key results for the various objectives the company and senior leadership team have set.Naturally this should include the key owners, deadlines, and metrics for every key result they set.

#4 Have clear communication and accountability rhythms

The last principle to follow is creating clear communication and accountability rhythms. On a quarterly basis this means both evaluating the progress against the company goals for the previous quarter and setting the new company goals for the next quarter, followed by communicating everything to the wider company in form of a quarterly town hall meeting. On a weekly basis each team member should publicly traffic-light their progress against their OKRs as part of their weekly team meeting. This means stating whether each of their OKRs are green (on-track), yellow (off-track), or red (seriously off-track). Any yellows or reds, whether they relate to entire OKRs or just certain key results within an OKR, should be thoroughly discussed by the team in the spirit of getting them back on track. This consistent public scoring and discussion drives accountability, ownership, and teamwork, which ultimately drives performance.

business goal setting

In summation, business goal-setting isn’t nearly as complicated as it’s made out to be. Make sure that you’re powering the entire process with a vision that really matters, that goes beyond the company, and that’s not just serving the company, its leadership, and its shareholders. You should be able to point out how the company’s goals relate to the bigger vision and the positive impact that the company is trying to create in the world.

The next thing is to have a framework for your goal setting process, such as OKRs, which are tried and tested.

Thirdly, make sure you’re pushing the “how” down to the teams so they contribute to the co-creation process. 

Finally, make sure that you have quarterly and weekly communication and accountability rhythms to drive performance..

Four simple principles to elevate your company to the next level – and if you want to find out how to scale yourself or your business take my FREE assessment here. Check out my Amazon best-selling book, The 3 Alarms, to discover a simple system to reach your full potential in business and life.

Summary

Power your business goal setting process with an inspiring vision. 

Use a framework like OKRs to bring your business goals to life.

Push the “how” down to the team. You define what you want to do, but you want the teams to define how they’re going to do it. 

Have clear communication and accountability rhythms to drive performance.

About Eric Partaker

Hi, I’m Eric Partaker and I coach CEOs to help them scale their companies and themselves, drawing from my time advising Fortune 50 CEOs at McKinsey, my experience helping build Skype’s multi-billion dollar exit, and the over 100 companies I’ve helped scale to date – as well as behavioral science from Stanford University.

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