Goal setting for startups

Ray Palio’s “Principles” was a thought provoking read, especially when it came to goal setting. One of the concepts he introduced me to, was this idea that people often talk about different levels of goals at the same time. When I read that, a light bulb went on in my head because I had seen so many people treating their dreams like a shopping list, with no clear distinction on time to accomplishment, difficulty or deadlines.

Goal setting at different levels

I learned, quite early in University, goals can either be strategic , tactical or operational. I would argue the word “strategy” is overused. Indeed , strategy is important for any business, including a niche or micro business. Strategy is an overused word because people often confuse strategy with tactics , start strategy at a low level in their business or use it in their marketing because ‘it’s the latest buzzword.

Let’s face it, strategy sounds cool, which might be why we’ve used it so much it’s lost any real meaning.

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Long term strategic goals

Strategic goals are long term. In the western world this is (or at least was) considered to be 3- 5 years. In contrast, Japanese businesses plan in decades. Perhaps this would explain why Japanese businesses have some of the longest surviving businesses , including construction company Kongo Gumi, which operated for 1,400 years, since 578 AD.

Think of your business’s own strategic goal setting, as the destination for a massive cargo ship . They’re heavy, they move slow and are difficult to steer. Still, this particular cargo ship carries your entire business on its deck. When it reaches its intended destination, your business will be a huge success . You can give everyone who ever doubted you the finger because you have arrived.

1 hit could sink your ship

Like every great Hollywood film, we need to consider an alternative ending. Imagine a rogue wave tips your cargo ship over, causing significant damage to your stock, sinking the ship and killing your crew. Then the contents of the ship spill out polluting the ocean, killing wildlife and generally causing havoc. Sure, it makes for a more gripping movie starring Marky Mark but not a great business.

At the risk of sounding dramatic, (oh wait. I think I have already) one strategic goal change could make or break your business. Poor strategic goal setting could literally sink your ship and leave a devastating trail of destruction in its path. Yet, people get caught up in the day to day operations or less important (but seemingly more urgent) tasks.

Where Airbnb steered their ship

Early on in their journey, Airbnb founders , Brian Chesky, Joe febbia and Nathan Blecharczyk made a single strategic decision . Instead of using their technology to be another “hotel booking service” , they decided to enter a new market: people who had rooms to rent in their own house. Imagine if they joined the dozens of hotel booking apps that were already out there. They would be lost in a sea of competitors doing essentially the same thing, in the same market.

Tactical goal setting

Imagine now, if you will, your business has 3 large tug­ boats. Together , they can turn the ‘cargo ship , in any direction they want, however, without that ship full of goodies, they will not have much of an impact.

Tactical goals are a bit like this. While strategic goals might be want you want your business to achieve over years of decades, tactical goals are what you want to achieve over the medium term, usually several months. For example, a single campaign or project , which contributes in some significant way, to the overall strategic goal. If you lost one of these tug boats to an engine fire, (hey, why not keep the drama going?) your business would take a significant hit (33 percent). But the other two tag boats could keep your business and two thirds of your cargo afloat.

Operational day to day

Now, imagine you have 30 speed boats . They’re fast, easy to manoeuvre and although they cannot carry an entire shipping container of goods, they can carry half a container when unloaded. The cargo ship needs these speed boats , so it can deliver the goods to their final destination . After all, the. cargo ship is so large it cannot easily dock on a beach. Without the speed boats , the ship would simply sit out in the sea, unable to realise its purpose. These speed boats are like operational goals. They’re the day to day, the week to week and the people executing the plan on a fundamental level.

Aligning your goals

Do you see how each level of goals needs the other? So, when you start your goal setting, all of your goals need to be compatible. Move in the same direction.

Measure what matters

Measure What Matters details an approach to goal setting for larger organisations, called “Obectives and Key Results”. Objective or goal setting is done at the strategic level . Then, they have a small subset of key result areas of indicators , which contribute to those main goals. Other teams then pick up these key result areas and turn them into objectives for their team. This way, each team knows what they are contributing to the bigger picture.

Why should startups care?

Goal setting in your own niche business does not need to be complex, however, I always suggest people start with the long term or strategic goals. Then set tactical goals, which contribute to your strategic goals. Finally, your operational goals and plans, need to contribute to your tactical level goals. This way, you’re not working against yourself by working on incompatible goals.

Even if you don’t have a team, you need to work between long term, medium term and short term goals. Remember ticking off today’s goal might be satisfying but it is unlikely to have a similar impact to your higher level medium or long term goals. As Dalio said in “Principles”, working on different levels of goals at the same time will only leave you confused. Start with long term goals and work your way down.

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