Every business needs to set targets for success, but how do you set the right targets for your business? It starts with you setting the overall direction, determining where you want your company to go and documenting it in an easy-to-understand strategy summary. Once created, this document should be reviewed by your team throughout the year to be sure you’re on track to achieve milestones and goals.
Set the overall direction of where you want your company to go
“Think little goals and expect little achievements. Think big goals and win big success.” – David Joseph Schwartz
The first step in setting the right targets for your business is to establish or review your company’s purpose (mission) and ambition (vision). Even if you have a purpose and ambition statement, it’s always a good idea to review them at least annually to see if they are still relevant to how your company has matured and where you want it to go. If not, it’s time to update them. And, if you never developed them, this is the perfect first step to setting the right targets. Be sure these statements are inspiring and precise. Everyone in your organisation needs to have a clear understanding of where they are heading if there is any chance of getting there.
Next, with purpose and ambition in mind, it’s time to create a simple one-pager that captures your company’s top-level plan, objectives and priorities. This will help your odds of being one of the 10% of companies to actually turn their strategic goals into results, because it will be easy for anyone in the company to read and understand what the priorities are, focus on what’s important, monitor and manage how the team is progressing toward those objectives.
A crucial part of any company’s plans and target setting process needs to include external changes that impact your business in the next year. Businesses are impacted by legislation such as the EU General Data Protection Regulation (GDPR) and new regulatory requirements may shift your strategy. There’s no doubt that Brexit, and similar decisions, will affect businesses operating with or in the UK.
Your Plan-on-a-Page should include:
Your purpose: Include your purpose (mission)—why your business exists—and ambition (vision)—what the organization wants to achieve in the future—statements.
Customer Goals: This should include goals around customers and target market – things like customer satisfaction or loyalty goals, market share growth, etc.
Finance Goals: Where you define how you will drive revenue growth, deliver profits, maintain cash flow and fund your strategy.
Operations Goals: This should include goals for the processes you need to do better internally, how and where you might want to improve efficiencies and expand your capabilities. Here you would also look at goals regarding partners or suppliers.
Resources Goals: Where you define the enabling goals around key resources such as people, IT systems, infrastructure as well as the company culture.
Competition and Risk Goals: While this is often overlooked on strategy documents, it’s important to be aware of external factors that might threaten your success and set goals to mitigate the risks and perform well relative to your competition.
Once you have mapped out your goals across these different parts of your business(overall no more than 15 or so) you define individual measures and targets for each goal.
Set the right targets for your business with these tips
Every goal needs a number of key performance indicators and targets to measure and monitor success against. Here are some tips to keep in mind when you set targets:
1. Research teaches us that the most successful targets are those that are stretching but realistic and achievable.
2. In order to make them stretching, realistic and achievable you need to benchmark your targets. On a most basic level you can simply base line current performance levels, look at trends and then stretch your target accordingly. More sophisticated ways are to look for external comparisons, industry benchmarks and best practice standards to help set targets.
3. Every target needs a time reference, i.e. by when you want to achieve it. To improve customer satisfaction is not a great target. To improve customer satisfaction (measured by the NPS score) from 55 to 65 by the end of 2019 is better.
4. It is also a good idea to set different milestone targets for different time-frames, e.g. short-term (next quarter) and longer-term (next year, two or three).
Once your targets are set, there are a few more things to consider:
1.Make sure you establish an action plan on how you will achieve each of your targets and milestones.
2. Make sure you monitor the performance against your goals and targets on a regular basis.
3. Make sure you review and adjust your targets regularly to reflect changes in your performance as well as the external environment.
4. Finally, make sure you celebrate and reward the successful delivery of targets and goals.
It doesn’t matter what products or services you sell or whether your company is multinational giant or a small start-up, setting the right targets for your business is the way to stay focused, keeps your organisation advancing forward and sets your company up for success.