Thanks to Partner, Mark Nuelle for sharing this post!
In his book, “What They Don’t Teach You in the Harvard Business School,” Mark McCormack shares a study of students in the 1979 Harvard MBA class, in which the students were asked, “Have you set clear, written goals for your future and made plans to accomplish them?” Amazingly, only three percent of the graduates had written goals and plans; 13 percent had goals, but they were not in writing; and a whopping 84 percent had no specific goals at all.
Ten years later, the members of the class were interviewed again, and the findings, while somewhat predictable, were nonetheless astonishing. The 13 percent of the class who had goals were earning, on average, twice as much as the 84 percent who had no goals at all. And what about the three percent who had clear, written goals? They were earning, on average, ten times as much as the other 97 percent put together.
The Harvard study, and many other studies, supports the view that goal setting is one of the most critical ingredients in driving individual and business performance and achieving desired results. At the personal level, goals may relate to increasing earnings, developing new skills, obtaining advanced degrees, traveling, and so forth. On a business level, goal setting typically takes the form of the annual business plan broken down by divisional, geographic, and/or product revenues and expenses.
Many small and mid-size businesses have not implemented written business plans nor utilized MBOs (management by objectives) for their staff. These companies are at a distinct disadvantage as compared to the competitors that have adopted written goals and plans. In these challenging times, that’s an advantage their competitors shouldn’t have.
While personal and business goals may be different, both are based on similar principles. In order for goals to be effective, they should have the following characteristics. Goals should be:
• Clear, specific, and written,
• Measurable (i.e. the desired outcome should be quantifiable and have a target date),
• Deeply desired – they should generate excitement (you have to really want it!),
• Possible to achieve, and
• Deserved to be achieved.
In addition, there are a few other principles that come into play.
There must be commitment. The individual or organization must be committed to the outcome. Commitment requires sacrifice and it is often easy to find reasons to give up. So, there must be persistence and a “whatever it takes” attitude. Persistence will overtake talent every time.
Goals must be consistent with the individual’s or organization’s values. If the outcome is not consistent with who you are, internal conflicts will arise that prevent the necessary action from being taken that leads to the achievement of the goal.
There must be an emotional connection to the goals. You have to really want it. You have to feel a burning desire that compels you to take action. So, how do you do it? I have found that goal setting is most effective when you utilize all of your senses. Start with visualization. It is critical to have a vision of what you want and where you want to go. In “The Seven Habits of Highly Effective People,” Stephen Covey talks about beginning with the end in mind. What he’s talking about is visualizing the goal first. Many people struggle with goal-setting because they don’t visualize. If you are going to drive cross country you can get in your car in New York an d start driving and hope that you get to L.A. Or, more effectively, you will look at a map, find L.A. and plan your route from the end back to the beginning. (OK, I’m showing my age – most of you would have put the city in your GPS, but I’m making a point here!)
Once you’ve visualized the outcome, the next step is to make the emotional connection with it. You need to feel what it will feel like once you’ve achieved it. Visualize the rewards, hear the roar of the crowd, feel the emotions of the successful outcome, smell it, taste it. These representations will begin to compel you to action. At that point, you then need to stay focused on the goal and keep persistent. Ignore the naysayers; there will be plenty of them. Have laser-beam focus and keep that “whatever it takes” attitude.
How do you make goal achievement real? First, never leave the site of a goal without taking some sort of positive action toward its attainment. You need to create momentum. Achieving your goals is a daily activity. People often fail to achieve goals because they set the goals and then fail to take the daily action necessary. At times, goals need to be modified as circumstances change. This is particularly important in business. So often, businesses set annual plans and then leave them alone until the following year when the next annual planning meeting occurs.
Business plans need to be reviewed, evaluated, and adjusted throughout the year, at least on a monthly basis. Periodic reporting of actual results against the business plan should cause management to change its actions to ensure that the organization’s goals are achieved.
So, to sum up, goal setting is a dynamic, on-going process, not a one-time process to be looked at later. Goal setting and a written, monitored business plan is critical to the health of your business and the success of your staff. Goals should be those things that truly inspire you; they must be lived and breathed every day. Make them compelling and make them big. Be focused and persistent and it is amazing what you will accomplish.
The partners at B2B CFO® are among the best in their profession, particularly at bringing financial and goal clarity to small and mid-size businesses. Please contact your local B2B CFO® partner for an evaluation of your business planning and goal setting practices.