Plans usually start with a number goal. “We want to grow by X percent this year?” “We want to increase our market share to Y level.” “We want to acquire Z new customers per month.”
There’s nothing wrong with numeric targets, but they require an aspirational goal to drive action. Numeric goals on their own are not enough.
Roger Martin writes in his new book, Playing To Win: How Strategy Really Works, “A company must seek to win in a particular place in a particular way. If it doesn’t seek to win, it is wasting the time of its people and the investments of its capital providers.”
Sales goals and market share targets are useful, but they don’t drive strategic decisions.
What does your business strive for?
Don’t confuse the question with your mission or vision statement, or business values and purpose. Think more tactical and practical.
Howard Schultz set out to innovate in the coffee shop category by making Starbucks a “third place between work and home.” This is a very clear statement that guides the organization to create a unique retail experience that encourages its customers to treat Starbucks as a community and residence.
Another tangible goal could be to crush the 800-pound gorilla in your industry. That was a founding goal of Salesforce.com. Marc Benioff “waged war” against the traditional client-server software model, and led the charge with their “No Software” campaign. Siebel Systems was the perceived leader of the client-server software providers, and the enemy Benioff tasked his organization to crush.
Your strategic goal is a lens
A well crafted strategic goal is aspirational and motivating. It drives action, because it helps your team understand what they’re working to achieve.
Tangible strategic goals act as a decision making lens. They guide management and staff to make decisions in the context of the goal. The clarity of the goal sets priorities, and leads to faster decisions.
For example, Starbucks’ staff can evaluate if new programs, food options, or promotions support the goal of creating a “third place.” If they do, the team can execute on them. If they don’t, the team can make quick decisions and move onto more productive work.
Numeric goals create uncertainty
Without a tangible strategic goal, numeric goals can derail a strategy.
Isolated numeric goals present two challenges. First, it’s hard to convert a numeric goal into action. What does a few more sales really mean? Why does the growth rate really matter?
Second, isolated numeric goals tend to backfire with the rank-and-file staff. If they don’t know what they’re working towards, they may view the purpose of growth goals as simply ways for increasing executives’ bonuses.
Set the bar high
What is your business striving for? What is its tactical, practical goal that drives the organization to work hard and achieve more?
A couple of thoughts. I like your point about Starbucks staff. We use the SMART (Specific, Measurable, Attainable, Realistic and Time related) framework as widely as possible when we work with clients because, to use a modification of that old expression, if you can't measure it you won't know if you've achieved it. And I believe that sales results are an output of a good strategy, not an end unto themselves. They're budgets, forecasts, goals only to the people who have to achieve them.
@JimStewart Thanks for sharing Jim. I like the SMART acronym. That's very effective.