5 Tips for Setting Effective Business Goals in 2022
30 December 2021 |
The C2FO Team
Getting and staying on track is more important than ever in the ongoing and ever-changing COVID-19 business era.
Like many a New Year’s resolution, these time-honoured maxims are often cited, but not practised or fulfilled. In fact, according to Inc. Magazine in 2020, barely more than 10% of resolutions are typically achieved.
Fortunately, goal setting can be applied to both personal and business pursuits — the weight you’ll lose, miles to be run, books to read, sales or profit to achieve, jobs to create and hires to make, etc. Luckier still, the act of goal setting requires little beyond the willingness to do so, be it with pencil and paper, a smart phone app, Google doc or spreadsheet.
With many of 2021’s business challenges continuing in 2022 — think supply chain delays, inflation, labour and logistics to name a few — can you afford not to set several business goals in the new year?
Therefore we offer five proven tips for setting achievable goals in the “new normal” era, ones that can be built upon for future success.
Before you sit down to set goals, review your company’s “why.” What drives the company forward? What inspires you to come to work each day? Viewing author Simon Sinek’s classic TED Talk or reading his “Start With Why” book can help here.
It’s important to connect vision to strategy. Take stock of what your business accomplished in 2021 and where you fell short. Then, connect each of these achievements and losses, and think about how they fed your ultimate mission and how new goals can complement your game plan for the future.
Whether you’re hoping to improve the financial health of your business, increase market share or create a new product, SMART goals — ones that are Specific, Measurable, Attainable, Realistic and Timely can help get you there.
Developed by professors and entrepreneurs in 1981, SMART goals create a framework that promotes clarity and discourages vague or imprecise language. Consider using this method to create specific, well-defined business goals that are attainable and promote growth.
Setting OKRs, or “Objectives and Key Results,” is another valuable approach to goal setting and tracking progress. OKRs evolved from a collaborative tool introduced by former Intel CEO Andy Grove in the 1970s. OKRs comprise an objective — a clearly defined goal — and three to five key results — specific measures used to track the achievement of that goal.
These high-level, qualitative, inspirational goals are quantified by key results, which measure the success and impact of the ultimate objective. Like the SMART method, OKRs define how to achieve objectives through concrete, specific and measurable actions.
In a Harvard Business Review article, the authors argue that strategy, an abstract concept, is being hijacked by numbers, or performance metrics. Our tendency to mentally replace strategy with metrics can destroy company value, according to the article. This tendency, also called surrogation, is especially harmful when the metric and the strategy are poorly aligned. The greater the discrepancy, the bigger the potential harm.
To avoid this phenomenon, the article suggests loosening the link between metrics and incentives, and making sure those responsible for implementing strategies also help formulate them.
The key to effective goal setting lies in motivating employees. When done correctly, goal setting can help improve employee engagement in a way that elevates performance and benefits organizations overall, according to McKinsey & Company research.
Consider team size, company culture, and individual strengths and weaknesses. Because people tend to invest themselves more fully in goals that were set specifically for them, linking individual goals to company objectives can help employees grasp the direct impact of their performance.
The Bottom Line
Goal setting for personal or business benefit is an evergreen, all-year activity and different from ill-fated New Year's resolutions. At least quarterly, you should create, define and track your business objectives.
To ensure the future success of your company, monitor progress regularly to hold yourself accountable for successes and failures.