How To Set Goals & Create a Clear Company Vision

Transcript:

So imagine you’re setting off on a car journey from London to Manchester, but you don’t have a map, you don’t have sat nav or any other techno-gadgets, how would you get on?

Well, for most people, they would never even get to Manchester. Some may make it eventually, but it could take them many, many hours or even days to get there. Yet with a map and a route properly planned, it should only take a few hours.

So if we apply this analogy to your businesses and to your lives, we can start to see the fundamental importance, that setting clear goals and plans has on your future long term success. So the ability to set clear written goals is a crucial business skill that I am going to explain further today.

We have a four-step process for defining your goals and achieving success, and that process is Dream, Goal, Plan, and Act (taking action). So firstly, all of the great leaders started with a dream – a dream for themselves and for their businesses. If you are going to dream, you might as well dream big of course. It does not matter how you are going to achieve that dream. What’s important here is that you don’t let that how question sabotage your dream before you’ve even started. You just have to believe that, that dream is possible.

Running a four-minute mile was meant to be physically impossible according to the medical profession, and in fact most people at that time believed that to be absolutely the case. Yet Sir Roger Bannister proved otherwise when he broke the four-minute mile in 1954 in Oxford. The interesting part to this story is that once he broken that four-minute barrier, 21 athletes also broke through that four-minute barrier over the next five years.

So what a change to those athletes? All that could have changed in such as relatively short space of time was their belief in what was possible. And once Bannister had proved what was possible, their belief significantly increased.

History is full of examples of the power of dreaming big. Richard Branson is a great example. When he started Virgin Galactic, I suspect even he didn’t know if he was going to make his space flights possible. More than 10 years after he started his business, they have still only completed test flights. Yet working out those enormous complexities of how, hasn’t stopped him pursuing a huge dream.

Bill Gates had a dream in the 70’s to put a computer in every home on the planet. A dream so huge it could not be contemplated by many, yet his dream provided the energy and the inspiration to drive literally tens of thousands of people over the last 30+ years to work tirelessly and single-mindedly towards achieving that dream.

So the dream for any business is typically defined and communicated by a vision statement. So the obvious question I have to ask you therefore is, “Do you have a vision statement for your business”? No matter how outlandish or far off in the future it maybe. Has your vision been documented in writing, where would I see your vision statement? Has it had been rightly communicated to your team, to your customers even? Do they actually know what it means or are you assuming that they somehow understand what it means? Is anyone remotely excited by it? Or is it just words on a page to them?

It is essential that your business does have that clarity of vision because your vision will serve to engage and inspire the people that work with you. They will feel like contributing towards the vision of the company rather than just turning up and working for a wage.

People tend to respond very positively when they know they are working towards a purpose. Without the company vision, there is no purpose resulting in a pretty uninspiring environment for all concerned. In his famous TED talk, Simon Sinek explained the importance of defining why you do what you do rather than just talking about what you do which is of course what most businesses do. He talks about the impact that defining why you do what you do has on your people. I absolutely recommend that you find and watch this TED talk. It is one of the few viewed TED talks of all time and it is a fantastically entertaining and informative ted talk.

Once you have your business vision, this should also be underpinned by a clear set of core values and a defined company culture. Now values may sound fluffy to some, but are hugely important. And as for your company culture, well you just need to look at the success of online shoe retailer Zappos. Zappos were one of the fastest growing businesses in history. They went from 0 to over a billion dollars in annual revenues in under 10 years and they famously stated that clearly defining their company culture and only recruiting people who perfectly aligned with their culture and with their values, was one of the primary drivers towards their phenomenal success.

And what are goals then? Goals serve as the stepping stones to your dreams.

Every successful person be in business, in sports, or whatever their walk of life is, every successful person is intensely focused on their goals. Can you imagine an Olympic athlete like Mo Farah, in the years leading up to the London Olympics not knowing what he was trying to achieve. Of course that would have been ridiculous.

So a clear set of written goals is exactly what I expect to see in any forward-thinking ambitious business. But what does good goal-setting actually entail?

Firstly, if you are thinking possibly of selling your business in the future or maybe exiting partially or completely at some point, then that final outcome needs a clear definition.

Then I suggest working on your long-term goals – meaning 3 year or 5 year goals. Most leaders struggle to think out any further than that time frame.

Add to that the more medium term 1 year goals and then the short term 90-day or quarterly goals. These short terms goals are very important because one year is still a long time in business and can feel quite overwhelming for most people so you need to break those one-year goals down into much more manageable bite-sized chunks.

I’d also advocate a one-year plan starting with a one year financial plan, normally a cash flow forecast or a PNL forecast for your business broken down month by month. I personally favour the cash flow forecast because it does show the true cash position for your business and as we know cash is king for any business. In fact, I’d say the cash flow forecast is the single most important planning and business management tool that I have ever come across in my years of coaching.

So this goal-setting process that I have explained is the first step we go through whenever my team and I start coaching any business; however, that is not the end of it, I’m afraid, there is still more to this. Each quarter consists of 13 weeks so there should be some form of weekly time plan driven by your diary which include not just your regular meetings, but also pre-schedules your priorities in that diary whether those priorities are marketing tasks, PR, building system, managing and mentoring your team and so on. You decide what your priorities are for each week based on what you define on your 90-day goals. We call this type of diary, a default diary.

So before you all rush off excitedly and start writing your vision and your goals, please bear in mind where people go wrong with this. I have identified three common mistakes that I’d like you to address so you don’t go and make the same mistakes as well.

The first of those is that your short, medium, and long-term goals need to pass the SMART test. SMART is a commonly used acronym in goal setting as you can see here on the screen. [Slide: Specific, Measurable, Achievable, Realistic, Time bound] Now the biggest mistake that I see when people are setting goals is that they are too woolly or fluffy. People say to me they want better quality clients or that they want more income. Well, what does that actually mean? They need to be far more specific in their goal definition and ideally, the goal needs to be measurable or quantifiable in some way.

So if it is more income, what do you mean by income? Is it more revenue, more profit, gross profit, net profit, more cash in the bank, more clients, a higher profitability per client, or is it that you just want a higher annual dividend paid to the owner or the owners of the business? So once you have more specifically defined that goal, you have to work out well what is that figure now and what do you want that figure to be in the future and by when exactly. Can you even put a date on that?

The second common mistake that I’ve seen is that goals never actually get written in the first place, despite the best intentions, usually due to the excuse of time. So as a result, those goals are swimming around in somebody’s head somewhere which is no good at all. So you must set aside time to work on these goals, a minimum of one to two hours but usually it takes a lot longer and ideally you should start that exercise now.

Finally, the third mistake that I see is that you should review progress against your goals on a regular basis. Very often people write the goals, but they never look at them again. They are on a computer file somewhere or they are written down, put in a desk, and forgotten about. The best thing to do is to make them visible to you. Print them out, have them on the wall in your office. We have them written on a whiteboard in our office. Everyone can see them every time they walk in and out in the office. It means we are focused on them every day. Many of our clients also have the goals on their phones and I also have them on the laptop. This way you get to see those goals regularly, daily almost, and can then formally review progress against those, every month or even every week.

So please do go through these goal-setting exercise that I have explained if you have not already done so in your business. Define your vision, your long, medium, and short term goals and also update your one-year financial forecast, but please do of course avoid those three common pitfalls that I have highlighted.

If you do follow these process and do it well, I know that you and your business will really enjoy the long term benefits.

So please go ahead, good luck with that exercise and enjoy it. It is your future.

Thank you!