The last ten years have been tumultuous for business. In 2005, how could anyone predict the next ten years? The good news is you don’t need to predict the future to set high quality goals.
Goals represent leadership, the “what will we accomplish” decisions of business. From that goal, managers know to what milepost to manage. For example, if one goal demands doubling sales in five years, production managers know they must produce twice the product in five years. Is this goal met through more efficient use of facilities or more facilities?
Before you set the goals, let’s define what a quality goal is. Three characteristics of a quality goal embody the “how do we accomplish” question:
- The goal must be realistic, achievable. Don’t aim low, but don’t be outrageous.
- The goal must be measurable. “We want harmony” is not measurable. Our gross sales will exceed $1,000,000 is.
- The goal must be reviewed periodically to track progress and current relevance. If your goal was to own 200 video rental stores by 2014, on-line and kiosk venders put a kink in that plan years ago. That goal would change mid-term.
Review your existing Balance Sheet and Profit and Loss statements for the last three years. These “hindcast” numbers will help formulate short-term (1-3 years) forecast numbers based on current operating conditions. The forecast may be part of your accounting services package already.
Understand these numbers and work from this baseline.
Trends in Your Current Market
Is it likely to grow or shrink? Will you hold your current market share? Use those hindcast numbers to help see a trend. Be realistic.
Industry and Global Trends
Okay, maybe you do need to predict the future a little bit. If your industry is new technology driven, well, would you invest the bank in wired communication technology? What is the economy of scale for your business?
Does your product or service have a future or is a better solution on the horizon?
Does your business need constant technology upgrades that keep your research and development people hopping, or is modernization simply a convenience?
Can you expand globally or is your product or service for local use only?
Spot trends that dramatically affect your industry. Include regulations, new competition, substitutable goods or services.
Key Personnel and Demographics
List key employees; the ones who are not easily replaced. Now figure out how to implement a mentorship program that will help prepare employees to move up internally.
Retirement, death, better opportunities, burn out, or entrepreneurship can all lead to losing key employees over a ten year period of time. Realistically, how do you prepare for these outcomes? You can insure against some, offer ownership, mentor, force vacations, try to make the company fun. Look down that road and plan.
What are you planning to do, retire, keep working? Think about your personal bucket list. Will you be running the company ten years from now?
Goal Setting Context
Gather the structural data mentioned above. Understand the pertinent timelines within each structural component. Now create your goals: numeric goals, specific, measurable and review-able goals which meet the timelines of concern and business needs. Don’t forget about yourself in these goals.
Ten-year goal setting is about vision within a reality framework. The game plan comes together when you start asking yourself about how to realize your vision. Where do you need to be seven years from now? Five? Three? End of this current year?
Leadership, goal setting, vision is about choosing the path; management is about clearing it and the EOS business coaching system helps keep your business on track.