Welcome to a new year! At least the planning for one, which always comes around before we get to pop the champagne.
We all have high growth as our maniacal focus every minute of every day. We work hard. We dream big. But across our portfolio, many ScaleUp leaders are hesitant to turn those big dreams into tangible goals for their teams – cascading down to their reports’ reports and individual contributors – to execute and measure themselves against. How is it that one of the most effective tools for generating performance, morale, and belonging is pushed to the wayside?
Formal goal-setting may seem daunting and time-consuming, but without goals, employees and managers will focus on what they like or what they think is important. Goals are a mechanism for the CEO and senior leadership team to ensure that every employee is focused on outcomes that matter.
ScaleUps need to be hyper-focused on results, and rigorous goals are even more important for the speed, efficiency, and difficult trade-offs needed to make an impact.
We’re here to help you avoid the top four mistakes ScaleUps make in goal-setting and help you prepare for success with four actionable steps.
The top four mistakes ScaleUp leaders make when planning for the new year:
1) Thinking they’re “too nimble” to set goals
You’re an early-stage company, growing quickly and constantly in communication about your vision and the outcomes you’ll drive. And while you may be moving fast, you need to establish a goal-setting cycle that matches the rhythm of your company. Whether you use Objectives and Key Results (OKRs) on a quarterly basis or Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART) goals on an annual basis, you should find a goal-setting construct that works for your organization. If you don’t set goals, employees may prioritize tasks they find interesting or fulfilling rather than tasks you need them to execute to hit your goals.
2) Confusing tactics with goals
This is the biggest source of confusion around goal-setting rigor – and it connects to the misconception that small companies are too nimble for formal goals. Let’s clarify it:
- Goals are strategic outcomes that drive long-term organizational performance and growth. For example:
- “Set Revenue Target of $712mm this year”
- “Launch refreshed Product A by end of March, resulting in $XX contribution to revenue growth”
- “Hire SVP Sales by end of Q1”
- Tactics are the maneuvers you or your company execute to achieve your goals. This could include rolling out an integrated campaign, targeting a top competitor, or signing a new vendor. Tactics may change as some are achieved and new opportunities present themselves or priorities shift throughout the year.
While tactics may (and likely will) change, goals must still be met for the organization to achieve its financial and other strategic objectives.
You don’t know what your tactics will be in 2022… plus the budget might not be done until February. We can set goals then, right?
Not ideal. Ideally, companies should set goals in advance of a new business year, so resources can be identified and funded before the start of a new year, NOT after the budget has been set or the year has begun. Remember, these are big-picture goals, and they likely have big tactics supporting them. It’s okay if tactics change, but to set your teams up for a productive year, you need to publish goals early enough for them to cascade down through your organization – ideally, by year-end or early in Q1. If necessary, find some comfort with uncertainty and set aggressive goals early, so that your teams have enough time to set their own with a full 12 months to complete them.
4) Not cascading goals down throughout the organization
How far down the organization is far enough? Often, companies try to stop with team-level goals, but this increases the burden on your already-strapped managers to constantly level-set with their teams. Establishing clarity early in the year will pay dividends in time saved. Especially at ScaleUps, everyone’s work is important to company goal achievement. Person-level goals are not only important to stay focused, but they’re also critical to the ongoing accountability structures that help every person fully contribute.
The not-so-secret secret to a winning culture
When goals are set and communicated by the executive leadership team, they result in transparency, trust, and alignment throughout the rest of the organization. From the most tenured veteran to your most recent hire, everyone on your team yearns to be engaged with achieving your mission, and a well-structured, cascading goals structure makes it clear how each person contributes to the greater organization. This clarity assists in easy prioritization, conflict resolution, and accountability. Teams, leaders, and all team members also flourish with accountability and feedback.
As you dive into goal-setting, you can follow the 4 easy steps shown below to set your company up for success.
4 steps to goal-setting for your best year yet:
1) Start now.
Bring your leadership together to set company-level goals early. Choose a timeframe that works for you and be stalwart in setting goals. In alignment with company-wide goals, it is up to each function to set its own goals to ensure that every effort and investment clearly and directly supports the organization’s aggressive goals. Ideally, this is completed by year-end, so every employee knows what to focus on to make the most of their efforts in 2022. This upfront time in Q4 will increase the velocity of results, and therefore, the growth rate that each company strives to achieve in the year to come.
2) Set 2022 goals for your organization, your teams, and each person.
To make the most of the goals you set, employ the goal-setting framework that works best for your organization (e.g., OKRs, KPIs, SMART goals). Ensure that everyone’s goals include a development goal that articulates a path for growth and motivation in 2022 and beyond. Goals should be clear enough for each employee to own their own development path, with guidance from their manager and mentor. Well-defined goals and tactics specific for each team and person will help you set expectations for accountability while ensuring the goals are motivating to your employees.
3) Engage your employees.
Remember, people don’t just want to work for a paycheck – they want to work for a purpose, a mission, and a boss who cares about them. Connect goals to your company’s mission, as well as individual employees, so the goals resonate on an emotional and inspirational level. Keep an open dialogue on performance by using weekly 15/5 reports (15 min. to write; 5 min. to read) for feedback, weekly notes, and one-on-ones to review progress and achievements and work through obstacles. Take every opportunity to recognize achievements publicly and privately; this is every manager’s job, not just corporate People Ops.
4) Stay accountable with feedback.
Organizations that have strong accountability cultures generally produce stronger results than their counterparts. Most organizations use OKRs or KPIs to track progress against goals and their tactics. While this is a topic that requires some in-depth discussion, GTMHUB has a wealth of information on how to think about and make them work for your organization. Remember, feedback is not just for frontline employees: Accountability starts at the top by holding senior leaders to task for achieving their tactics and for doing it within the boundaries of your company’s cultural norms.
Once your business objectives are set for the next 12 months, the pressure is on. Now is the perfect time to set goals for everyone in your organization to share the workload and the success. The investment you make in getting goal-setting right will pay off this year and set you up to accelerate beyond 2022.