Sunday, December 18, 2011

Goal Setting

Over the past few months, my management team and I have been working on our 2012 Operating Plan. We are in the process of defining our goals, metrics, and budgets for 2012. This process, which we do every year, is always a combination of analysis, strategic thinking, constructive conflict, and some educated guesswork.

In the past, we have always set aggressive stretch goals with some margin in our budgets in case we do not meet these stretch goals. In those years where we have met or exceeded our stretch goals, our sense of accomplishment has been awesome. During other years, we have accomplished significant successes without meeting our stretch goals. For example, in 2011 we will accomplish revenue growth of around 27% but will not meet our aggressive stretch goal of 66% growth. Year-over-year growth of 27% is no small accomplishment. Unfortunately, by falling short we lose any sense of accomplishment because we achieved less than we thought possible.

This year we are using a different philosophy. We are setting more conservative goals and budgeting accordingly. We expect to meet these conservative goals no matter what. In fact, my management team believes that through proper leadership and execution, we will exceed our goals for 2012. The risk is that by setting more modest goals and budgeting more conservatively, these lower goals will become self-fulfilling or worse. By setting the bar too low, we risk being less aggressive and settling for less. On the other hand, we all believe that we will exceed our 2012 goals. And when we do so, the organization will have the satisfaction of a very successful year.

The lesson here is that goal setting is important. I do not profess to have a perfect formula for goal setting, and do not know if this new approach will work better or worse. I do know that a high-performing team wants to meet or exceed the goals that it sets for itself. Meeting or not meeting goals does make a difference in the morale of the organization. Our more achievable goals in 2012 will be an interesting experiment. I suspect that we may find that meeting or exceeding goals throughout the year actually builds momentum and increases our success by the end of the year.

No comments:

Post a Comment