Entrepreneurs are always eager to try new things to achieve success in their business. They experiment with different methods, philosophies, and technologies, hoping to find something that will accelerate their growth or boost their visibility.
But there is one fundamental area that is often overlooked: goal-setting.
Our goals don’t only exist in the future. They shape our work, influence our decisions, and serve as a source of daily motivation.
Those who live and work by goals will know just how powerful they can be. Sometimes, the simple act of speaking a goal aloud is enough to make it happen, because goals inform our actions. And, in fact, a famous study by a psychology professor at the Dominican University of California, Dr Gail Matthews, found that people were 42% more likely to achieve their goals and dreams simply by writing them down.
It flies in the face of advocates for a ‘see how things go’ approach, as well as JRR Tolkien’s famous line in The Fellowship of the Ring: “Not all those who wander are lost”. While flying by the seat of your pants can be great for vacations (and hobbits), it’s an attitude to avoid when growing a successful business—as we shall learn!
A summary of decades of research found that in 90% of the studies, specific and challenging goals led to higher performance than "do your best" goals or no goals at all.
While there are different methods to try (and we’ll be running through them in this guide), there is a solid set of tried-and-tested rules that can be applied.
Read on for more...
What do our goals say about us?
“Setting goals is the first step in turning the invisible into the visible.” — Tony Robbins
One of the most enduring definitions of goal-setting for individuals is the 2x2 achievement framework that was developed following extensive research by Eliot and McGregor in 2001.
They proposed that individuals can fall into different goal-setting profiles that shape their approach to setting targets and motivating themselves to work. You might recognize yourself in some of these!
- Mastery approach: This profile describes individuals who are driven by a desire to enhance their knowledge and skills in a particular area. They seek improvement for the sake of personal growth and the benefits it brings.
- Mastery-avoidance: In this profile, individuals set goals to avoid feeling like a failure. They may adopt a mindset of "just doing enough" to meet their goals, rather than striving for excellence.
- Performance approach: Individuals with this profile set goals based on outperforming others. They have a competitive drive and aim to be better than their peers or competitors.
- Performance-avoidance: This profile involves individuals who strive to avoid being perceived as failures. They may shy away from challenges and hesitate to admit when they don't understand something.
It can be really beneficial to pause and reflect on these.
It is a great thing to have personal life goals and big ambitions, but effective goal planning comes from understanding what our measures of success are, the ways that we work, and what we’re driven by.
Once we understand ourselves better, then we can set appropriate and effective goals that motivate us.
What does the data say?
Here is a collection of some of the best research on the impact and importance of effective goal-setting on all kinds of activities:
When tasked to save on energy consumption, individuals who set challenging but attainable targets were more likely to succeed than individuals committing to easier targets, who were more likely not to change their energy consumption at all.
Goal-setting is a particularly effective way to change behaviors and goals become more effective when they are (A) difficult, (B) set publicly, or (C) set as a group goal.
Making a plan to accomplish something and noting it down makes you more likely to accomplish that task than not doing so.
A review of dozens of studies found that reckless and poor goal-setting can lead to distorted risk preferences, a rise in unethical behavior, inhibited learning, corrosion of organizational culture, and reduced intrinsic motivation.
Set the right goals
“To the person who does not know where he wants to go, there is no favorable wind.” — Seneca
The data above suggests that there is, indeed, a right and a wrong way to set goals.
It's important to avoid setting goals that are too easy, as they may not challenge us enough to grow. On the other hand, setting goals that are completely unattainable can lead to frustration and demotivation.
To navigate this balance, a highly effective method is the S.M.A.R.T. goals approach. As we've discussed previously at the Achievement Institute, S.M.A.R.T. stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
Here's a quick recap:
- Specific: Your goals need to be clear and well-defined. Instead of goals like “I want more money” or “I want more customers”, you should go a step further: “I want to increase our annual turnover by $100,000 within three years” or “I want to have 20 new customers by the end of the fourth quarter”.
- Measurable: How will you track the progress of your goals? New customers per month? Unique site visitors? Customer loyalty? Whether it’s dollars, or your number of users, customers, or employees. Make sure you have concrete criteria to measure your progress and determine when you have achieved your goal.
- Achievable: Set goals that are realistic and within your reach. Consider your resources, skills, and limitations. Are there any factors outside of your control that could stop you from reaching your goal?
- Relevant: Does your goal reflect your hopes and how you view success? For example, do you really want to lead a large business, or would you be happier keeping it small and agile so you can focus on the work you actually enjoy? By making sure your goal is relevant to your measure of success, it will always be worth the energy and resources you invest.
- Timely: Make sure your time frame to deliver on this goal is realistic by asking yourself why you think is doable. On the other hand, it is important not to set a deadline that is too far into the future. If the time frame feels distant and disconnected from the present, it may lack the sense of urgency needed to drive action.
Use S.M.A.R.T. to stress-test your goals, and tweak them if needs be.
"The power of goal setting never ceases to amaze me. Sometimes it seems as though if you simply visualize where you want to be, the stars align. In reality, there's a whole team of us pulling together to make these things happen, but knowing what you're working towards is incredibly motivating. Without goals, there is a risk of coasting.
"It seems to be that once the vision has been spoken and visualized, as long as awareness is maintained things start moving in that direction – sometimes not straight away and sometimes not in an obvious way but so many times I've realized that we've achieved the things we set out to because of a goal set way back in the distant past.
“Sometimes I get frustrated at lack of progress towards goals but I've learned to relax a little because more often than not we end up moving towards them regardless of whether we know we are!"
- Barnaby Lashbrooke, CEO and founder of Time etc
Balance long- and short-term goals
“Success is the progressive realization of a worthy goal.” — Earl Nightingale
In my book, The Hard Work Myth, I share my own process that I devised for setting long-term goals, as well as setting realistic, achievable targets for the short term.
I call these 'BIG' goals and 'NOW' goals.
The BIG goal represents your strategic vision, your long-term ambition. It could be something like growing your small business up to $3 million in revenue. This goal serves as a constant reminder of the direction you want to move in and the distance you have yet to cover. It can also help business owners justify investments in people and systems, as they align with the larger vision.
However, what a BIG goal doesn’t do is show you how you’re going to get there. That’s where the NOW goal fits in. It's a goal you can hit in the next few months, like ramping up marketing with a bold social media campaign, doubling the sales team, or snagging five new clients.
The only rule is that this goal must directly contribute to achieving your BIG goal, and it must be quantifiable with measurable goals, such as a revenue figure, an increase in customers, or a sales target, that can function as a clear marker of success.
How often do you set daily or weekly goals, without ever really considering your long-term future? Striking a balance between the attainable and the ambitious is a hard line to walk, but it can stop distant goals from becoming de-motivating.
It can be helpful to set a calendar reminder to revisit your BIG goals every month or quarter to make sure your long-term objective stays present and relevant.
Get others involved
"Coming together is a beginning. Keeping together is progress. Working together is success." — Henry Ford
Perhaps the most overlooked ingredient for creating motivating and achievable goals is the value of communicating with others and setting effective group objectives.
Successful small business owners answer to no one, that is part of the appeal, but that doesn’t mean you should try to go it alone in all aspects of your work.
When you incorporate others into your plans and let them know what you are working towards, you create a sense of accountability that can keep you focused and motivated.
People have a 65% chance of meeting a goal after committing to another person. Their chances of success increase to 95% when they build in ongoing meetings with people who check in on their progress.
Putting your goals into words has a few valuable benefits. If you speak your aims out loud, they’ll suddenly seem more real and you’ll be better able to judge whether they’re achievable.
Your friends and colleagues may also offer feedback, and highlight possible hurdles you might not have considered.
If you have employees, sharing your business goals with your team is a no-brainer—everyone will be motivated and directed by a common goal.
And lastly, sharing your vision means you have a support network to check in and hold you accountable for your goals.
Some companies write their business goals on the wall and revisit them daily, weekly, or monthly. It’s a process called ‘vision boarding’.
Now you have your goals… what next?
Now it’s time to swap working harder for working on the right stuff. You need to start being picky about the tasks you take on. It’s very easy to jump straight in and start doing, rather than taking the time to pause and think “Should I really be working on this?”. But your time and energy are finite.
Start by writing a mini job description that lays out the types of tasks that will directly help you achieve your NOW goals and your BIG goals. Everything else should be treated as a potential distraction.
Every time a new task demands your attention, work out whether it’s a task or a distraction by asking yourself these three questions:
- Would doing this task directly help me reach my goals?
- Does this task fit with my list of tasks to focus on?
- Will something bad happen if I don’t do it?
What's the bottom line?
The fact is, there is more to setting goals than just ‘setting goals’. Striking a balance is key.
Your goals should be challenging enough to push you forward, but also live within the realm of possibility. While it's great to have ambitious long-term aspirations, it's equally important to set achievable short-term goals that keep you motivated and making progress along the way.
Also, goals should be personal. Nobody else can define success for you (except maybe investors!). We all start our entrepreneurial ventures for different reasons, and what business success looks like is unique to each of us. It's a personal journey, and your goals should reflect that.
Maybe you started your own business to make more money, or perhaps you took the leap to earn a little less but enjoy a more relaxed work-life balance. Your aim could be fast growth and a quick exit, or maybe you're building a steady business that lasts for decades. While the goals may be different, the philosophy and mindset behind goal-setting won’t change.
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