Goals can be powerful motivators. They can serve as a target for focusing efforts or as a rallying point for directing the collaborative energy of a team.
Goals can also demoralize and demotivate. They can loom large as a symbol of inevitable failure or as tangible evidence of past inadequacy.
The key is to set the right goals, at the right time. The world is full of goal setting frameworks and metrics, and I have no intention of adding another. Rather, I want to introduce a concept or framing that can be used in conjunction with a given system as it is adapted and applied. Specifically, I’ll be talking about commercial growth goals (and not touching on product development goals).
It’s really quite simple: set growth goals that are ambitious enough to motivate while being realistically achievable for your team or organization. Finding that balance is easier said than done. I’ve laid out some road markers here on the longer, shorter way towards implementing this approach to commercial goal setting at a growing company.
The problem with setting overly ambitious goals
Setting goals that are not particularly ambitious is basically just making a to-do list. If you are looking for strategies to hold yourself or your team accountable, there are better ways than listing out tasks and calling them goals.
When we make goals that are ambitious, it can bring out the best in ourselves and our teams as we strive to meet them. We are empowered to learn and adapt to achieve a goal that seems beyond the reach of our current abilities. Reaching towards those goals inspires us to think creatively and to innovate, catalyzing our own personal growth as we work to grow a business.
For leaders, there is often a strong temptation to set goals that are too far beyond our reach. We may feel like we need to meet certain metrics or achieve some milestones to continue to grow or to attract venture financing. There can be almost a cathartic effect for a leader in naming a far-off milestone as an immediate goal; setting the goal is something we can control and can point to, giving a false sense that we are close to the desired outcome.
For teams, having goals that are too far beyond what they can achieve can cause frustration and disappointment. Knowing that they could make substantial progress - but feeling like it would not be enough progress to meet the goal - can make teams want to give up or not even try. When compared against an unrealistic standard, all the good work that could be done can seem futile or inconsequential.
When a team is consistently given unrealistic goals and targets this can start to create a self-fulfilling prophecy of failure. When charts showing targets versus actuals always have a wide gap between them and project status updates are always red or yellow, it can sustain a narrative of consistent failure that then becomes an excuse for underperformance of even reasonable goals.
People frequently become who or what other people tell them that they are. Being faced again and again with the idea that what you’ve done isn’t enough – because it falls short of a goal - is a cycle that is easy to fall into, hard to break out of, and can sap spirit. For companies looking to accomplish big and bold breakthroughs, it is usually better to build up an identity among your team of capable doers with a history of sustained achievement. The way to do that is by setting realistically ambitious goals.
Grounding ambitious goals in reality
How can we find that balance between a growth goal being ambitious enough to motivate without it being unachievable? What is the method for determining what is “realistic” for yourself, your team, or your company given your present situation?
My wife’s favorite activity: planning.
“A goal without a plan is just a wish.” - Antoine de Saint-Exupery
The way to measure whether a goal is realistic is by employing a simple thought-exercise. Ask yourself: “what would it take to achieve this goal?” I'm not advocating for only setting goals that are the capstone of a detailed step-by-step plan. That can stifle creativity and make you overcorrect towards goals that aren’t ambitious enough. For leaders working to set goals together with their teams, it can also be perceived as micromanaging.
What I’m proposing is that when we consider a lofty goal, we spend some time brainstorming a few potential avenues to how one might achieve it. Again, these don’t need to be overly in the weeds. The act of thinking through resource requirements helps anchor the conversation in the reality of the organization making the goal.
The questions that will arise from this exercise might lead to the formation of sub-goals that are milestones on the path towards the bigger goal. For example, we might ask “do we have enough bandwidth with our current team to accomplish this?” If the answer is no, then we might have a goal around hiring the required people.
It is essential that a goal be contextualized in terms of the organization that is looking to achieve it. One way to do that is to look at past performance. If a team has a baseline to compare to, then it creates a frame of reference to evaluate a cutoff point where a given goal might be too audacious. When you dig into “how did we do what we’ve done so far” it tends to lead to “what would we do differently if we wanted to 2x this” or “is it even possible to do X within Y timeframe,” etc.
Let's look at an example:
Say you’re looking to set a revenue target as you transition from founder-led sales to your first two or three sales hires. If the founder was able to close $1M in revenue in the past year, you might be tempted to set the goal at $3M now that you have 3 people. Easy, right? Not really.
When you further examine how that $1M was achieved, you might find that the founder was friendly with a few early clients, a fund-raising press release drove a swell of initial interest, or that some of that revenue might have been from unscalable service offerings that the new salespeople won’t even be promoting. You might also consider that prospects tend to like buying from founders more than salespeople. Quickly, you’ll see that $3M might be unrealistic.
In going through this, you’ll likely identify where you may need to re-evaluate certain assumptions to set a plausible goal. You can evaluate how likely certain factors are to change, and how addressable certain obstacles might be, and in what timeframe. In the above example, maybe you budget for a PR firm or allocate 25-50% of the founders’ time to help build the funnel or close deals to make the goal a more realistic projection.
Even if you do a perfunctory or cursory run through this exercise, it will help calibrate your goals and/or the resources you make available to teams to achieve them.
Creating a culture of sustained achievement
The biggest benefit that I see to setting realistically ambitious goals is the motivating factor that comes from their cyclical and self-reinforcing nature. When a goal is set right and brings out the best in a team or person to hit the target, the sense of accomplishment and success grows confidence. It starts to build a habit of setting ambitious goals and achieving them, which then becomes the culture for a team.
Teams that hit their goals share in wins and are excited to meet the next challenge. Past wins and repeated success stories put people in a headspace where they are more likely to have a more positive self-image, to think that they can rise to meet challenges, and to be open to believing in a company’s ability to achieve a bigger-picture mission that might otherwise seem too far off to be attainable.
You don’t always need to actually meet a realistically ambitious goal to have these benefits. When leadership sets a goal that strikes the right balance between being challenging and doable, they are also communicating to their team that they trust them to do their best. A realistically ambitious goal, tailored to the actual team working to achieve it, is worth playing for because it’s a fair game. With the right mix of skill and chance, a safe environment is created to give it your all, even if you might ‘lose.’ (This is also true of raising children; as I’ve been reading up on the subject with the recent birth of my son, the experts repeatedly emphasize the importance of providing clear expectations and then giving kids the space and trust to learn how to meet them).
Leadership’s response (both in tone and messaging) to missed goals is a key aspect of defining company culture. The platitudes and cliches on a website about a company’s values of transparency or curiosity or psychological safety mean very little if they aren’t modeled by leaders in these situations. If the goals are realistically ambitious to begin with, everyone is already primed to reflect, learn and adapt moving forward. When there is a mutual understanding between leaders and their teams of the realistic nature of the targets being set from the outset, there is no blaming of the unfairness of the goal as an excuse.
If a team gets really close to a goal but doesn’t meet it, everyone knows the goal was ambitious to begin with and can feel good about the effort while resolving to work harder or smarter next time. In the case of total failure to meet a goal, it could very well be an indicator of performance or management issues. Since the goal was set with clearly defined underlying assumptions, these can be reevaluated to examine whether there are certain skills that need further training, people that need more coaching, or if some factors outside of anyone’s control were at play. In either case, there is a framework in place for leadership to tailor the messaging around the missed goal that keeps the discussion collaborative and objective.
Frameworks that set goals with an expectation they won’t be fully met
One challenge I sometimes hear about the concept of realistically ambitious goals is that the popular OKR (objectives and key results) framework has the best of both worlds in that success is defined at meeting around ~70% of a goal. This system is popular because it can motivate teams with very ambitious goals while also creating the safety of acknowledging that actually hitting that goal isn’t expected.
This system can work well, if used correctly. The key to doing so is to not equate OKRs with individual performance metrics or metrics tied to an individual or team’s compensation. If the only way to make 100% of a target bonus or to reach full OTE (on target earnings) is to hit a goal that is recognized as being a long shot, it can quickly demotivate and frustrate a team.
Where I’ve seen the OKR system work best is with leaders who consistently emphasize that these goals are not expectations. If a leader repeatedly reminds the team that the OKR is there to push them to strive for it but that 70% is truly a successful outcome, this can alleviate some of the issues I've raised with overly ambitious goals. This just takes discipline and intentional messaging from a leader committed to this system.
I’d argue that the process of setting metric-based goals as the goals themselves is more intuitive; people see a number and know that their objective is to reach 100% of it. This also requires less diligence in maintaining the psychological safety of the team, so long as the goals themselves are realistic.
More goals vs. fewer
A related concern on this topic is the optimal number of goals for a company, team, or individual. I do not have a magic number or formula. I simply encourage leaders to ensure that the number of goals is realistic in the same way that I encourage them to evaluate the goals themselves.
While a given goal may be realistically ambitious if a person or team were to devote most of their time and energy to it, that may not be the case when they have two or three such goals. For each team or individual contributor, their bandwidth and focus-energy need to be taken into account when determining what is realistically achievable. Caring for this as part of the goal setting process is an investment in avoiding burnout and the high costs of turnover and attrition.
Another thing to consider when setting growth goals is what is sometimes called “counter metrics.” If your growth goal is to onboard ten more clients next quarter, you may want to think about also establishing the expectation that client experience or satisfaction will not decline as a result of achieving your goal. Setting that metric to counter the potential negative consequences of such rapid growth will then force you to evaluate if you are equipped to meet that goal (e.g., is your client success team sufficiently staffed?). It all comes back to questioning and exploring what it might look like to meet a goal.
There is something to be said for the simplicity of having fewer goals in terms of creating focus and cohesion. Limiting oneself to fewer goals may require tough prioritization and trade-offs, which is generally a good practice for leaders. That being said, I’ve seen robust systems of interdependent goals run by six sigma black belt project managers that can work. Of course, in that situation, the appropriate resource has already been allocated to make such an ambitious goal-setting endeavor realistic.
Who should set the goals?
Another question I hear from founders and leaders around goal setting is whether goals should be set by leadership or by the teams themselves. There is an argument to be made that teams know their own capabilities best and, if leadership makes the broader company goals clear, they should be empowered to align their own goals with that broader direction.
The ideal process for goal setting is really company dependent as a function of their unique people and culture. I’ve seen processes where leadership sets goals and teams give feedback, where teams create goals and leadership gives feedback, and hybrid models. Either can work, depending on the style of the particular leader and the type of people they tend to hire.
The most important thing is just to have a consistent process, and to incorporate the exercise around evaluating whether goals are realistic. Whether the goals are reviewed by leadership or by teams doesn’t really matter, so long as both are involved in the discussion and the focus of the feedback and review process is on: transparently laying out assumptions and analyses baked into goals, evaluating resource requirements, considering counter metrics, and making trade-offs with competing priorities.
Accounting for external pressures when goal setting
The last, and sometimes strongest, challenge that I hear from founders when proposing this thought exercise is that they are under pressure to meet certain milestones from their investors.
I discuss this topic in detail in a separate post on stable and sustainable growth. In short, and specific to goal setting, the process of establishing realistically ambitious goals creates a forum for discussion with your investors on more actionable terms. By anchoring into what’s realistically possible, you can invite your investors to collaborate in the process and to evaluate your underlying assumptions and thinking.
If your investors have reasons to believe that it is realistic for your team to achieve more, then bringing them into this conversation allows you to get specific feedback on your thinking and identify any ways in which they or their network could be helpful. The emphasis on “how do we achieve this” simply moves the discussion from the general need to meet a milestone to particular tactics and strategies to do so.
The Tiferet Approach
The Tiferet approach is to identify a broad, encompassing context when developing a growth strategy. Goals are a powerful instrument of this approach. The process of setting realistically ambitious goals requires us to ask questions and consider the entire situation before committing to a plan.
Making trade-offs and choices to ground ambitious goals in reality requires that there is a bigger-picture narrative that can inform how to make those tough decisions. Then, the goals themselves serve as a reminder of that big picture perspective for individuals and teams to align their efforts to the broader mission of the organization as a whole.