How Having Goals in Business Helps You Retain Your Competitive Edge
It's well-near impossible to be a resounding success in business without proper planning.
The best way to do that is by actively setting realistic objectives based on what your enterprise needs to do to retain its keen competitive edge. Goal setting helps your company stay focused while increasing revenue, maximizing its chances of reaching its potential.
All types of businesses can hugely benefit from a solid goal creation methodology. Doing so allows an enterprise to be more planful, which helps accelerate its growth.
In this article, you’ll find a process you should consider following if you want to create objectives that energize your team and keep your organization on track.
Before setting business goals, consider doing a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. It will assist you in identifying areas where your company is doing well and where it can improve. This makes setting both long- and short-term business goals so much easier.
Not only will SWOT help you set goals, but it also gives you an objective way to look at your business. This makes it an excellent foundation for business plans.
This can be incredibly useful in the decision-making process. You can use a SWOT analysis for one area of your enterprise (for example, increasing sales), or you can use it to cover your entire business.
Start by dividing a large piece of paper into four sections. You’ll add one of the following categories to each section:
Strengths are what your business does well, including your Unique Selling Proposition (USP). This is the one thing your company does better than almost any other enterprise on the planet.
If you don’t know what your USP is, you’ll need to set aside some time so you can come up with one. A USP can have a strong positive impact on brand messaging and other marketing decisions as well as increasing profits.
Weaknesses are what needs fixing, such as what your organization struggles with, the knowledge and skills it’s lacking, and the advantages competitors have.
They also include those practices you probably should eliminate to boost operational efficiency.
Try to imagine how other people in your market see you. Do they notice weak spots that you’re blind to because of your lack of objectivity? Analyze why your competitors are doing better than you. What are you lacking?
Weaknesses may include things such as poor manufacturing expertise, an inability to adapt to fluctuating market conditions, poor customer service response times, and limited technical expertise.
These are the areas where your business has the potential to grow.
Consider the hot new trends you can leverage to your advantage or a service you can provide that fills a market gap.
Think of opportunities as pre-existing openings where something positive can happen if you capitalize on them. Being able to do so can make a big difference in your enterprise’s ability to compete in the marketplace.
The opportunities you grab hold of don’t need to be huge ones. Even tiny advantages have the power to level up your game.
Threats are the obstacles an enterprise faces when they’re trying to get their product to market.
These include increased regulatory requirements, competitors poaching your customer base, and a pricing strategy that’s no longer viable.
Threats like these have the potential to negatively impact your business. You'll be able to stay one step ahead if you can identify these dangers. Then, you can create goals that allow you to mitigate their impact.
The SMART Method
Completing a SWOT analysis shows you the parts of your business you need to strengthen.
Now, it’s time to create goals that focus your team based on these insights.
To do that, use the SMART (Specific, Measurable, Attainable, Realistic, and Timely) Method.
SMART goals help companies avoid vague, overly ambitious, and poorly constructed objectives.
Goals need to be specific, meaning they should describe exactly what you want to achieve and how you want to achieve it. That way, there’s zero ambiguity.
Creating ultra-specific goals allows you to move towards the accomplishment of your goals with a laser-sharp focus. The more clearly worded your goals are, the better you can track progress towards them.
If your company goals aren’t measurable, you’ll have a difficult time trying to figure out if you’re even making progress.
Peter Drucker once said, “You can’t improve what you don’t measure.”
Most measurable goals have numbers, percentages, or time frames built into them, allowing them to be tracked.
Your goals should be challenging while still being achievable. If they’re impossible to attain, you and your employees will end up feeling demoralized.
We all know managers that habitually set goals that aren’t achievable. The announcement of these objectives is often made in stereotypically dramatic fashion at a corporate event, inspiring droves of team members to commit to them.
However, this only leads to crushing disappointment when the goals inevitably aren’t attained, and wasted time that could have been spent for effectively.
Don’t be that manager!
Relevant goals mean there should be a real-world benefit your company will enjoy once it attains the objective. Goals should also dovetail with the overarching objectives of your vision and mission statements.
For example, if you're the proud owner of an app development company, you might have an objective to boost app usage.
Make sure you set a timeline for your goal’s completion. If there’s no time limit, it’s all too easy for enterprises to have a never-ending series of goals that never get achieved.
Set aside enough time, so it's realistic to achieve the goal, but not so much that your employees lose motivation.
Consider breaking up a larger long-term goal into smaller milestones.
SMART Goal Examples
Let’s say you own a house painting franchise. You could create the following SMART goal for your business:
“Increase the average job size on residential painting projects by 15% in the next six months by upselling at least one additional service.”
This is specific because it lists what you are trying to accomplish: “Increase the average job size on residential painting projects.”
It’s also measurable: “By 15%.”
It’s attainable: This SMART goal states exactly how you plan to reach it: “By upselling at least one additional service.”
It’s timely: “In the next six months” provides a specific yet reasonably end date for the goal.
Here are some other examples of SMART goals:
“Sell 25% more sports products valued over $150 this year by promoting our high-value product lines.”
“Increase the market share of my vegan grocery business by 15% within six months by running three Facebook ads a week.”
“Boost wedding dress sales by 5% in 2022 by allowing customers to make 10 credit card installment payments.”
Creating an Action Plan
Once you create your goals, you’ll need to figure out how to execute them.
Create a list of action steps for each objective and who's responsible for doing them. Following the SMART method, make sure you have a start and end date for each goal.
With a good action plan based on SMART goals, you can achieve your goal in the most efficient way possible while keeping your projects on schedule and within budget.
Barriers to Achieving Business Goals
While almost every organization sets goals, there aren’t that many that consistently achieve them. Here are some reasons why that happens:
Employees Don’t Understand Strategy
According to the Harvard Business Review, 95% of employees don’t understand their company’s organizational strategy. If most of your employees don’t comprehend it, they won’t get behind it.
When employees know and understand the strategic initiatives guiding a business, their engagement increases, and work becomes more meaningful. It also helps them accept change better because they can tie the changes back to the enterprise's strategic goals.
To help increase strategic understanding, minimize jargon by describing action plans in plain language. Frame strategic initiatives in broad strokes before getting into the weeds. Giving your employees the big picture first helps them grasp the details.
Business strategies will be more relevant to team members when you can make meaningful links between the jobs they do and the overall plan.
No Employee Buy-In
Employee buy-in is crucial to an enterprise’s ability to achieve its objectives.
Some managers mistakenly assume that once they define the goals, every employee will be instantly on board with whatever the company decides to do.
However, this is hardly ever true. To get your team members energized to accomplish corporate objectives, you’ll need to actively involve them in the goal-setting process. By doing so, they'll become invested in your leadership and the vision and values of your enterprise.
Let's say goals are set by C-suite executives who are hopelessly out of touch with the daily struggles of line staff. In that case, they're going to lack crucial information and the organization isn't likely to meet its haphazardly constructed objectives.
Group involvement is critical to formulating goals employees are excited about. Companies that enlist employees in the goal-setting process are also more profitable and enjoy lower turnover rates.
To ensure your employees participate, take their ideas seriously. Incorporate their suggestions as much as possible, and explain why you can’t implement some ideas just yet.
Refrain from ridiculing ideas you might think are a little off the wall. Out-of-the-box ideas have the power to set your company apart from competitors.
No Follow Through
Goals are meaningless if there is no follow through.
It doesn’t matter whether you’re learning to swing a baseball bat or reducing production expenses by 3% over the next five years. Whatever activity you undertake, and whether you’re a small business or a corporate behemoth, follow-through is of the utmost importance.
Goal-setting is not merely an academic exercise. Set aside some time each day to monitor goal progress, so you stay on track.
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