Why Business Goals are Important

Jack Shonkwiler November 16, 2017

Every organizational management book stresses the importance of goal-setting. But, goals are worthless without understanding why they work and what you can achieve with them! 

Before you dive in and start selecting yours, let’s talk about the benefits that any business will secure with the right effort towards their goals. First, it’s important to note that goal-setting is an integral part of every successful organization, and these goals are found across all levels of their business. Starting at the top, organizational goals work to define the strategies that are important in every layer of a company’s structure. Executives and management define and champion the strategies and goals themselves. Team goals are used to help influence the processes employed within those teams. And then there are individual goals which help to define workdays and dictate areas of focus.

Now, let’s talk about why these best-in-class businesses put so much emphasis on mastering their goals...

 

Business Goals help to create alignment

 

Goals are critical for creating and facilitating alignment within an organization. When you set them from the top-down, you’ll ensure that all departments and teams within them are working towards a singular outcome. To make this happen, the structure of individual and team goals should all support your company-wide strategy… even if the makeup of those individual and team goals differ. 

For example, let’s say that BrightGauge has an organizational goal of $10,000 Net New MRR each month. In order to make that happen, we would need to select team goals that help drive our progress towards that $10,000 Net New MRR. Let’s take a look at what goals would look like across our Marketing, Sales, and Customer Success teams:\

As we all know, MRR doesn’t just build and build without having a customer slip through the cracks every so often. This element we all know, and try our best to avoid, is churn. That’s where our Customer Success team goal comes in - let’s say in this example that their goal is to keep churn at 5 accounts or fewer each month.

Then looking at the Sales team, we would calculate how many new accounts they need to close for the month. For simple calculation purposes, let’s say they need 10 new accounts at $1,000 MRR each to reach that $10,000 Net New MRR goal. But we also can’t forget that there’s a possibility of up to 5 accounts that will churn - so in order to be completely safe, the Sales team needs to close 15 new accounts.

At the same time, the Marketing team would need to focus on the number of demo requests that must be driven to the Sales team in order to close these 15 transactions. Let’s say in this case that Sales closes 50% of the demos and upgrades sent their way (again, we’re keeping it simple for calculation purposes)… so in order for the Sales team to close 15 new accounts, Marketing must send them 30 demo requests.

No matter what your organizational goals are, once you’re able to get all of the moving parts within your business aligned and working towards the same big-picture target, you’ll find that your business will thrive!

 

Business Goals help to create focus

 

In order for almost any organization to reach lofty targets there has to be laser-like focus at all levels of the business. Goals will help you to clarify that focus, and define what it is that you are truly after. In fact, by outlining both your process goals and outcome goals (we’ll cover these in detail later in this post), you’ll ensure that your company is headed in the right direction, and focused on the steps that will get you to your desired results. 

It’s also important to note here that goals provide task direction. During downtime when your team is looking for an action to take, task-oriented goals provide a blueprint for meaningful action. Across dozens or hundreds of employees, this targeted focus has a compound effect that drives organizations forward.

 

Business Goals help to facilitate accountability

 

Having goals in place is not enough to ensure success. A certain level of accountability needs to be maintained to ensure that goals are being hit and that new goals are being created to replace them. That’s why you must have a cadence for checking in with individuals and teams - it’s a vital part of keeping the motivation flowing across your company. Because let’s face it, we all perform at an increased level when we have people that we respect holding us to a higher standard! 

By encouraging accountability within your organization, your chances of success in completing small process goals and larger outcome goals are improved. Additionally, the accountability factor that’s tied to cadence is a two-way street: it highlights success and also sheds light on failures.

 

The difference between outcome and process goals

 

In most organizations, goals can be broken down into two categories — process goals and outcome goals. If you aren’t sure of the difference, here is an easy way to remember them:

  • Outcome Goals - What you want to achieve
  • Process Goals - The steps or actions you must take to help you attain the outcome goal

 

process-v-outcome-goals.png

 

If you’ve read Traction or are familiar with EOS (Entrepreneurial Operating System) Worldwide, then think of your scorecard as your process goals. Your company priorities, or outcome goals, are what they refer to as rocks - these are must-have goals that are destined to get completed anyway, due to their importance. Rocks may be company-wide or individual goals. Their scope isn’t what defines them, their importance is.

For instance, let’s say you have a goal of obtaining 10 more paying clients in a given month. This is a perfect example of an outcome goal. However, landing those clients is outside of your control because whether or not you are able to sign those clients depends upon a myriad of other factors that include competition, scheduling issues, and yes — even a bit of luck.

That isn’t to say that you shouldn’t set an outcome goal for yourself. They are, after all, the end desire that you want to achieve. However, it’s better to set goals that aren’t dependent upon forces that are outside of your control. This is where process goals come into play.

Process goals are the smaller, step-oriented goals that help you to build toward your big picture aspirations. These are goals that are completely within your control and as a result, they should be actionable and clearly defined. Your goalpost for success should be clear.

Using our previous example to sign 10 new clients in a month, your process goal might be to call 20 people per day from your prospect list. This smaller, action-oriented goal is the driving force behind landing those clients because if you’re able to hit your daily goal, then you’re actively pushing towards meeting your larger outcome goal for the month. If you’re not able to land those 10 new clients, you should go back and decide how to alter your process and what your new daily goal should be.

It’s important to remember that one type of goal isn’t better or more important than the other. Process goals and outcome goals work together. Stress the importance of pairing the two in order to instill commitment and focus among your teams.

 

Choosing between outcome and process goals

 

Having an understanding of when to use outcome or process goals is the critical first step towards actually achieving them. 

Every company has an outcome goal in mind: it’s what they’re striving for. Once you have your outcome goal dialed in, start by breaking it down. What are the actual steps that will need to be taken in order for you to achieve that outcome goal? Don’t worry too much about complete accuracy at this point, as the process goals can be changed later when you have some data to work with. 

Once you’ve broken down your outcome goal into all of the individual steps that you will need to take to achieve success, you can begin crafting and assigning those tasks to the appropriate teams and individuals that will complete them.

Using our previous example of closing 10 new clients, there are many tasks that you may need to tackle, in order to accomplish this outcome goal. Your process goals may include:

  • Making sales calls to prospects
  • Ensuring that your prospect database stays refreshed with new contacts
  • Putting together proposals for interested prospects
  • Researching and understanding their business
  • Drafting a suitable contract for your partnership

Once you have outlined the processes required to reach your outcome goal, you can then break them down into more specific tasks. For example, “making sales calls to prospects” would become “make 25 sales calls to prospects each day.” This helps to draw a firm line between success and failure and provides a measurable goal for whoever ultimately is assigned the task.

 

How to monitor and manage your goals

 

Both process and outcome goals need to be tracked and evaluated weekly. Perhaps your initial goal of 25 sales calls per day turns out to be a little bit ambitious, and 15 turns out to be more reasonable. Or, maybe your sales team is capable of making more calls than originally expected. You could find that your entire outcome goal of signing 10 new clients that month is too lofty and needs to be altered.

Goals can be changed, the important thing is to make sure that you are constantly evaluating your efforts to reach them and tracking your success!

BrightGauge Summary Emails provide a summary from the previous week’s check-ins to track your business goals.

 

Process & outcome goal examples for IT Services Providers

Ready to take a look at some real-life examples of process and outcome goals for ITSPs? 

 

brightgauge-goals-inspiration-image.png

  

Let’s say that a company had recently signed up with BrightGauge, and now had the task of implementing the platform into their daily processes. What might the outcome goal be? What would be some related process goals that lead them toward reaching that outcome?

The scenario would look like this:

  • Outcome Goal: Implement BrightGauge Software
  • Process Goal: Create 3 new gauges a week for your teammates
  • Process Goal: Create 1 new dashboard or report a week

 

In this example, the outcome goal is to execute on the new solution and get it running in their daily operations. There’s no way for a project of this size to happen in a matter of one or two days. Instead, the company would need to focus on the smaller tasks of creating gauges and dashboards, and slowly introduce BrightGauge across all their departments and teams. Then as more gauges, dashboards, and reports are implemented over time, the organization will have enough BrightGauge presence that the change will happen naturally.

 

Let’s take a look at another ITSP scenario: 

  • Outcome Goal: Improve Customer Satisfaction by 5%
  • Process Goal: Meet with 3 “noisy” end users per week
  • Process Goal: Respond within 15 minutes to all tickets each week

 

In this example, the outcome goal is to improve CSAT by 5 percent. It’s a goal that is shared by nearly any service business. But how do you break a goal like that down into smaller, attainable steps? What processes drive an improved customer satisfaction score?

One low-hanging fruit for improving customer satisfaction is to meet with, listen to, and create plans for dissatisfied customers, represented in the first process goal in the example. By identifying and meeting with a customer that seems to consistently have issues with the service being provided, you can better understand why they may feel dissatisfied and help create a solution to the problem.

Additionally, we all know that CSAT scores can be negatively affected by slow response time, so making it a priority to respond to all tickets quickly is a great way to improve in this area. By adding an actionable element with the 15-minute response time goal, this makes it easy to track and evaluate their progress.

These examples illustrate how larger outcome goals can be broken down into manageable, actionable process goals that ultimately lead you to where you want to go. However, implementing these goals into your processes and workflows is another step that must be taken before goals can be achieved.

 

How to implement business goals

 

Now that you’ve outlined your outcome and accompanying process goals, it’s time to roll them out to the company. Most people will probably find that this is easier said than done! 

Often, a new goal (particularly process goals) means changes to the processes and tasks that your teams have grown used to. Generally speaking, any time an integral part of your daily processes is changed, you can expect it to take some time to take hold.

When implementing outcome and process goals, there are a few things that you should keep in mind:

Set business goals first

Large outcome goals have to start from the top-down. Once you’ve decided on your goals, try to consider how reaching these goals will affect all aspects of your operation. Use your management or leadership team as a testing ground for these changes. Ask for feedback. Consider what internal processes will need to change. Make certain that you have examined the goal in full before you roll it out to your teams!

 

create-a-goal-brightgauge-goals

 

 

Start with quarterly goals, adjust as needed

Quarterly goals are a great place to start with outcome and process goals. They are ideal because they aren’t a long-term commitment. Soon enough the quarter will be over and you can make the changes required to either maintain or reach a more favorable outcome the next time around.

The length of the goal is not set in stone, either. Quarterly goals are recommended by goal-setting gurus like EOS and Verne Harnish but that doesn’t mean that they are for everyone. Don’t be afraid to make adjustments to find time periods that match the flow of your organization, adjusting future goals as necessary. Some prefer shorter time periods, such as six-week goals.

Setting goals is an important part of pushing your company, teams, and individual employees to strive for more and continuously improve. But, it can be easy to lose sight of what you are truly trying to achieve when you are chasing goals. Instead of setting nondescript goals — break them down into outcome and process goals that are actionable, attainable, and useful.

 

New Call-to-action

 

 

 

 

Best Practices