The correct setting of a goal is of utmost importance and often overlooked in the planning process. Usually, a goal is set by the policy-making group, often dominated by owners in a small to medium-sized business (SMB). There is nothing more demoralizing to all business groups than a bad goal. The group that would execute the actions to reach the goal will immediately recognize the reality gap and ignore the goal. The group implementing the actions to be taken to reach the goal will be frustrated. The policy-making group will be disappointed that the values leading to the setting of the goal will not be honored. More importantly, a bad goal creates communication gaps between the groups that can stop the planning process, which otherwise could function to meet a reasonable goal.
Said another way, a bad goal is a goal that is unrealistic. It might be so easy to meet that it ceases to perform the function of a goal. It might be so difficult to meet that the goal will be disregarded. From the perspective of a business owner, a goal should address a value related to the business, and from the perspective of those who act to meet the goal, those actions should make sense to their values regarding the business.
The concept of the SMART (Specific, Measurable, Achievable, Relevant, and Timely) goal is well known. The goal must be specific – it is not enough to say “we want to do better” or “we want to sell more.” The goal must be stated in such a way that the effort to reach the goal can be measured. The goal should be achievable and meaningful to the values of the company. The goal should come at a time when it is the logical next achievement. An effective goal must not only speak to those who create the goal, the goal also must speak to those who would carry out the actions to meet the goal.
While it would seem that goals should be set to be met and then raised, it will not be that simple. We are familiar with the allegory of a manager of a business being promoted until the manager reaches a level of incompetence. (Peter and Hull, The Peter Principle). A corollary to that is the goal that is continually raised until it cannot be reached. If a goal is simply raised without the process of evaluating it against the then existing values for the business in all business groups involved, the result will be a bad goal.
The static setting of goals can also lead to problems. In the planning cycle, values are articulated, goals are set, actions are determined to meet the goals, once actions are taken they are monitored for effectiveness, and the progress toward the goal is evaluated. If too much time is spent between the last two stages in the planning cycle, the momentum is taken out of the planning process. This is what happens in a business without dynamic planning.
Dynamic planning is the use of a planning format allowing communication of the revision of goals as the metrics of performance are received. No stages of the planning cycle are eliminated, but the communication of decisions is done through the planning format so that all groups involved receive knowledge of the decisions as they are made. A simple example of a dynamic plan format is a spreadsheet showing goals, actions taken, metrics of the actions, and revisions that are shared with all groups on a continuing basis. The aggregation of information from all groups in the business fosters a more realistic and effective decision-making process in all stages of the planning cycle.
Often the setting of a bad goal is diagnostic of the entire planning process of an SMB. The cure is not to deal with the symptom by setting another goal but to examine the planning process. Is there an articulation of values with respect to the business in the policy-making group? Is there a dynamic plan format providing information to all groups in the business? Is this a SMART goal? Avoid the setting of wrong goals by working on the planning process.