It is annual planning season (and Q1 planning season) for many business owners, which means it’s time to identify the overriding goals for your business over the next 12 months (and then to break those annual goals down into smaller chunks that can be accomplished in the next 3 months).
Since the three most important measures of business success are profitability (is your business making money?), impact (how is your business making a positive difference in the world?), and enjoyment (are you actually enjoying the process of running your business?), I help business owners create goals in each of these areas. (You can download some helpful tools at the end of this article.)
Profit goals are generally easiest to set. Money is tangible and easy to measure. You set a goal for top-line revenue, subtract your estimated expenses, and that’s your profit goal for the period.
Impact goals can be trickier to set at first, but generally they become easier with practice. Essentially, these are the non-financial goals of the business.
Start by looking to the purpose of your business. That will offer clues as to (or might even explicitly lay out) the impact your business intends to make in the world.
If your purpose involves making the lives of your customers better, then your impact goals should relate to either how many customers’ lives you’re improving, or how much you are improving them—or both.
Same for employees. If your business’ purpose involves being a fantastic place to work and build a career, then set impact goals around that.
Maybe your business wants to make your community a better place by donating goods, or money, or volunteer hours. Or perhaps your business is intent on making the world greener, or safer, or more peaceful, or something else. If so, set some impact goals around this.
In each of the above examples, it’s vital to make the goals specific and measurable, meaning that there is no grey area as to whether or not the goal is or is not achieved at the end of the period.
Did you help 100 new customers or not? Did you reduce energy consumption by 20% or not? Did your employees do 500 volunteer hours or not?
Goal achievement should always be binary. If your goals are specific and measurable, then when you assess whether or not you achieved the goals at the end of the period, there is no “sort of”, or “a little”, or “mostly”. You either did or you didn’t.
Setting enjoyment goals can also be tricky because it’s difficult to measure joy. But you CAN measure things that you know produce joy.
For example, if you love going to conferences or taking professional development courses, but you rarely find time for them because there is always so much else to do, then set a goal to attend X amount of conferences or training courses in the next year.
If you find you love everything about your business except how much time it takes away from your family (or nurturing other relationships), then you could set a goal to delegate specific tasks to others, to free up X amount of hours per week – and then be sure to allocate that extra, freed up time to family time or relationships.
Another way to look at setting enjoyment goals is to look at what frustrates you in running your business. For example, if you find that meetings don’t start on time, or that there’s too much paperwork to be done, or one of your team members constantly grates on your nerves, or your close rate on proposals is too low, then set a goal to reduce or eliminate that frustration, which will by definition lead to greater enjoyment for you in running your business.
Sometimes there is temptation to create an enjoyment goal along the lines of: Achieve profit and impact goals. The idea is that as long as the business is hitting profit targets and making the impact you want, by default you will enjoy your business more. Be careful of this approach.
The beauty of the profit-impact-enjoyment “triple bottom line” system is the inherent checks and balances it provides. It’s great to set stretch profit and impact goals that make you a little uncomfortable and force you to achieve more than you ever thought you could in these areas, but if the achievement of those goals requires so much of your time, energy, and commitment that it leads to burnout, or health issues, or breakdowns of your personal relationships, then is it worth it?
The key to the triple bottom line approach is setting goals that are aligned and support each other, so that you move the needle in all three areas and not one or two at the expense of the other(s).
Here are the Big Picture and Quarterly Picture tools that I use with my clients to help with goal setting.
Feel free to use them for your planning process. And if you’d like some help, feel free to send me a raven anytime.