When I had the idea for this week’s blog, I started writing it, and then I went to a leadership seminar in the morning and some of the content tied in nicely with the topic. I’ll have a fuller post next week about the Live2Lead seminar that I attended, where John Maxwell provided a good takeaway. He said, in referring to goal-setting, “Dreams are free, but the journey isn’t” and that “so many people give up on their dreams because they cost too much.”
I have my own interpretation that is similar. Just like there is Maslow’s Hierarchy of Needs, I have Massey’s Hierarchy of Wants, which has three levels – (1) Want, (2) Want to Do, and (3) Do. All that it takes to get into the first level, Want, is to have something that is desired. “I want a million dollars.” “I want a new car.” To get beyond Level 1, though, there needs to be a plan of action. Simply wanting a new car will not make it happen. One must want it enough that they actually devise a way to achieve their desire. For instance, if I want a new car, I have to figure out how it will work in my budget and then decide what car dealerships I want to visit and what my timeframe is for accomplishing this. I can’t reach the highest level, Do, without wanting to Do enough to create a plan. If my plan works successfully, then I’ve reached the top of the hierarchy and achieved my initial want.
Simon Sinek, one of my favorite speakers and authors on leadership, also spoke at the seminar, and he spoke similarly of how often people “see the summit but not the mountain.” In other words, they have a goal but no plan to accomplish it and then get discouraged when the goal is not realized.
Businesses can often fall into this trap. A majority of businesses want to grow – in revenue dollars, return on investment, or employees. Some are content where they are for a variety of legitimate reasons, but many would like to see increased market share so that the owners can continue to provide for their families and their employees’ families.
Unfortunately, many business never get beyond the Want phase in goal-setting. They say that they want to experience 10 percent revenue growth for each of the next five years. They create a budget based on these higher numbers but have no plan for how to achieve that growth. Really, what this business has is a goal founded almost solely on hope.
In order to have the best chance of achieving goals, a company should consider many factors, including the following:
Is the market right for growth?
Growth in some lines of business will be easier to come by than in other areas. Being in a sector that has high demand will provide greater opportunity for growth, but offering a service that is losing demand does not mean that a business will fail; it may just need to change their model. Netflix, for example, once had a large share of their business from DVDs delivered via mail. Now, they provide most of their service via streaming and online services. Netflix had this goal from the very beginning; they knew that DVD by mail was not going to be a lasting business model; it was just an initial step in their process.
Kodak used to be the biggest name in film, but nobody uses film anymore. Kodak still exists, providing printers, digital cameras, and even a phone. Kodak determined their market was not conducive to growth, so they shifted markets.
Where is the growth coming from?
Once a business determines if the market is ripe for growth, that business needs to determine where the growth is coming from. Will the company command additional services from existing customers? Will there be more consumers in the market, meaning that a constant market share will automatically increase the number of customers? Will the company be able to take customers from competitors in the market place?
What needs to be in place in order for the growth to occur?
Depending on where the growth originates will dictate how the growth can occur. If a construction company wants to grow, perhaps they will focus on streamlining their bid process. For example, if the company is only successful on 20 percent of its bids and submits bids for jobs it knows it is unlikely to get, that business may be better off limiting its bids to more practical targets, which could increase its success rate on those more attractive, feasible customers. Another example would be a nonprofit that decides it can increase its donation revenue by having a more concerted effort in asking donors for money. In the former example, the construction company will need to re-evaluate its bidding process and implement some changes. The latter company, a nonprofit, may need donor-tracking software or a person dedicated to fundraising to help reach their goals.
Reassess goals often.
Along the process, it is possible that the initial goal turns out not to be realistic. A company that has a goal of doubling revenue in 10 years will have difficulty meeting that goal if the economy enters a recession in Year 5. Being able to assess those goals and modify them will allow for greater success. Situations change, and trying to fit an outdated goal into a modified environment will lead to frustration. Determining if goals are still achievable along the way will make the journey more satisfying and the goals more likely to come by.
By Dan Massey, CPA, Manager