Small Business Series – Mistake 2:
The next installment in our series of mistakes to avoid as a small business owner is related to goal setting. We’ve written about goal-setting previously, but improper goal planning is a common small business failure. The concept of “SMART” goals is widely known, but specific aspects of that method of goal-setting are harder to achieve than others. See how Homer Simpson identifies which of the S-M-A-R-T goals is easy to miss – “A” in the following clip.
Many businesses have specific and measurable goals that are relevant and time-bound. A goal as simple as “I want to increase our annual sales from $10 million to $12 million this year” hits on four of the five facets of SMART goals. However, it may or may not be achievable. And if one element of the goal is missing, the goal becomes more likely to fail, and the business owner may become more frustrated.
Having an unachievable goal is the same as having an unrealistic goal. If I say that I want to successfully complete a marathon this year, but I have not run farther than two miles in the last year, that goal may not be achievable. The marathon goal may be unrealistic, but unless I enlist the help of others, it is a goal that mostly affects me. However, unrealistic goals in a team setting are incredibly dangerous. If the person setting the goals is not the one executing them, he or she may be thinking only of the benefit of attaining the goal, not the process necessary to reach it. Unless that plan is provided, the leader will unwittingly put their team in a position where failure is the most likely outcome. In turn, it has manifold negative repercussions such as:
- Low Morale – if a team is consistently trying to reach a target that is unattainable, the team is rarely going to taste the fruits of success, and morale will be a frequent casualty.
- Loss of Motivation – unachievable goals will cause a team to be less willing to attempt to meet those goals.
- Loss of Confidence in Leadership – a leader who provides unrealistic goals risks loss of his or her credibility with their team, regardless of other skills and knowledge they may have.
- Staff Turnover – the three reasons above are key factors in employees making the decisions to leave a company.
How to make goals more realistic:
- Consider a Plan First – if there is a plan in place to meet a goal, it is more achievable than if there is no path to success.
- Be Empathetic – in cases where the goal-setter is not the one striving to achieve the goal, the leader needs to put themselves in the shoes of those who will be working toward the goal.
- Solicit Advice – nothing builds a team like telling the team members that their opinion matters and a goal-setting exercise will not only lead to more achievable goals, but there will also be greater buy-in from the team.
- Re-assess – despite best efforts and planning, issues may arise that cause a once-achievable goal to become unreachable, so continually monitoring the achievability of a goal is necessary.
Don’t be afraid to stretch. None of this is to insinuate that stretch goals, those that push a team or organization forward and out of their comfort zone, are a bad thing. The best praise a coach or mentor or leader can receive is that his or her followers achieved more than they originally thought possible. Really, that’s the goal of the leader, to get everything out of the team as is possible. It just has to be realistic.
What goals have you set for your small business?
Have you been able to achieve them?
See previous installments in the Small Business Mistakes Series:
By Dan Massey, CPA, Manager
This installment is brought to you by Dan Massey. Dan is a Partner in the firm’s Assurance Division. He performs audit services for clients in many industries, focusing on construction, entertainment production, and not-for-profit entities.
Dan is both a member of the American Institute of Certified Public Accountants (AICPA) and the Pennsylvania Institute of Certified Public Accountants (PICPA). He is also chairman of the C.O.R.E. Task Force for the Keystone Chapter of Associated Builders and Contractors.
Connect with Dan on LinkedIn or contact our office to get in touch.
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