Have you ever watched the average driver navigate a roundabout? While roundabouts are commonly found throughout the rest of the world, they are still relatively rare in America, and as such, they turn into a kind of Mad Max-inspired free for all. Drivers entering the roundabout come to a complete stop, while those trying to exit will oftentimes miss their turn or stop before exiting. It’s madness!
Watching the flow of traffic (or lack thereof) got me thinking that roundabouts in America are a great analogy for directionless progress, a problem I see all too often in businesses. On paper, roundabouts are an improvement over a traditional 4-way stop intersection. Whereas at a 4-way stop, traffic takes turns moving, a roundabout should theoretically allow a constant movement of cars. However, for drivers who don’t know how it works, the situation becomes confusing, and while it will definitely feel like you’re constantly moving, you just don’t know where you’re going!
And if you don’t know where you’re going, are you actually going anywhere?
It’s the same thing with a business. You can post explosive results, but if you don’t have an overall direction–if you don’t have goals–you are ultimately lost. You might even run into problems down the road if you don’t know where you’re going.
So if you don’t want your business to be stuck driving in circles, how do you make sure you know where you’re going while you’re growing? It’s simple: establish goals.
Establishing goals is one of the most important things a business can do. If you don’t have goals, you’re just burning resources without actually making progress. Creating goals gives you a destination, and when you have your destination, you can plan a route. Fortunately, creating goals comes pretty naturally for most people. They can be as simple as hitting sales goals and as complicated as launching a new product or service.
This isn’t anything groundbreaking, but it should be said: on top of your short-term goals, do not forget about creating long-term goals. These should be reflected in your company’s mission statement. If your long-term goals go against your mission statement, you’re ultimately trying to head in two different directions at the same time.
Think of it like this: your short-term goals are pit stops on the way to your long-term goal. Short-term goals are necessities, similar to bathroom breaks and stopping for gas, and are vital to the health of your company; however, if all you’re doing is driving around and filling up your tank, you’re driving without a purpose and not actually going anywhere. You’re just adding miles to your odometer. No, your long-term goal ultimately sets the direction of your company and gives you a destination.
When you have a long-term goal, you have an objective to strive towards. You can focus your innovation and growth in the right ways.
Planning the Best Route
Let’s say two companies are headed in the same direction. That doesn’t mean they’re going to take the same route to get there. You might take the scenic route, the highway, or simply listen to your smartphone for the fastest route. Your short-term goals dictate how you achieve your long-term goals, so it’s important to evaluate and set goals carefully.
To plot your own route, you should create goals that encourage meaningful growth–that is to say, growth that has a purpose and puts you on your way to achieve your long-term goals. Here are a few tips:
- SWOT Signs: you may have heard of a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). This kind of analysis is a great starting point and lets you identify where you excel and where you need work, as well as what factors could impact your business.
- Keep your eye on the road: do you know where your industry is headed? Take note of trends and keep one eye on the future. You don’t want to be blindsided by sudden shifts in the marketplace. Make sure at least some of your goals address these short-term (and potentially long-term) changes. You don’t want to get stuck in traffic!
- Benchmark Performance: a good goal should be measurable. Saying “improve our sales year-over-year” doesn’t mean as much as “aim for a 2% growth in sales this year.” By making your goals measurable, you can get an exact idea of your progress.
- Timed Race: good goals have a time limit. Why? A goal that you set in 2001 isn’t going to be timely and may even be counterproductive to your business today. To address this, your goals should have a time component. A basic example: “launch a new product” is a less effective way of saying, “We will launch a new product by the Q1 2020.”
- A Hyundai is Not a Porsche: the fun thing about goal setting is you can be ambitious; however, unrealistic goals are not going to do you any favors. Some businesses have the capabilities to create life-changing products and services, but even the biggest companies frequently stick to iterations and not reinventing the wheel.
A Fine-Tuned Engine
So why is it so important that you set smart goals? Aren’t having basic goals enough? The better your goals, the better your business runs. Short-term goals can be optimized to improve your overall output and help dictate just how fast you achieve your long-term objectives.
Remember back in the days of paper maps? You had to really know exactly where you’re going. Missing one turn could cost you a lot of time, as you had to pull over, unfold that huge map, and find out how to get back to where you were supposed to go.
Smart goals–goals that you are constantly evaluating and measuring–is like using Google Maps. You miss your turn, your efforts aren’t completely wasted. Well-planned goals are a lot like this. Even if you miss your short-term goal, you know by how much and how exactly you can get back on track.
If you find yourself without goals, either short- or long-term, the best day to set goals was yesterday, but the second best day is today. Gather your team, review your performances, decide where you’re going, and stomp on that accelerator!
Even if you have goals, you should be sure to review them every so often. Depending on your industry, you might want to have an annual assessment, but at the very least, evaluate your goals at least once every five years. Timely, specific goals can put your company on the road to success. You might even be able to figure out how to traverse a roundabout!