In this clarifying episode, Scott Ritzheimer, Founder of Scale Architects, shares why goals exist to drive better decisions and actions toward your vision. If you struggle with misaligned goals or ineffective planning across any stage, you won’t want to miss it.
You will discover:
– What reviewing goals teaches you to master the skill over time
– Why goals primarily guide decisions and actions, not just achievement
– How to set goals aligned with your mission, vision, and values
Episode Transcript
Scott Ritzheimer
Hello, hello and welcome. Welcome once again to the Start scale and succeed podcast. Yes, it is the only podcast that grows with you through all seven stages of your journey as a founder and I’m your host, Scott Ritzheimer, and today we’ve got another solo episode for you, and I want to spend it talking about goals. You see, over the last five or so months, I’ve spent an enormous amount of team time sitting in the session room with teams setting and reviewing and planning their annual and quarterly goals. And during that time, I’ve got to thinking quite a bit, and I’ve started asking all of my teams this one specific question, and I want to pose it for you today. And the question is quite simple, what is the purpose of a goal? Now think about it for a moment, and and again, I’ve asked virtually every one of my clients, and their their response is probably something similar to yours. I’ve had some of them say they wanted to achieve something, or they wanted to know where they were going, or they wanted to know what to focus on. Someone had nailed right on the head and said they wanted to make more money. Others said that they wanted a way of knowing how to hold each other accountable. And these are all great reasons. There’s 1000 other reasons why we would want to have goals. But while they’re all true, I think that those are mostly side effects. I think that those are benefits of goals. I don’t think they’re the real reason why you set a goal. In fact, I think that the real reason, and the only reason for a goal, the only purpose to have a goal is to get you and your team to make the right decisions and take the right actions to move toward your shared vision as an organization. So this is specifically in the organizational context.
You might be able to come up with a couple other derivations of the rule, if you will, in other environments. But fundamentally, the purpose of a goal is to get you and your team to make the right decisions and take the right actions and move toward your mission, vision and values as an organization. That’s it. And if that sounds obvious, it’s because it is. But think about what happens when we get it wrong, if we set a goal because we want to achieve a certain result, or if we set a goal that we think is possible, and then find out that it isn’t possible, if we don’t really have a clear definition for goals, then how do we know whether or not we’ve set a good goal? And even more importantly, this doesn’t happen this part of the year, but about three, four months from now, you know it will. What do you do when a goal seems wrong? And that’s a really important question, and we’ve got to have a way of knowing whether or not the goal is right, and it’s impossible to know that across all circumstances, whether the goal should be this many million or this many million so that that’s out of the picture. We can’t really do that, but we can come up with a metric to really decide whether or not the goal is correct for our team, and that is whether or not it’s moving us in the right direction, if that goal continues to help us and serve us by getting us to make the best decisions and make take the best actions, then it’s a good goal. Doesn’t matter if you can achieve it or not.
In fact, that’s almost entirely cultural. You’ll see some groups love to set goals that they don’t stand a chance of achieving, but they are moved to make better decisions and take better actions, just by the sheer anticipation of the goal, by by the excitement that it creates and the way that it stretches them and gets them to think differently. It helps them make better decisions and take better actions. Now, there are some teams I work with that would just crumble under that kind of pressure. They don’t do their best work being way behind on the eight ball. In fact, they do their best work by being ahead. And so for each of these groups, those who do their best work when they’re under the gun, versus those who do their best work in their head, the right goal is going to be completely different, even if they’re looking for the same result. And the reason for that is because the purpose of a goal isn’t to be the right goal or not the right goal. The purpose of a goal is to help you make the right decisions and take the right actions. Really, really important distinction. And so especially for those of you who’ve been in this position before, you recognize that you get about midway through the year and you realize we were taking something when we set that goal.
And so the question you have to ask yourself is first and foremost, if you feel like a goal is not going to be achievable, is it the right goal? Is it actually the right one that we need to move us in the direction that we need to go to achieve our mission, vision and values, and will it continue to inspire us to take the right actions and make the right decisions? If so, it’s the right goal, leave it. Alone and don’t change it. However, if you just missed the mark and you set a goal that’s so unachievable but that it’s not even relevant anymore, then by all means, you must change it. Why? Because the purpose of the goal is to not bludgeon you over the side of the head when you don’t achieve it. The purpose of a goal is to help you make the right decisions and take the right actions toward your shared vision as an organization. And so I think it’s really helpful to look at a goal through that lens. Is when you’re setting it, whenever you’re pursuing it, when you’re setting other goals based on it, what you need to know is, is this thing helping us to make the right decisions and helping us take the right action? It really is the litmus test. Now that’s also really important, because just setting a goal by yourself does absolutely nothing. I’ll have teams, especially early on, they’ll set goals because they’re supposed to, right? That’s what you do. You set goals some operating system somewhere, some person, maybe it’s me, told them, You need to have goals. And so they set goals, and then they just kind of go back about their life, doing whatever they did. And every once in a while, they come back and check on those goals. And, you know, it’s a little bit like a goal slot machine. You know, it’s like, we don’t know if we got it or not. Let’s just pull the slot and see what happens. That’s not very helpful, because that’s not a goal serving its purpose. If you set your goals and then you don’t look at them again until you review whether or not they were complete. Not they were completed, then what power have you given it to help you make the right decisions or take the right actions? Virtually none. Now, interestingly enough, there’s still a benefit from setting those goals and writing them down, even if you don’t remember them.
That’s another conversation for another time. We want to set goals that help us make the right decisions and take the right actions. And so when we’re doing that, I have found it’s really helpful to recognize that there are not necessarily different types of goals, but that goals set over different timeframes serve different purposes within this context of making the right decisions and take the right actions. And so I want to talk to you, regardless of what your goals are called, when you set a goal over each of these time frames, that’ll make sense here in a second, how do those best support you in making the right decisions and taking the right actions? So I want to work through those one at a time here. The first one is 10 year goal, right? You’ll hear this called the big, hairy audacious goal. Sometimes it’ll be called a mission or a vision, depending on your definition of those, but this is like a long term out in the future goal. And how can something that’s that far away? 10 years is an eternity. I mean, think back to 10 years ago. What were you doing now? And how well could you have predicted what you’re doing here today? Probably, yeah, probably not great. And so we can’t use a 10 year goal as if we’re predicting the future. That’s not very helpful.
But what 10 year goals do very, very effectively is they set the velocity for the organization. Now I’m using that word really specifically, because if you’re a nerd like me, and you know a little bit about science and physics, you know that velocity is speed with a vector, or it’s motion in a direction, and it’s such a great definition for what a 10 year goal does. Because what it does is it says, Hey, where are we going? Right? What big goal are we? Where on the horizon are we headed? And then it sets the speed. So it’s not just where we’re going, but how fast we need to get there, and that’s a really critical piece. So a good 10 year goal. Maybe it’s a five year goal, maybe it’s a 50 year goal, but most folks it’s somewhere in the five to 15 year range. And for even most within that, it’s about 10 years out or the end of the decade. Some folks like to do the purpose behind that type of goal is to set the velocity of the direction and to tell your team where you’re going and how fast you need to get there, and in doing so, it should help you create massive progress toward achieving your mission. Vision. Values as an organization, 10 year goals are really, really great for that, both the speed and direction. Once you know your 10 year goal, you can start to map that to Okay. How much progress do we made? Do we need to make? When do you need to grow a lot over the next years and then stabilize over the years after that? Do you need to stabilize over the next few years and grow a lot after that? We like to think that the path toward our 10 year goal is either a straight line or an exponential curve that just gets better over time, and that’s never the case. It’s almost always an S type curve or even a set of S’s between now and 10 years from now. But mapping out where we’re going and using that to start to figure out what our speed and direction need to be is super, super helpful.
All right, let’s move on three year goals. So there’s this interesting thing for executive teams. Now this is really for the folks here that are in stages, 456, and seven, to some extent, really four and five. But one of the things that you start to recognize at that point is your growth goals become so big that you no longer have the luxury of waiting to focus on them until the year when you need to grow. And so for a lot of my stage four and stage five clients this year, we spent most of the strategic planning process not thinking about what this year’s goals need to be, but what their three year goals need to be, and what has to happen between now and then. For example, if you’re in an industry that requires a ton of technical expertise, you may be able to hire for that expertise, but you may also need to home grow that expertise. And if that’s the case, that’s not a couple months thing. For some industries that might take a couple years. If you’re building out your sales team and adding another rep in a new territory, they’re not going to sell as much on day one as your existing reps are doing on year 10. There’s a ramp up period there. And for many of my clients in many industries, especially if you have a long sales cycle, that’s a multi year process. And so if you feel like you’re regularly starting the year behind, or you’re trying to create growth? And it’s just not happening. It’s probably because you’re waiting too long, and that’s where the three year goal comes in, because what it does is it tells you what you need to do this year to set you up for the growth and success you want next year. And for any of you who are familiar with my work, one of the things you’ll know is that in Stage Five, your job as the CEO is not focused on this year, but to focus on what’s coming in future years, and what you need to do this year for those future years. This three year goal will help you bring your whole team into that discussion. It’s really powerful, all right? Moving along one year goals, right? This most kind of common planning cycle.
Everyone’s got annual strategic planning that they do in some way, shape or form, and we can still be clearer, though, on what an annual goal is supposed to do. And interestingly enough, this is what I think that it’s supposed to do. It’s supposed to push back against the urgent and keep the most important things first right. We’ve all heard about tyranny of the urgent, and I think that our one year goals, if they’re set right, are the best barrier to falling prey to the tyranny of the urgent. They allow us to keep the most important things important for an entire year. There’s a saying that all of my clients now quote back to me, and I don’t even remember who I got it from. It’s not my saying, but they said we have a tendency to underestimate what we can do in the long term and overestimate what we can do in the short term. And annual planning is is the long term, you can make a ton of progress over the course of a year, but only if you keep the most important things as the most important things, and that’s the role of one year goals. And so again, if you set those at the beginning of the year, and then you review them at the end of the year, it’s not going to tell you how to keep the most important things important. However, if you set those goals, and then you keep them in front of you, and you consistently use them as you make decisions throughout the course of the year, you’ll find those one year goals become really, really helpful in clarifying how you need to make decisions and what’s on. And that brings us to the next and this is probably my favorite duration for goals, I think it’s the most effective way to set goals. You can do it at an organization level. You can do it at a personal level. You can do it in your family.
But these are quarterly goals, 90 day goals, 13 week goals, three month goals, however you want to describe them, there’s some interesting science around this. We’re not going to get into it. But basically, it, but basically, 90 days is about as far ahead in time as you can think and still think about yourself. And that’s a weird way of saying it’s about as far as you can go and setting a goal that you still think you have to achieve. There’s some weird psychological stuff that happens after that, where we actually think it’s future self school, not our goal, and we will do some stupid things because of that, but quarterly goals, that’s hard to do. Quarterly goals all but certainly demand that you start taking action immediately. That’s not true for one year goals, a lot of one year goals, you can wait a week or a month or even a quarter and still accomplish those goals. Well, you can’t do that in quarterly goals or objectives, you’ve got to start making progress on them as soon as possible, and that’s what they’re there for. They are there to help you make as much process progress as possible toward your annual goals and do it as soon as possible. Quarterly goals are very, very effective. They are the way that you achieve your one year goals. Hands down best way to do it, if you’re like some companies who just set annually, annual goals, and you’re like most of those companies who get frustrated by your ability to achieve them, it may be because you’re not breaking them down into quarterly emphasis and taking action on them at that level, a very, very common sense and very common problem, and could be just this answer to you. So if you feel like you’re not making as much progress as you should, as soon as you should, you may want to either start working on quarterly goals or refine the way that you set them. There’s probably an issue in there, all right, two more levels, sorry, three more levels, and we’ll wrap up monthly.
I’m not gonna call these goals anymore, although you’ll still hear like called a sales goal for the month or something along those lines, these are probably better referred to as targets. They tend to be more KPI based than project based for most folks. And what these are helpful for these monthly goals is to help you know whether or not you’re executing effectively. That’s what monthly targets do, really, really well. And for this reason, you’ll see a lot of monthly stuff tends to be around the KPIs that you track as an organization, things like revenue or profit or productivity or efficiency, gross margin. These are all targets that we typically review and track on a monthly basis. Why? Because monthly targets are there to help us know whether or not we’re executing effectively. This is also true for those of you who set monthly milestones for your quarterly goals, right? What are those milestones there for to help you know whether or not you’re executing effectively for your quarterly goal? So that’s what monthly is for weekly is to make sure that you are taking the leading actions that will result in the success of your overall plan, right? So once we get down to the weekly it’s all about taking actions. And for those of you who are trying to grow really quickly, you need to be taking the right actions before they’re needed, before they’re due. You need to be taking the right leading actions. And so that’s why you’ll get into the discussion about leading indicators. And leading indicators are almost always proactive, activity based metrics. We’re looking at the leading actions that we need to take, not so much at this stage about the decisions that we make we need to make, but about the actions we need to take.
And so weekly stuff is very, very good at saying, Are we doing the things that we need to do that will end up resulting in the success that we want? And then finally, daily, the most important thing you need to do today, that’s really what it boils down to, and that’ll give you a sense of clarity, give you a sense of calm, it’ll give you a sense of certainty, because even if the world’s changing around you, you can still have a pretty good sense of what you need to do today. And so if you’re in an environment where there’s a ton of change, like we all are, if you’re in an environment where there’s a ton of uncertainty, maybe your market is shifting, then sometimes all you can do is just focus on the most important, the most urgent, the most important thing you need to do today. And you stack a couple of those days together, and you’ll be back in weekly territory. You’ll be able to focus on your monthly targets, and you’ll be able to build up from there.
And so I just want to encourage you, as you guys are setting your annual goals, pursuing your annual goals, reviewing your annual goals, setting your quarterly targets, whatever it may be, I want you to run it through that lens is each one of these things helping us to make the best decisions and take the best actions to move toward our mission, vision and value, and if it is probably serving you really well, if it’s not, hopefully you got a couple of pointers over the course of this episode that will help you and your team to set that and move forward from there. And the last thing that I want to share as I wrap up this episode is that when it comes to goals and getting the right goals, getting great goals, getting the goals that help you take the most, greatest, wonderfulest, being silly, but help you make the best decisions and take the best actions those setting those goals takes some time. It’s a skill that you need to learn to develop. And I’d actually say each of those different timescales that I described is its own skill. It’s kind of like the difference in riding a bicycle and riding a motorcycle, or if you want to go all the way down riding a bike with fixed gears to a bike that has shifters, it’s a different skill. You have to learn to ride it a different way.
You’ll be going at a different speed than you were beforehand. And so the reason why that matters is because it’s worth your time to learn this deal and get it right. You’re gonna get it wrong at first. You’re gonna set terrible goals to start with, no problem at all, and you might not achieve any of those goals. No problem. At all you might achieve all of those goals. That’s not if it was the wrong goal in the first place, then who cares if you got it or not. What really matters is whether or not you’re learning the skill of setting and achieving those goals. And so each time you set goals, it’s worthwhile to make sure that you take sometimes almost as much time that you spent setting them as reviewing them. After we do this a lot with my consulting clients, we spend a lot of time reviewing what we learned from these goals, what went well, what didn’t go well, what we learned, what we can do better next time. Because what we’re doing is we’re actively working to develop the skill of setting great goals. And what are great goals? They are goals. They are targets. They are distant objectives that help you and your team make better decisions and take better actions. I hope this was helpful for you. It’s been a conversation I’ve had with lots of my clients recently, and so if they’re having those challenges, you might need to I thought it’d be a great discussion for us here on the podcast again. If these episodes are helpful for you, let us know. Love to hear from you. I hope you enjoyed this episode, and I cannot wait to see you next time. Take care.
Contact Scott Ritzheimer
Scott helped start nearly 20,000 new businesses and nonprofits and with his business partner started led their multimillion-dollar business through an exceptional and extended growth phase (over 10 years of double-digit growth) all before he turned 35.He founded Scale Architects to help founders and CEOs identify and implement the one essential strategy they need right now to get them on the fast track to Predictable Success.
Want to learn more about Scott Ritzheimer’s work at Scale Architects? Check out his website at https://www.scalearchitects.com/