Why goal-setting is hard
Goal-setting isn’t just about defining success metrics. The bigger challenge is in getting your team’s full buy-in.
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When set well, goals provide motivation and a measurable target for people to work towards. When set poorly, goals can be highly demoralizing, incredibly damaging for the team, and can give your team the impression that you’re out of touch with reality.
Goal-setting is hard because it’s not just about setting a top-level goal and telling your team to execute it. You have to do the work to get your team bought in on the goal. They have to believe that the goal is important, non-negotiable, and achievable.
The four-minute mile
This is a bit of a trite business anecdote, but I think it’s actually an instructive one.
As far as we know, prior to 1954, nobody had ever run a four-minute mile. Some people even believed that it was physically impossible. But then Roger Bannister broke the four-minute mile barrier by becoming the first person to run a mile in 3:59.4.
Incredibly, only 46 days later, John Landy broke Bannister’s record by running a mile in 3:57.9. Today, more than 1,663 athletes have broken the four-minute barrier. What was once an unattainable, “you’d get laughed at” goal has now become a standard for professional runners around the world.
And the big difference is not that some technology shift enabled people to run faster. People didn’t think it was possible, so they just didn’t try. Once they knew it was possible, many people were able to do it.
So the takeaway here is twofold: your team is more likely to achieve a difficult goal if they believe that it’s possible. And you’ll get their best effort when you show them that it is possible.
Your job is to inspire your team to believe that the goal is within reach.
Goals should not feel arbitrary or optional
So how do you set goals that your team can rally around? The answer can’t be “Well, Waseem said it needs to be X”—that isn’t sufficient motivation. If that were the only reason, your team would reasonably ask, “Wouldn’t it be nicer if the goal were instead 50% easier? Why are you making our lives so difficult?”
You need to make sure your team understands why the goals are set the way they are, and why that matters. In some ways, the ideal narrative is almost one of existential risk to the business: “If we don’t achieve this goal, we won’t be able to raise money, and the company will stop existing.” It doesn’t necessarily have to be that dramatic, but it should be clear that the goals are not optional, are not made up at the whim of the company’s management, and that missing the goals will have real, negative consequences for the company.
Anchor ambitious goals to reality
Let’s say you looked at the numbers with your CFO, and the company needs to double its revenue this year in order to stay competitive within the market. That can sound like a wild goal to your team—after all, they were presumably working super-hard to hit last year’s revenue goal—how are they going to double revenue this year?
One way to show your team that an ambitious goal is possible is by referencing the path of other successful companies in your space. If other companies like ours have been able to grow at this pace, we know it’s not impossible. Flipping the question around: what is the gating factor that actually prevents us from hitting this goal? Is the market big enough? Do we have the right people? Do we have enough capital? If we have the resources we need, what prevents us from hitting the goal, and how do we unblock that?
Break down large goals into smaller chunks
Finally, your goals need to be concrete and tangible. Your team needs to understand how your high-level goals actually cascade down into goals that are directly measurable, to understand whether or not they’re practical.
Suppose your goal is to add $X in revenue in 2023. How many new customers would that require? How many open opportunities would that require? How many leads would that require? How much website traffic would that require? How many blog posts would you need to publish to generate that much traffic? How realistic do each of these steps feel?
An ambitious goal is most scary when there’s no clear path to getting there. The more you break down your large goal into metrics that can be directly influenced by individual team members, the more realistic and attainable it becomes, and the more likely it is that your team will (a) buy into the goal, and (b) actually hit it.
Give your team the full picture
At Pilot, the key metrics that I care about are revenue, gross margin, net retention, customer satisfaction, and cash burn. I care about these metrics both because they’re an overall signal of the business’s health, but also because they directly impact our ability to access capital in the future, which affects future growth and so on and so forth.
The reason why we have these goals isn’t because I woke up one day and decided we need to do $X in revenue this year. It’s because hitting these numbers enables us to continue being a top-tier, best-in-class company. And that’s the message we reinforce with the company every quarter when we review our progress against each of these goals.
If you want your team to be fully committed to the goals you set, you have to give them visibility into your thought process. They have to understand why the goals are set the way they are, and why these particular metrics matter. Most importantly, you have to convince your team that the goal you’ve set is not only attainable, but there’s a very real path to getting there—a path that they have direct control of.