Whether you’re a fan of New Year’s resolutions or not, there’s no denying the appeal of New Year’s in terms of goal setting.
January is the perfect time for leaders to reflect on the previous 12 months and reset the company’s goals for the year ahead.
There’s just one problem though. It’s all too easy for leaders to fall into the trap of setting highly unrealistic goals that will cause nothing but stress and disappointment for themselves and their teams.
Almost half of the world’s workers feel the burden of stress, with unrealistic expectations cited as one of the leading causes of workplace stress, according to research by Gallup.
Unrealistic goals are not just bad for your employees, they’re bad for your business. Research from the Harvard Business Review suggests that, “while the use of stretch goals is quite common, successful use is not”.
This isn’t to say you can’t set ambitious goals, but rather that the goals must be realistic, too. For example, one goal I’ve set for SMARTECH Business Solutions this year is to reach A$100 million [US$70.6 million] in revenue in 2023. While this goal is certainly ambitious, it’s also realistic based on a rational and logical assessment of our previous years’ earnings.
Based on my experience, here are my three top tips for setting realistic, yet ambitious, goals.
1. Communicate your goals
Communication is critical for setting realistic goals for your team members. Your team should understand what the goal means, how it’s going to be measured and what part they have to play in achieving it.
Your team should feel that the goal is both challenging and realistic in equal measure. If they feel it’s unrealistic, they will feel unmotivated and anxious about reaching it. If they feel it’s too easy to achieve, they will feel equally unmotivated due to a lack of challenge.
It can also be helpful to communicate any special meaning behind your chosen goal. For example, our goal of A$100 million [US$70.6 million] within 12 months fits nicely into our wider brand story.
SMARTECH will be celebrating 100 years in business very soon, with the Quadient/Neopost brand launching Australia’s first postage meters in 1927. It makes perfect sense to reward our shareholders and employees with a meaningful corresponding milestone.
2. Know when to reassess your goals
There will always be times when you have to reassess your goals.
In fact, a CEO who sticks blindly to their plans is often a recipe for disaster. The key is to master the skill of knowing when your goals aren’t realistic, and having a plan in place to course correct.
Cash flow, for instance, is something that should be measured and reassessed on a weekly basis. If the plan isn’t playing out, make sure to change course on your cash cycle conversion strategy sooner rather than later.
Employee work performance plans are another form of goal-setting that should be reassessed on a regular basis, since there are often many variables at play. This way, if there is a glaring issue, it’s possible to identify improvement areas and seek remedies before the staff member gets discouraged, anxious, or despondent.
It is important not to lose sight of the turbulent economic times we’re currently living in, with the impact of the pandemic still being felt around the world. Interest rates will continue to rise, and the global shipping crisis is showing no signs of slowing down.
I’ve set our goal of A$100 million [US$70.6 million] with these critical economic factors in mind and will continue to remain vigilant of any ongoing market shifts.
3. Set a realistic goal schedule
Planning ahead is one of the most effective ways to ensure goals are well-understood, timely and realistic. With a clear schedule and roadmap in place, your entire team will have a better understanding of exactly how, why and when your goals are being set.
My own goal-setting schedule looks something like this: between October to December, I work with my executive leadership team to prepare the company’s upcoming new year profit and loss plan and the company’s full-year cash flow plan. In December, based on the year-to-date financial and company results, we set the vision, mission and strategic themes for the new year.
This year, our vision is to be the most trusted supplier of business automation solutions and an employer of choice with consistent growth. All of our goals, including our goal to hit A$100 million [US$70.6 million] in revenue, cascade down from this single, clear vision. Then, in January, we will communicate all of the above to employees and shareholders alike.
Your goal schedule will probably be different to mine or anyone else’s. It’s about finding a schedule that works for you and your company and makes sense for everyone in it, whether your goal is to hit $1 million or $100 million.
Vincent Nair is the CEO of SMARTECH Business Systems, a global industry-leading channel partner for a range of businesses in the print and communications industry. Nair has led the growth and turnaround of the business from a loss-making enterprise in 2016 to 988% earnings growth in 2022. Under his leadership, the company has had a significant compound annual growth rate (CAGR) of 61% over the last six years.