All businesses, whether they’re multinational corporations or startups on the verge or mum and pop operations, set goals. To lead the market within five years. To double sales within three. To gain X number of customers by such and such date. Departments and strategic projects will also be guided and galvanised by goals.
Recently, challenger energy supplier Octopus announced its ambition to serve 100 million customers worldwide via its Kraken platform. Energy generator Drax said it will carbon-negative by 2030. Elon Musk wants SpaceX to send one million people to Mars by 2050. These ambitions and benchmarks, whether they’re extraterrestrial or more modest, motivate staff and concentrate efforts. But how can we keep our target on target—ensuring it doesn’t slip out of focus, ensuring it isn’t thwarted or eclipsed by other problems, ensuring it’s successful and all facets of it delivered?
A four-question framework, proposed by Marco Mancesti, Research and Development Director at IMD, can guide businesses setting and striving for goals.
He uses the example of Volkswagen to demonstrate how a goal can get off track. In its 2014 annual report, the German car manufacturer announced its intention of becoming “the world’s leading automaker by 2018—both economically and ecologically.” And Volkswagen did achieve part of this goal, selling more vehicles than Toyota in 2016. However, the ‘dieselgate’ scandal meant that Volkswagen certainly hadn’t achieved the ecological clause of its ambition. Whether or not it was the largest seller of cars by volume, its reputation would be badly tarnished by the scandal.
So what questions should your business ask to keep its goals in focus and avoid the errors made by Volkswagen? Mancesti suggests the following:
- How will you measure success? First, you’ll need to set indicators—the measurements you’ll use to determine if you’ve met your goal. These might be revenue, they might be carbon intensity, they might be volume of sales. But they’ll need to encompass all parts of your goal. Mancesti calls this ensuring your indicators are “wise.”
- Are eternal circumstances favourable or hostile to your goals? You also need to pay attention to the context in which your business operates. This can encompass everything from the state of the wider economy to governmental regulation to consumer appetites to media scrutiny. Will these external circumstances help or hinder the delivery of your goals? Are they changing over the timeline of your plan? Volkswagen’s error was in overlooking increased attention on ecological matters, especially from state regulators and NGOs, and the mounting environmental concerns of the public, which led to the exposure of dieselgate and the backlash against the brand.
- How pertinent is your strategy? Is your plan delivering results? As the context changes, is your plan still feasible and worthwhile? Don’t be afraid to reevaluate the strategy for achieving your goals.
- How ready is your team? Before setting a lofty goal, you need to ensure your team can do the work to deliver it. It needs to be aligned, integrated, both knowledgable and capable of innovation. It needs to be able to rise to challenges and produce solutions as contexts evolve, strategies are revised, and you confront the inevitable hitches, from fierce competition to financial crises to just plain bad luck.