Setting Business Goals: The Foundation of Strategic Transformation

Are your company’s highest-level goals ambitious enough to allow you to thrive in a world where so many businesses succeed by tearing up the rule book?  Some of the more well-known examples include:

1. Breaking through industry boundaries:  Amazon transformed from an online bookseller into numerous industries, revolutionising each of them along the way.
2. Opening their ecosystem: Apple’s decision to open its ecosystem to third-party developers through the App Store, sparked their turnaround and is the reason so many of us have an iPhone.
3. Co-opetition with competitors: Samsung and Sony collaborated in producing LCD panels to share costs and expertise while remaining competitors in the TV market.

We don’t have to be an Amazon or an Apple to want our businesses to prosper, and every company of every size benefits from being crystal clear on why they exist (mission), what they want to achieve in the long term (vision) and the specific targets they’ll reach to do this (high-level goals).

Yes, they must be realistic, but if your top-level goals are sub-par, the reality is you can probably expect sub-par results.

If yours could do with some recalibration, or you’re about to enter a regular strategy-setting cycle, I've added some suggestions on how to approach it. Each company will develop them differently depending on whether they are owner-led, a PLC, an MNC, PE-backed or happily self-funded, and whatever your specific situation, a note of caution:  there are lots of tools you can use, but largely academic exercises are of no use to anyone and at Positive Momentum we are firmly No-Nonsense.  I have included some I find helpful, but only in the right circumstances.

1.  Get your Facts

• Review your current strategy’s effectiveness, metrics performance, values and culture.
• Assess customer feedback from after-call surveys and focus groups to understand why you have happy customers, and to get ideas for improvements.
• Talk to your partners such as key buyers, suppliers and third parties who can tell you what they’re seeing and what they need from you.
• Understand your competition, purchase competitor reports, complete competitor analysis and benchmarking, and conduct a SWOT.
• Go a step further and talk to your competitors; you never know when you may be able to engage in some win-win co-opetition.
• Complete a PESTLE Analysis to understand the macro-environmental factors affecting you across political, economic, social, and technological, legal and environmental trends.

2.  Get Creative

• This is where the fun really begins.  While your final output will, of course, be pragmatic: the more innovation you can drive at this stage, the better it will be.
• Embrace diversity of thought.  A key principle in Matthew Syed’s essential Black Box Thinking is the importance of this, so include employees from different departments and levels.  All too often this remains at too senior a level and fresh voices are missed. Involvement early on also helps hugely in fostering ownership later. Encourage those involved to push boundaries and challenge assumptions, to speak authentically and appropriately without fear.
• Prioritise face-to-face workshops wherever possible, and where online is unavoidable, use collaborative tools like Miro.
• Understand the opportunities.  Use an established growth strategy approach such as the Ansoff Matrix to decide whether to go deeper into your existing market, develop new markets, create new products, or diversify your offerings.
• Can you create a new market?  I love Blue Ocean Strategy, and its focus on creating new markets (blue oceans) instead of competing in existing, crowded markets (red oceans).  Cirque du Soleil achieved this when it eliminated traditional circus elements and replaced them with a mix of theatre and acrobatics. 
• Use the Strategy Canvas to map industry conditions and find opportunities to tap into unmet need.
• Can you convert non-customers into customers?  Work through the Three Tiers of Non-Customers.  Nintendo achieved this by moving from casual gamers to those who found consoles expensive and complex, to new demographics with the user-friendly Wii.
• Can you diversify?  Use the Six Paths Framework to explore alternative industries, strategic groups, buyer groups or complementary product and service offerings.
• Will you remain in your industry and drive differentiation like Emirates or cost leadership like Ryanair? Porters 5 Forces still applies and can be used here.

3.  Get Critical

• It can be easy to get carried away in the creative phase (well, it can for me!), but goals must be rooted in your reality, albeit an ambitious one.
• Be clear about the resources you have, and those you can secure based on a winning strategic direction.  The best strategy in the world will go nowhere without investment where it’s needed.
• Preparing for Future Uncertainties is always a good idea. VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) are realities that businesses need to account for. Where possible, promote agility with short-term, adjustable objectives.  Uber is a great example of this ability to pivot with its swift focus shift to deliveries at the start of the pandemic. 
• Develop and refine your proposed direction with a constructively critical lens.  Test the ideas with your target audiences and partners: you may love it but what do they think? Remember, the customer is always at the heart of everything you do.

The real test of how good they are is always in hindsight, but these are the questions I keep at the forefront when developing them:

Mission

• Is it clear and concise, articulating your core purpose in one or two sentences?
• Is it inspiring and motivating, relevant to both your business now and in the future?
• Does it highlight what sets your company apart from others?

Vision

• Does it focus on your future aspirations, being both ambitious yet achievable?
• Again, is it clear and concise: less is more.
• Does it align with your core values and culture in a compelling and believable way?

High-level Goals

• Are they completely aligned with the mission and vision? Are they ambitious enough?  How do they compare with the competition?
• Are they realistic within your existing and future resources, both people and capital?
• Are they flexible enough to allow you to adapt to changes, and balanced between short-term and long-term objectives?
• Are they SMART where needed, and do they provide enough direction for the business to build detailed strategic plans from them?

I also find these examples useful, and while rivalling Google or Tesla is out of reach for most organisations, they can serve as a blueprint and litmus test for whether yours hits the mark.

Google

• Mission: To organize the world's information and make it universally accessible and useful.
• Vision: To provide access to the world’s information in one click.
• High-Level Goals: Innovation Leadership: Continuously innovate in search algorithms and technologies to maintain a leadership position in information retrieval. Global Expansion: Expand access to Google's services in emerging markets, aiming to reach every corner of the globe. Sustainability: Operate on 100% renewable energy and improve the energy efficiency of its data centres and offices.

Tesla:

• Mission: To accelerate the world's transition to sustainable energy.
• Vision: To create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.
• High-Level Goals: Production Scale-Up: Ramp up production capacity to meet growing demand for electric vehicles, aiming for 20 million cars per year by 2030. Energy Solutions: Expand the energy storage and solar businesses to support the broader adoption of sustainable energy solutions. Autonomous Driving: Lead the industry in the development and deployment of fully autonomous driving technology.  

I’d love to hear about your experiences with this very first, and vital, step in the strategy cycle.  What challenges have you faced, and how have you overcome them?   Next time, we’ll explore how you achieve these goals through creating detailed strategic plans.   

Thank you,

Grace