7 Steps to Achieve Profitable Goals

BY Eddy Hood On Sep 25, 2018 With 1 Comment

You've tasked your entire leadership team with one goal this quarter: to create the most amazing HR manual ever! You're not sure why you're doing it, but large companies have one so you should to, right?!

After several meetings, 12 different drafts, and a few late nights Googling the legal prose, you step back and look at your creation, a binder full of responses to every HR situation imaginable.

You did it.

Your team accomplished something, but did your hard work make you more profitable?

The Law of Good, Better, and Best

profitable-goal-settingWhen you set goals, try to remember the law of good, better, and best. Building an HR manual may be a good goal for your company, but I guarantee there are several goals out there that are better, and one that is best. Why waste your time on good goals that will make slight improvements to your organization when you can complete the best goal and make massive leaps forward?

Here's an example:

  1. Good goal: Write an HR manual for your company.
  2. Better goal: Have an HR company write that manual while you create a better inventory tracking system to reduce waste in your business.
  3. Best goal: Hire an inventory expert to work with your company over the next 30 days to launch the inventory tracking platform and train your staff on how to manage inventory profitably. With all the money you'll save, you can get that HR company to write your manual for you.

Learn From Theodore Roosevelt

Theodore Rosevelt set out to change the world. He lived such a full life, one might say he was an achiever. He was a successful US President, the author of 35 books, winner of the Nobel Peace Prize, and he even facilitated the construction of the Panama Canal.

Here's what Teddy has to say about goals:

Keep your eyes on the stars and your feet on the ground.

He was a huge dreamer, and he could execute on those dreams. That's the difference between mediocre businesses and wildly successful ones - the CEO is more than just a dreamer, he or she can execute on them.

How to Execute Your Company Goals

As a business owner, your job is to turn a profit. My sense is that you're a goal setter. Most entrepreneurs are. before we get too deep into this, note that this framework comes from Measure What Matters by John Doerr. It's the same framework he took to the folks at Google when they were in their infancy. Larry Page and Sergey Brin took it to heart and Google stills thrives on it today.

It's the OKR system. OKR stands for Objectives and Key Results. It's a simple and effective execution system that John Doerr learned as a young man while working at Intel. His boss, Andy Grove, was the master creator of it all.

Let's learn from John before we look at the 7 steps.

 

 

 

Step #1: Create Your Quarterly Outcomes

profitable-goals-for-a-businessGo visit your leadership team right now and ask them what your company is trying to accomplish. Chances are, they'll each say something different or they'll give you a vague answer like, "We're trying to get more clients and be the best in the industry."

Most businesses don't know what they want. This one basic idea is so exciting to me. When a business takes the time to figure out what it wants, all of the sudden the leadership and staff get on the same page and we have a mission!

The first step in setting and achieving profitable goals is to determine what you want. This may take some time. Remember, you're in search of something better than a few good goals, you're looking for the best goals that will drive your company forward. That means possibly rewriting them several times and looking at them from different angles.

Mr. Doerr suggests that a company have no more than three to five key objectives a quarter and I whole-heartedly agree.

Step #2: Create Your Key Results

Let's use the goal we created above as an example:

Hire an inventory expert to work with your company over the next 30 days to launch the inventory tracking platform and train your staff on how to manage inventory profitably.

That's a great outcome for a business that has to do a lot if inventory accounting. The next step is to define three to five key results that you and your team must accomplish in order to reach your objective.

With any large objective, you could easily get bogged down in all the minute details that need to be checked off in order to achieve the outcome. Those little things are not Key Results. A Key Result is a major focus that must be achieved if the outcome is going to be a success.

Here are a few examples of things that would NOT BE key results for this outcome:

  1. Find a hotel for the inventory specialist to stay at while he or she is helping us.
  2. Sweep the warehouse floor before the specialist gets here so that the environment is clean and we can focus.
  3. Send out an email to all the staff reminding them of how important tracking inventory is.

As you can see, there are several "tasks" we could come up with that will overwhelm the team responsible for achieving this outcome. Instead, focus on three to five key results that move the needle in a powerful way.

make-profitable-goalsHere are some EXAMPLES OF REAL Key Results for our Objective:

  1. Work with our accountant and CFO to build a budget for the inventory expert, the new software packages, and the training materials by October 1st.
  2. Hire and book an inventory specialist that has experience in our industry and software by October 31st.
  3. Prepare the company to shut down for two days so that the staff can all attend the training and be fully invested by Nov 10th.
  4. Assign inventory captains on the team to oversee the quality of our system once the specialist has left By Nov 30th.
  5. Calendar a quarterly review of the inventory system for all leadership team to attend by Dec 15th.

Do you see how these items will actually move the company towards achieving its ultimate objective? Also note that these steps will cost money to complete, but in the long run, the company will experience greater profits due to tighter inventory management.

Step #3: Create Your Champion

Goals are set all the time. Few are executed upon. When more than one person is ultimately responsible for a goal, the buck gets passed and accountability falls short. Make sure to give your outcome a champion, someone in the company with the skillset and the drive to get it done.

This person is ultimately responsible for managing deadlines, resources, and the work produced. As the CEO, you're responsible for making sure they check in and update the team on their status.

Step #4: Create Your Monthly Review

Now go to your calendar and setup an recurring in-person review of all the Quarterly outcomes. Everyone connected to the outcomes must be invited to these meetings.

Do yourself and your team a favor and try to make these meetings efficient. Nobody wants to go to a four-hour meeting to hear Sally drone on about why she's falling behind on her outcome.

Step #5: Create Your Weekly Checkin

jell for profitable goals

At Ignite Spot, we do our weekly checkins online. We use a software tool called Jell to manage this. I don't think that you need to make this a major meeting. Just make sure that each person responsible for an outcome updates the team each week with their progress and needs.

Keep it simple, but make sure it happens. Business goals without weekly checkins are nothing more than a dead-end for uninspired conversations.

Step #6: Establish Your Goal Dashboard

Your team needs to be able to see how it's tracking with the outcomes. If you track these on paper and that paper sits on your desk, then your team is in the dark. Find some way to report progress in an open and transparent way so that everyone can stay connected.

Step #7: Celebrate

When you achieve a goal, do you celebrate or do you just move onto the next goal? Celebration is crucial to achieving future goals. When you do hit your mark, make sure to take time to celebrate as a team. Go out to dinner or hit the latest move on your lunch break next Wednesday.

Conclusion

Most goals aren't achieved. Of the ones that are, few drive profitability. As the CEO of your company, your job is to master the psychology of profitable goal setting and keep your thumb on it at all times. 

If all of your people are doing good work, but they're not working together, is anything really coming of it? My guess is that you feel like your team could accomplish a bit more with the right framework.

The 7 steps to profitable goal setting is simple. You're company will either grow or shrink this quarter; it's up to you how the future turns out.

 Feature Photo by Charles Deluvio 🇵🇭🇨🇦 on Unsplash

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My name is Eddy Hood. I've coached over 500 businesses on how to become more profitable. I'm the Founder & CEO of Ignite Spot, and I have mad parallel parking skills.

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