Better Business on Purpose

Podcast

Fractured 2 Visions Scale Business

Episode 2: How to Use Strategy – Utilizing Targets

In this episode, we demystify what it means to set targets for your strategic initiatives and how you can correctly tune those targets to increase the chances that you accomplish your business goals. Yates and Butler tie into target setting the elusive human side of business with thoughts on rest, inspiration, and gut feel.

 
Strategic Management Society Member
Organization Development Network Member
Insights Association Member
 

Transcript

This podcast is presented by Mission & Fields, consulting and coaching to take your business to the next level. The “Better Business on Purpose” podcast exists to spur you on in pursuing the deeper questions related to leading a business, questions that require the interaction of strategy and identity.

– Hello, this is your host, Yates Jarvis. Here with me, yet again, thank god, is Butler Stoudenmeyer. Butler, how you doing today?

– I’m good, Yates. I’m happy to be here with ya.

– Awesome. Well, real quick, let’s go through some of the things that we wanna talk about today. We are still in a miniseries on how strategy could be used to grow our businesses. Last time, we talked about planning versus reacting. We will have many inside jokes around feral cats. Today, I think we’re talking about a little different angle of the planning and reacting. What did you want to zoom in on today?

– Yeah, we are somewhat diving into the planning section of things and talking about targets, so planning ahead, looking forward, saying, “What do we wanna achieve this year, “in the next three years, five years, “whatever the time frame might be, “and what does that look like if we actually do that?”

– Wow, targets. They are so, they’re more important than we treat them, and they are unbelievable tools. I think targets, it sounds like something you do. I set a target, set a target. It sounds like this static thing, this thing you do and it doesn’t mean much, you know?

– It also sounds like what do you mean I have to set a target? I’m trying to do my work today that I actually need to do. I can’t even think about that yet.

– Right, and why would you ask me to try to predict the future, because the future’s crazy. I don’t know. I don’t know what we’re gonna do in sales. I don’t know what we’re gonna, you know, just let me do my job. Isn’t that what you want me to do?

– Yep.

– Yeah, well, fortunately for a business, targets can be used in such a more life-giving way for everyone that has them, and for the strategy, to bring the strategy to life. Targets are so important. I guess there’s a lot of different angles we could talk about with targets. Let’s start with some of your experience, Butler. Do you feel like, in the past, you’ve worked for a number of organizations, some in the hundred-person range, some in the thousands, have targets been conservative? Or have they been like big, hairy, audacious numbers? How have people used targets? Are they aspirational, or do they seem more safe where you’ve experienced them?

– Yeah, it’s interesting, when you asked that question, I thought of a dynamic I haven’t thought of before, which is I was in an organization that was about 10,000 people, so very big. Now I’m in an organization around 100. When I was in that organization with about 10,000, we were very goal-oriented and target-heavy. But those targets were not that aggressive. They were more so figures that, yeah, this is what I think we can do, and people would back into them based on what they already knew was going to happen, but it wasn’t anything that was driving performance to the next level. It was just, yeah, this is what I can do next year safely, so that I can speak well for my department and perhaps get a raise. In the organization that I’m in currently, we didn’t really have any kind of goal-setting or target methodology prior to me coming in. I think I brought some of that experience from the large organization, and it’s interesting. Despite not having a lot of experience with it, I would say in this smaller organization, they are more aggressive and they’re much more aspirational, so I don’t know. I haven’t really thought about it. There may be something to do with the size, or it may just be the fact that we aren’t so exhausted and burnt out on using targets for a large place, that we actually thought about them correctly and did some smart work.

– Right, that’s interesting to think about that. If you’re a consultant trying to help an organization use targets properly, it is important to think about the prior cultural reality to how people have experienced targets. Even the language, you know? Some words you just can’t use until you completely reframe them around trust, because the words have been so misused, so language is important in that, so even just the word target. But then, when it comes to targets being ineffective, you have to know that that’s the past you’re working with, so that is an important note to think about. What do you think is the danger, because it sounds like, when we’re setting a target conservatively, it’s like a win-win, you know? I’ll hit my goal, which is great. If the company’s good with that target, then it’s a win for them and it keeps my people from being stressed out, you know, hitting this crazy target. So it sounds kind of like an innocent thing to do, to kinda set your targets conservatively and to pad them to increase your chances of actually hitting them, right? It’s safe for you as well. What do you think is the danger to an organization in having a bunch of padded, conservative targets?

– I think it raises the question, what are we here for? What are we doing? Because I think about, if you really wanna change something, you need to be striving for something big, and as you said, you know, big, audacious, hairy. It needs to be something that can motivate and inspire, because we’re actually here to change our community, to change the world, to change whatever that environment might be, and you’re not gonna do that by saying, “We just wanna move the ball an inch, “because we know we can do it.” You know, okay, so maybe you say you wanna move the ball 50 yards, and you only move it 10 yards, but at least you moved it a lot further than you would have had you moved it an inch.

– Yeah, I’m just picturing the human element of all of this. You know, you’re talking about inspirational, a target being inspirational, and usually we think of them as something that bring fear if they’re too high. You know, the company lifted it again, incredibly high, and sales positions, that’s kind of the status quo, and targets are not exciting things. But when used properly and tied to strategy, it really can be inspirational, you know? When you imagine your perfect job, I think, depending on the journey that you’ve been on, you may imagine a cushy job where nothing much happens and you go and you check in, and maybe that’s because life has been sporadic and chaotic for you. Maybe that’s because business has been sporadic and chaotic for you and you feel like you need to rest. Rest doesn’t come in boring, uninspired work.

– No.

– Rest doesn’t come in having low expectations around you. Rest comes from a completely different place, and business doesn’t own rest. You own rest. So, that’s an important thing to keep in mind. When we’re thinking about the human element of this, study after study has shown that people want purpose in business. They want to be inspired. They want to go tackle something. They want to achieve something together as a team, something real and meaningful. And so, that is an important part of this, especially if the targets are relatable and they understand how they’re gonna make an impact to the business and to the world. But when those targets aren’t connected to a purpose or a vision for the organization, I think then it’s really difficult, because the company’s asking for this authentic and passionate reaction to the targets, but instead, what they get might be something that’s more lackluster.

– Yeah, and it’s critical. It is a critical role of the leader not to just set a target and then say, “Okay,” but you have to then actually come alongside the team and find out what motivates them, because like you said, maybe somebody is just kind of wanting to fly under the radar and have a stable moment in their life. If that’s the case, figure out a way to say, “This is what we’re trying to do this year “and this is how it speaks to your need.” You gotta be communicating that inspirational message of this is where we’re trying to go, and now, this is how we’re gonna get there and this is what it means for you and for what we’re trying to do.

– That’s interesting. You know, kind of that idea of being an interpreter of the strategy and of the target, back down to everyday life, that really smacks of what we talked about in the last episode around planning versus reacting, and how the two are married and how planning can help equip and make more purposeful reactions to the reactionary, and how to navigate those decisions and conversations.

– Yep, and I think, along those same lines, we talked about the danger of setting a target too far out there, something that people may burn out on. There’s no easy win, there’s no low-hanging fruit. That’s another aspect of it. You need to break that target down into smaller chunks, and that way, you can keep people motivated, keep people moving, celebrate those wins, and get it much more down to a granular level kind of in that reactionary world.

– Right, okay, so you’re talking about really strategic planning here, so you’re going, “Hey, at a strategy level, “it’s great that we set these targets,” you know, increase by three million, 300%, whatever, but there’s an important next step, which is contextualizing the strategy through strategic planning to really build the stepping stones for an organization, and even for individual employees to understand how they play a very specific, real part in helping to achieve those targets.

– Yep, you are not going to achieve your strategy without the buy-in and the created shared vision for your team.

– Well, there’s one other thing I wanted to talk about around the danger of not setting targets high enough, and that’s that an organization will be limited in their ability to invest in a bunch of padded, conservative targets, you know? If we’re only expecting to achieve X percentage increase, you’re only gonna get that much time and money to do so, and the danger with that is, if it’s strategically important that you achieve more than that more rapidly, then these conservative padded targets will rob the organization from putting its money and its time and its focus exactly where it needs to be putting its money right now, and that’s a precise activity for many organizations that has to occur with laser precision and with force and strength of investment and focus of investment. And any organization will tell you that, or any executive will tell you that, if they’ve gone through a company closing its doors. I don’t know what the stats are on how often that occurs. You know, there’s stats on the number of companies that survive after startup, after five, 10 years, that sort of thing, but if you’ve ever lived through a company aiming in one direction, the world changing, and then the company never pivoted fast enough and it closed its doors, that’s a company that absolutely experienced not being able to invest at the right pace and strength in the areas that they needed to, that even might have looked crazy. And in that moment, what they need are executives in those key areas to be able to extend those targets into places that look crazy at the time, but are necessary for the survival of the business, and I think that’s something that is such an important part or strategy and with setting targets, is that they represent the executive’s perspective about what it’s gonna take to not only thrive or to be a good place to work, but to achieve a bigger vision of impact, and ultimately, to survive the year and the next five years and the next 10 years. And that’s just a perspective that, if an executive doesn’t take, who is gonna be likely to take that perspective within the business with everything else they have going on?

– Yep, and I think it’s a great point, too, that part of that is saying no to other things, and it’s limiting resources flowing into one area of the organization to focus on those things that are going to allow the organization to survive and thrive. I was thinking, as you were speaking about, I think it’s Warren Buffett has a saying about, “Write down the list of things you need to do “and then cross off all but the top three, “and only focus on those three.” It might be a little narrow and tunnel-vision, but it gets across the point that, if you’ve identified the absolute top three things you need to be doing, number one, why wouldn’t you be doing those to the fullest and to the almost extreme? And then, number two, why would you be throwing your resources, that are so scarce and precious, at other things? Yeah, you gotta keep the lights on and you have to keep things operationally working, but as far as investment in the future, focus on those top items.

– Yeah. One last encouragement that I would have is, when you set targets, let them live on, not just in strategic planning, which is a lot, not just in how you manage the reactive moments, which is a lot, but also in meetings. You know, we are definitely in an age of meeting overkill, and it doesn’t even have to be a meeting. It could be a report. If people actually check email and read reports and that sort of thing, and you can get your team onboard to be responsible for it, but the idea is that those targets and the performance against the targets should be an ongoing, public, as public as possible. I don’t mean public to your customers, but public within the organization, that people can see how the organization is moving towards or against those targets, even if it’s scary and even if you need context. There’s the fear that we don’t wanna report on targets until we’re actually able to meet them or until we have significant progress, or until the story is more accurate to what the story really is. You know, if we show numbers this quarter, it’s not representative of all the things that we have done that are in the works, and it could scare people and think that we aren’t doing a good job. That conversation needs to happen, and ultimately, what we’re valuing when we say to make those targets visible and the performance against them visible, what we’re valuing isn’t just transparency for the sake of it. It’s transparency for the sake of developing a context among the human beings as to where we are and what it takes to be where we are, and that’s a soft skill that’s developed when you have access to data. And so, when you can see the data and feel, over the course of a year or two, of seeing the metrics, seeing the benchmarks, seeing the performance, and talking about what’s moving it up and down, you’re building a capability of understanding the activities that go into moving the levers that you think are most important, because you shouldn’t be setting targets on levers that aren’t important for the organization. So, there’s this other skill set for an organization of building a gut feel around what works and doesn’t work, and if you don’t publicize performance against a target, regardless of the context of that, then you’re robbing the opportunity for others to get attuned to affecting a target.

– Yeah, and it sets accountability for all levels of the organization, and I don’t mean some kind of negative, if you don’t do this, then here’s the consequence, but just accountability in terms of we know what we need to do. Now, let’s see how we’re doing against that target, which I know we have accountability coming up in a few episodes, so that’s all I’ll say on that for now, but it’s crucial to the success, and really, to the wellbeing of the organization, because people want to know how they’re doing and how the organization is doing.

– Love it. Love it. Thank you again for listening to the “Better Business on Purpose” podcast. We hope that this content is gonna help you take a better look at your business, and to answer some questions for your business that could help it improve. In the next episode, we’ll be looking at focus and prioritization, and how those two tools can be used with strategy. If you have any questions, please send us an email at bbop@missionandfields.com. We look forward to talking again soon. Goodbye, now.