Goal setting is a skill that is as useful in business as it is in life. Goals direct your actions and inform your decisions. Goals define your success. If you’re thinking of trying your hand on e-commerce, goal setting is a necessary foundational skill to master before anything else. Read more to learn about why goal setting is vital in business.
What Goals Are
Most people are familiar with the concept of goals. Goals are statements of a desired result. They can either be short-term or long-term goals. Examples of goals in the context of business may look like these:
- To earn $20,000 in February
- To achieve 200 percent return of investment within six months
Although almost everyone knows what a goal is, not everyone is familiar with the concept of goal setting. There’s a rampant misunderstanding about what it means to set a goal and how to go about it. Most people know that setting goals is a good thing, but very few actually know how to do it well.
What Goals Should Be
Goals, at the minimum, should be SMART—specific, measurable, attainable, realistic, and time-bound. SMART goals set you up for success by establishing practical, quantitative, reasonable objectives down to the deadline.
But at the same time, your goals should also bear a challenge. Goals must excite you to tackle every new day with a little bit of light apprehension thrown in for good measure.
Goals must stimulate and inspire. Researchers at MIT coined a new acronym to accommodate this redefinition: FAST or frequently discussed, ambitious, specific, and transparent.
Taking these into consideration, goal setting should harness both elements of realism and creativity to determine a workable goal. It should also bring feedback into the fold, especially in collaborative environments.
The Importance of Setting Objectives in Business
Failure to set clear goals is one of the most common reasons businesses collapse. Without a solid cornerstone, your organization is headed toward disaster. Here are five practical reasons that espouse the importance of objective setting in a business enterprise.
Goals Define Your Success
To know if you succeeded, you must have something to aim for first. The first step of the goal-setting process is determining what success means to you and your business. Do you wish to double your profit next year? Perhaps complete the shift to sustainability within five years?
Success means different things to different people, and it’s the same in business. If you’re struggling to map your targets in the short term and long term, a good compass would be your corporate core values, mission, and vision. They will help you align what you want to achieve with what you believe.
Make sound goal judgments by writing OKRs (Objectives and Key Results). OKRs will help you identify what you want and get them down to the specifics. Writing OKRs will force you to ask: what does success look like?
Here are some examples of OKRs.
Objective: Improve my blog traffic as measured by:
Key Result: Getting 10 new unique visitors per day
Key Result: Getting less than 40 percent bounce rate per day
Objective: Increase my brand popularity as measured by:
Key Result: 50 percent more month-over-month engagement in Facebook by March
Key Result: 50 more followers by March
Having your target mapped out makes it easier for you to evaluate your success later on.
Goals Determine What to Prioritize
Trying to achieve everything at once is a recipe for disaster regardless of context. In business where resources are limited, not having clear priorities often results in burnout, or worse, profit loss and total failure. It’s at the expense of everything else when you try to do it all.
The importance of target setting in business is that it gives you a focal point to concentrate your efforts on. When you know exactly what you want to achieve, you also narrow down the set of actionable tasks that compete for your financial and attentional resources.
But not only that. When you have clear goals, it’s easier to identify the set of skills you need, the budget required, and the steps necessary to progress toward your goals.
Goals Keep Your Team Motivated
Having a sense of purpose is central to most people’s identity. Even though having a job in itself is something to be grateful for daily, having a strong “why” is necessary to feel motivated.
A clear goal for your business helps give your actions a sense of meaning and keeps you focused on the big picture. It gives your team a reason to work hard and put their 100 percent toward team effort. A team without proper guidance is a breeding ground for incompetence where people are content with doing the bare minimum.
An internalized goal and its completion give you and your team something to look forward to.
Having a motivated workforce also confers the following benefits:
- Low tardiness and absenteeism
- Low staff turnover
- Improved relations among team members
- Improved productivity and quality of work
Goals Help Solidify Teamwork
Collaboration is one of the biggest contributors to team success. Unfortunately, it’s also one of the most challenging to develop. People don’t automatically trust each other and this apprehension often results in communication issues that vitally jeopardize output.
Here is why goal setting is important in business. Having a singular goal encourages and incentivizes teams to work together and collaborate toward success, cementing teamwork and streamlining the delivery of results.
Additionally, the benefits of teamwork include the following:
- Fostering of creativity through discussions of ideas
- Boosting motivation of team morale by nurturing a culture of being “in this together”
- Encouraging team members to take healthy risks
- Learning faster through shared knowledge and feedback
- Relieving stress and promoting camaraderie
Goals Guide Your Decisions
In business, one decision can make or break your game. Hence why it’s important to have a thorough understanding of what you want to achieve and what results you want to see. Being clear on what’s essential informs every small and significant decision you will make.
Suppose your goal is to drive as much traffic as possible to your online store, but you have a limited budget and don’t even have starter knowledge about running online ads. You can choose to learn on your own, do the marketing yourself, and hope your efforts pay off as soon as possible. Or you can hire ad experts who know how to get the job done and get results now. Then, the question becomes, which one would be the wiser investment?
Decision making is a tricky road when you don’t have a view of the horizon. Having a well-defined goal clears out the fog and lets you see the path that best leads to the finish line.
Whether you’re a one-person team or working with a team of talents, having a goal to focus on is the essential starting point from which to base all your successive efforts. Goal setting is a means of helping you map out your process so you can think with clarity, decide wisely, and pursue success with confidence.