A longstanding mantra for successful business planning is to create specific goals. However, there is such a thing as being overly specific in your goals to the detriment of other things that matter to you. I want to talk about how adding fuzziness to specific goals can make your business planning strategies more fulfilling.
Analytics vs. Eye Test
In the world of sports, there’s often great debate between the value of analytics versus the eye test. Analytics often provide hard, quantitative evidence of performance, while the eye test relies on intuitive, qualitative evidence about performance.
Business planning is similar. For example, the analytics might tell you to send your top salesperson to close an important deal because she has good closing numbers. But the eye test—your raw observations and intuition—might tell you to send a junior salesperson because she has already built a relationship with the customer’s decision makers.
Focusing solely on either analytics or the eye test can lead to unintended consequences.
Consequences of Being Too Specific or Fuzzy
Say you have specific goals that include selling your business to a third party within five years for $50 million. You do everything you can to achieve it, only to find that you had to lay off most of your workforce, including your business-active children. Doing something like this could damage your legacy or worse, leave you very wealthy but very lonely.
Similarly, if you only focus on the eye test, you may create goals that are too fuzzy to achieve. For example, you may personally like and have faith in an executive you hired soon after starting your business because she has great raw talent. But as years pass, that executive doesn’t develop that talent into a systematic and repeatable method for success. Having blind faith that that executive will improve can make it much more difficult to achieve your specific goals.
In short, focusing only on one kind of goal over another can lead to dissatisfaction, disappointment, and a business plan that doesn’t do what you want it to.
Resolving the Differences
The key is to marry your specific goals with an element of fuzziness. For example, it’s wise to have a specific timeline for achieving goals to avoid 11th-hour rushes. But equally important is considering how you achieve those goals with the people and processes that make your business run.
One way to begin this process is to ask two important questions.
1. What do I need to achieve success?
2. What do I need to feel like a success?
In business planning, financial independence is a measure of achieving success. However, the second question is a continuation of that idea that asks, “At what cost?”
Trying to combine the quantitative measurements of success with the qualitative measure of what makes you feel like a success might create conflicting goals. That’s OK.
It’s OK because it’s up to you and your most trusted advisors to determine the best way to resolve any conflicting goals. This is why it’s important to not be afraid to have goals that don’t seem to line up.
Perhaps an effective way to develop and implement a strong plan for a successful future of your business (and your ownership of it) might be:
1. Write your goals down, especially if you have conflicting goals
2. Share your goals with your trusted advisors to keep them top of mind
3. In every planning meeting, ask your advisors, “What do you think is the best way for me to achieve these conflicting goals?
Planning isn’t about having all the answers—it’s about finding the answers to provide you with the most fulfilling future for yourself, both personally and professionally. Thinking through both specific and fuzzy issues can help provide you with context and texture in your plan, making it more dimensional, and improving the chances that you’ll be happy with your outcomes.
We strive to help business owners identify and prioritize their objectives with respect to their business, their employees, and their family. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, we’d be happy to sit down and talk with you. Please feel free to contact us at your convenience.
| The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial professional. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial professional. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity. |
