How To Set Business Goals Correctly – Business Fixer Podcast 004

In This Episode You Will Discover

About The Business Fixer Podcast

Hosted by Haroon Rashid, the Business Fixer Podcast is for any business owner who wants to know how to get from A to B in the simplest possible way. This business podcast is full of business tips including leadership, sales, marketing, finance, culture and much more. Does something need fixing in your business? Don’t know where to begin with your startup, grow or turn around your business? Whether you’re a startup, established business or a multimillion-pound business, the Business Fixer podcast will help you understand where you are, clearly define where you want to be and guide you on the road to get there.

SHOW NOTES

[BOOK] ‘4 Disciplines of Execution by Franking Covey

TRANSCRIPTION

Hey sports fans and welcome to the Business Fixer podcast where we believe that clarity is king and simplicity is queen. I am your host Haroon Rashid, and today is episode four, where we’re going to be talking about how to set goals correctly. I’m really excited to share this one with you. You know, I’m going to share with you a goal setting formula that I have implemented in multimillion pound business turnarounds, high growth businesses, and startups. And it has worked every single time. Now I know what you might be thinking. I know you might be thinking well, Haroon, I know how to set goals. I’ve bought the books. I have been on the training courses, et cetera, et cetera. But you would be surprised at how many directors, senior leadership team people, very highly accomplished people, I have had to teach this too because their businesses were in a state of disarray. And actually there’s two issues that happened when it comes to goal setting, in my opinion. And the thing that causes the issue in the first place – number one, Is that there is a lack of clarity. You remember at the top of the show, I said, I believe that clarity is king.

So when you don’t have clarity around your goals, it causes confusion. We can’t have that. The second reason, I think things don’t, um, goals don’t get achieved is because no, one’s actually implementing them. You know, applied knowledge is power. So you might know that, okay, I’m overweight at the moment. You know, we’ve all put on a bit of weight because of lockdown.

I’ve put on a bit of weight. I’m aware of that. Um, okay. So now I need to, uh, I’m going to set myself a goal to lose one stone. Now, if you don’t do anything. It’s still going to be the same way, or even put some more weights on, you have to actually implement the goal. You have to exercise, you have to eat right. Et cetera, et cetera, et cetera. So what I’m going to talk you through is something that comes from a great book. And I really recommend you get your hands on this. It’s called the ‘Four Disciplines of Execution’ by the Franklin Covey Institute. Now go over to businessfixer.co.uk and look at the show notes and you’ll be able to find a link over there and download it.

Uh, but I really, really recommend you get this book. And in, in principle, look, there’s four. Um, four things you need to do to execute, uh, any kind of initiative. And I’m just going to go through the first one, which is all around the goal setting formula. Now you could know how to set goals. That’s fine, but the book argues the point and I agree that I, you setting the right goals.

I haven’t run out of things to say, I’m just kind of pausing for effect. I hope you liked it, but are you setting the right goals? So let’s do an example of a business turnaround. Now, when I go into a business turnaround, one of the things I’ll do is I’ll say, okay, What’s the things that we could do to turn things around.

And it might be the directors, the senior leadership team, whatever, but they’ll do a brainstorming session and you might come up with 20 things yeah. That you could do to turn around that business. Now here’s the problem. You can’t fix everything at once. You’ve got 20 things on the list. You can’t do them all.

Um, if you do try, you’re going to eventually drop a ball or you’re going to get burned out. And neither of those is good. So here’s the thing that I like to ask, which is out of these 20 things, what are the three things that are going to add the most value? If we get those fixed. What are the most important things right now.

And that’s what the book goes into. It says that everything is quote unquote urgent, but not everything is important. And that is the key. You might be working on things that are classed as urgent quotes and quotes, but you might not be working on important things. Yes. We know there are things going wrong, but they are always going to be there no matter what, the way to fix things properly or to get growth or to start up your business is to work on the important things.

So not all goals are created equally would seem. Some of these goals are wildly important and that’s what the, uh, the book goes into. It calls these the wildly important goals or the wigs, if you will. So when are you going to ask this question? Now you get a new perspective. You start attacking high value activities.

These are the important things. These are the things that if you get these things right, They’re going to make a massive impact in your business. They’re going to impact the bottom line. They’re going to impact revenue, whatever it is, it might impact culture who knows, but stop, take a breath, look, all the things that need fixing and force yourself to pick the, the few highest value items on that list and be objective about it.

Now, how do you set goals? What’s the goal setting formula, according to this book. So here it goes:

Move X to Y by when. Told you, it was simple. So move X to Y by when. So let’s look at this, let’s break it down a bit more. 

So move. That’s the first word we have to always move something. It has to be a verb. It’s a doing word. Okay. So goals have to have some kind of movement. So these are going to be words like increase, decrease, secure, obtain, whatever, but whatever that word, whatever that word is, it is a verb. You’ve got to start with the verb. Okay. Next bit in the formula – and a, by the way, I’m going to put this formula in the show notes so you can see it.

Uh, but the next part is X. So this is your starting point. You’d be surprised how many senior people don’t know the numbers, even in a business turnaround. So. For example, what’s your expense base? What’s your human capital costs. What’s your average EBITDA for the year. What’s your customer closure rates. What’s the number of returns per month. What’s your average carriage cost per month, et cetera, et cetera. Do you get the point? So if you’re trying to improve something. Then you need to know what X is. i.e what’s the starting point. So again, if I’m going back to the, uh, losing weights analogy, if you’re trying to lose weight, don’t you need to know your starting point.

How much do I weigh right now? Get your starting point. Next is Y. So Y – this is the goal. This is where you want to get to whatever your wildly important goal is. This is what you’re trying to achieve. This needs to be sensible, reasonable, and achievable. So don’t get in the habit of setting unrealistic or unachievable goals that does, that’s not going to help you.

It’s not going to help anybody. It’s just going to make you broke, busted and disgusted. You don’t want that. So the, the last thing is by when. What’s the date. If your goal doesn’t have a deadline, then you are wasting time. Deadlines ensure there’s sufficient movement. Everybody’s working towards that deadline and deadlines bring movement.

I’m telling you otherwise it just, you start off. Well, it kind of trickles off and disappears into the ether. You don’t want that. So look using this formula. Move X to Y by when let’s have a look at some good examples of what these might look like. So if I use a failing exam, a failing business, or a business turnaround, again, as an example, let’s have a look at what these might be.

So these might be things like decrease human capital costs from 200,000 to 150,000 by the 31st of September, 2021. Another one might be increase gross profit margin from 30% to 36%. By the end of quarter three, another one might be increase suppliers from 10 to 15 by the end of the financial year. So can you see what we’re doing here?

We are moving an X to a Y by a certain date. Do you get the idea? So what I would do if I were you, the next actions would be choose your wildly important goals. Get three to five to start with. Don’t get too many, but just choose around about three to five and then using the formula move X to Y by when craft a goal for each one.

Lastly. Get to work. There you have it. I hope you’ve enjoyed this episode of the business fixer podcast. Remember to visit us online on businessfixer.co.uk where you can check out the show notes. You can check out previous podcast episodes. Remember you can subscribe to us on Apple Podcasts, Google Play, and Podbeam.

So please do give us a like, and subscribe. It really helps the show out until then see you next time, sports fans.