Goal setting is your chance to decide what you want.

Goal setting does not require a magic formula. It is not difficult. And, it should not be limiting. But, it does take vision. It also takes the ability to see and describe what you want.

goal-setting

Problem solving in business assumes the need to close a gap in performance. To close the gap, you need to know where you are. More importantly, you need to know where you want to be.

A well-defined problem gives a description of who, what, when, and where something is happening. The problem statement hopefully describes what the effect is, how it feels, and why it is an important part of the business.

In all cases, the story of the gap in performance can be told with numbers. Cost, delivery, quality, employee satisfaction and customer satisfaction are key performance indicators for every business. Every issue can be described terms of gaps in these indicators. And every attempt at goal setting should address these gaps.

It is important to figure out up front how success of your problem-solving efforts are going to be measured. Effective goal setting will answer this question.

  • If expenses are 10% over budget, set a goal to decrease expenses by 10%.
  • If revenue is down by $10,000 per month, set a goal to increase revenue by $10,000 per month.
  • If customer complaints are up by 10%, set a goal to improve customer satisfaction by 10%.

There are obviously a few assumptions in these examples. The first assumption is that this stuff is being measured. The second is that you are not jumping to conclusions about cause. The third is that you will perform root cause analysis to figure out why these results are being produced.

Good goals provide guidance and decision-making criteria. Once the goal is set, decisions can be made to move your business to the goal. With a good reference point provided by the goal it becomes obvious if progress is not being made. It is also clear if the goal is being exceeded (time to set a new goal).

As you study the problem and learn more, the goal can always be refined. For example, as you study to figure out why revenue is low, you will learn more about the potential to acheive results. Then the goal can be re-written to say: Increase revenue by $10,000 per month within 3 months.

Finally, because goals provide guidance, be careful not to confuse goals with solutions. Also be careful not to include solutions in your goals. For example, a goal that says, "Increase revenue by $10,000 per month through better advertising" assumes your advertising is the root cause and crushes any potential innovation and brainstorming that might have occured. What about billing, or pricing, or customer loyalty.

Let goal setting help you innovate. At the goal setting stage of problem solving, better results will be acheived if the goal is defined as a destination and not a route.

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