Football fans will probably recognize the saying “offense sells tickets; defense wins championships.” In the game of finance, offense is the ability to make more money while defense is all about how money is managed. So the question is, in the game of finance, does offense or defense matter more? Turns out that to win football championships, as well as finance, you need to be good at both offense and defense. Much like football, if you want to increase the money your business makes, as well as learn how to keep it, you have to know the rules, have a strategy and play both offense and defense to win your financial game.
In our last post, What’s Your Long-Term Goal? Get Everyone On the Same Page, our most recent in our series from Traction: Get a Grip on Your Business by Gino Wickman, we discussed that having a long-term goal is essential for keeping your team moving in the same direction.
However, once you know what you want to accomplish over the long term, it’s important to know the steps you’ll take to meet that overarching goal. Interim goals provide checkpoints along the way to help you measure and re-evaluate your progress at regular intervals.
Setting interim 3- and 1-year goals
The value in short-term goals is they allow you to see goal progress and make operational corrections when necessary. Setting goals for 3-year and 1-year intervals provides a way to guide both strategy and tactics for meeting your long-term goal.
A 3-year goal is strategic in nature.
- Break down your 10-year goal into measurable milestones. A lot can happen over the course of 10 years, so you’ll want to have your team working with hard data about your company and your market.
- Use realistic numbers, and keep your ranges narrow. Revenue of between “$10 million and $25 million” is too broad. Work closely with your team and your data to see if you can find a specific, realistic, single number for your interim time frame.
- Be sure to explore and put down on paper what the organization will look like when you hit those numbers, too.
With a 3-year goal in front of you, it’s easier to determine the tactical steps you’ll need to take — your 1-year goals.
- Beware of trying to accomplish too much in a single year. If you set too many objectives, you’ll end up accomplishing very little.
- Keep your data handy and decide on your immediate revenue and profit goals — and how you will measure your progress.
- Be specific. “Improve customer satisfaction” is a wish, not a goal. Instead, specify: “Improve customer ratings to a 9 out of 10.”
- Be sure you have a realistic budget to support your initiatives.
- Revisit and reprioritize initiatives every 90 days.
In our Traction blog series, we’re exploring how to create a clear vision for your business. Inspired and guided by the concepts in the book Traction: Get a Grip on Your Business by Gino Wickman, these blogs will walk you through essential steps that will enable you to get traction, grow, and thrive.
To read the entire series, visit our blog page.
Short-term goals are energizing because they not only create a focus, but they also create clear steps to take. Now your team will be ready to roll up their sleeves and get to work!
When entrepreneurs get excited about serving their customers, it’s easy to fall into the trap of chasing new “shiny things.” A customer wants you to add an extra service. An investor gives you an idea for a cool side business. Your sales team thinks of a potential new market.
But when those shiny things are not aligned with your core focus, you’ve lost traction. Anytime you waver from your core focus, you pull attention and energy away from your business purpose.
Core focus often gets interpreted as your mission statement or vision statement, but it’s really defined as your reason for being — your niche. Your job as the leader of your organization is to establish your organization’s core focus and not let anything distract you, or anyone on your team, from that focus.
You know your company is straying from its core focus when:
- You are attracting new prospects daily but are having trouble turning them into paying clients.
- Your clients have few, if any, commonalities between them — they all look and behave differently.
- Your team has too many projects on their plates and those projects have little to do with the established focus.
These are all signs that your team is confused about the core focus of the organization. It’s important to decide what business you are in and then be in that business. Once you know your core focus, stay there.
In the book Traction: Get a Grip on Your Business, by Gino Wickman, the author lays out exactly two questions that you and your leadership team must be able to answer to ensure that your business’ core focus is crystal clear:
- 1. Why does your company exist?
- 2. What is your organization’s niche?
Working out why you exist
To define your core focus, assemble your leadership team and have each person write a response to the first question. No matter what responses you get, you’re likely to learn an awful lot about what your team thinks the organization is all about.
Gather all the responses and post them on one big board so everyone can see them at once. Somewhere behind those mixed answers is your core focus and you’ve got to dig it out.
Defining your special niche
Once you have settled on why you exist, ask the second question. With the first question behind you, this one seems like it should be easier — but don’t be too surprised if it’s harder. After all, you’re doing this because the core focus is not clear.
Finally, take the time to conduct an involved group discussion to weed out, refine, and revise the answers until you have a single core focus that everyone understands.
Once your core focus is clear, you’ll notice that your people will have a much better idea how they should be spending their time. Distractions that are not part of your core focus are easier to identify and send packing. With all eyes on your single focus, your business can begin to really gain traction.
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