Many organisations fail to achieve their goals despite thorough planning sessions. Lack of understanding of market needs, macro changes, execution problems, and estimation issues can all play a part. However, there is another factor which influences goal planning but often goes unnoticed - optimism. 80% of us experience optimism bias. Founders tend to be a particularly optimistic bunch. You’d have to be considering that ~90% of startups fail. Optimism can at times be untethered from reality. Below is a framework to help identify if your/your team’s goals have crossed the fine line between optimism and delusion, and how to regain balance.
This isn’t a call to reduce ambition. Teams have been known to create great things fast. Velocity is a competitive advantage that should be fostered. The issue isn’t setting goals that challenge but rather setting ones that are unattainable. Consistently missing goals can have a negative impact on team morale, which studies have shown translates to reduced performance. When drafting goals we have an opportunity not only to set the direction of the organisation but to create a virtuous circle of positive momentum.
Framework
Let’s assume you have drafted your SMART goals, have clarity on the desired end state and have assigned a DRI for each. Below are 3 final “reality” checks to consider:
1.Honesty about the starting point
In our haste to reach the next milestone it can be easy to fudge over current issues and ignore the reality of our starting point. For example a sales team, no matter how talented, or ambitious their assigned targets, will be limited by the readiness of the product they're trying to sell. To ensure you/your team are setting goals from an accurate starting point, ask yourself:
Should you apply a “starting point discount”? If you’re starting with known weakness (e.g major product changes required to close deals, achieving goal dependent on future hire etc.) consider applying a “discount” to your goals to make them more achievable (e.g. sign 3 beta customers for new product vs close $10,000 MRR). Aim to focus on building towards long term objectives rather than optimising for short-term desires, unless absolutely required.
Are you trying to cross a chasm? If a goal requires leaping across multiple stages such as selling to a previously unpenetrated, more conservative buyer segment, or bringing a region from zero-to-one to blitzscaling in a single planning cycle, it is unlikely to be a success. There are of course exceptions, particularly in B2C where apps can go viral in days. However, most B2B products benefit from a more thoughtful scaling approach. Consider separating goals so that they only incorporate one maturity stage and taking an experimental “trying it out” approach when introducing goals types that have been unattempted to date.
2. Realism about resources
A team of 5 engineers are rarely given the opportunity to deliver the work of 5 engineers. Most workplaces are a sea of distraction that prevent people from being able to do their jobs. Stand-ups and coffee chats have their place, however, they do reduce the capacity of the team to do the work.
For example, imagine you have a team of 3 FTEs assigned to a project. You may have assumed that you have 3 x 100% of their working hours. This is not the case. Each person on your team will have some additional recurring company commitments (all-hands, 1:1s etc.) Assume this occupies 10% of their time. Conservatively each person will also lose ~5% of their time due to context switching between task types (the reality is likely a lot higher given how many interruptions we tend to experience in our working day). Your 3 * 100% team has now been reduced to 3 * 85% capacity. Now imagine each of these individuals are spread across multiple projects/commitments (this can happen “unofficially” as interviewing, new joiner onboarding, c-suite pet projects etc. get added to their calendars). The team’s capacity for any given goal/project begins to diminish rapidly. People can of course work additional hours, however, there is a limit past which that becomes productive for deep work.
Before signing off on goals, it’s worth asking yourself, are you being realistic about the amount of resources you have? Do you have a 3 * 85% team or a 3 * 25% team in place? How does this alter expected outcomes?
3.Understanding of controllability
For each goal review how much of attaining the goal is reliant on factors that are fully or partially outside of your company’s control. The speed of your sales cycle will often be limited by your customer’s internal company dynamics. It is unlikely you can (legally) speed up your request for a regulatory licence. A key new hire’s notice period is unlikely to disappear. When reviewing your goals ask yourself how much are you relying on the “best case scenario” playing out to achieve them? If the goals are based on consistent fortuitous outcomes it is likely you have crossed the boundary from optimism into delusion. It may be worth making them more conservative.
How to Use
There is no one size approach for setting goals as their outcomes are context dependent. Teams can achieve an extraordinary amount in a short time frame with the right conditions in place. The aim of this framework isn’t to curtail ambition but rather to ensure that teams are being set up for success. There is usually a limit as to how far anything can be stretched. However that limit may be further away than you think with the right preparation.
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