|—||David Pogue, 2010|
Many personal development books or courses teach us to always aim high when setting a goal. The reason being even if we fail in achieving this ‘high goal’, we would still achieve more/higher than we would have if we haven’t have such aggressive target. But is this really a good business practice, and what is the impact of it on business strategy?
First of all, I do agree that we need to set an aggressive target for ourselves, especially in business. Setting a goal that is so easy to get to, like a low hanging fruit, often time means we set ourselves up for failure. Our competitions would have set themselves up for something more aggressive, and in a long run, rendering those who are not aggressive (low aiming) irrelevant in the market space.
Secondly, as goal is the corner stone for our strategy, and most of the time, a company do not put in place a strategy to achieve a ‘normal performance’. As such, aggressive goal would help to stretch people’s imagination and commitment in setting, and implementing strategy.
However, I do believe there are time where some companies take this mantra too far, ended up setting unrealistic goal for the organization. Even worse, the compensation is normally tied to these aggressive goal. After a few tries, people will learn to give up on the goal, the strategy and the company.
The challenge for a good leader, a good strategist is to achieve the fine balance in setting a goal that is aggressive, high enough that you have to stand on your toe and may even jump real hard to reach; and at the same time, get the buy in from the people.
One must realize tools, resources and rewards should in be accordance to achievement. If a particular business leader sets an aggressive sales target, at the same time do not improve on critical competitiveness aspect of the business such as new product and aggressive pricing, than the goal, and the strategy is basically nothing but a big joke (on the leader). Can you imagine if those marines at the Normandy beach were asked to fight with nothing but their bare hands, with no back up support, and the only reward if they win is they get to live for another day?
A good goal must be aggressive, must stretch people’s commitment and imagination, must beat the competition (if there is any). However, it should not be a self defeating goal. So is the strategy that follows.
P.S. A lot of business organization believes that setting aggressive goals translate to setting aggressive sales targets. While that is definitely the aim (for sales organization), but customer orders do not happen just by setting a goal. In fact, sales revenue is more like the result of what the business organization does, a basic cause and effect relationship. Therefore it is probably more critical to identify the causes that need to happen for the desired effects, and set goal on those causes.
May be the question should be why does a strategy need a well defined goal?
In modern days, we hardly have strategy that can be executed by one single individual. In fact, most strategies are for organization, or at least a group of people. A well defined goal allows each and everyone involved to understand the objective of the whole play. Without a well defined goal, people might get confused and frustrated as they have no idea what they are doing, and eventually might ended up giving up on continuous execution. To the very least, this will reduce the efficiency of the execution.
A well defined goal comprises of three characteristics:
- Acceptable by everyone in the group/organization
- Spelled out in a common language that the every individual within the group/organization can understand. In addition, the choice of words should be precise to avoid any grey areas and confusions.
- Communicated to everyone within the organization. There is no point to have a goal that no one knows about.
As goal sets the foundation of any good strategy, a well defined goal that is clearly accepted, understood and communicated within the organization would increase the execution efficiency and effectiveness of such strategy, ultimately increase its success chance.
Most people work in an organization today, be it a commercial, non profit, or government organization. In fact, an organization is made up of individuals, working together to achieve a certain goal, or goals.
However, it is important to realize that not all individual share the same vision of the organization goal(s), and chances are these individuals have their own goal(s). Working for the organization is only a mean to achieve these goal(s) for the individuals. On the other hand, the organization needs the skill and effort of the individuals in order to achieve its own goals.
Starbuck’s goal might be to serve the best coffee to its customer and make profit along the process.
A particular Starbuck’s employee’s goal might be to work and earn enough money to buy himself/herself a car within the next 2 years.
The relationship between an organization and the individuals within it can be categorized as an Equivalent Exchange of Value. Both gets what it wants by giving what the other party needs. This relationship only work when the wants and needs (or the goals) of both side does not conflict with each other.
Understanding this relationship is important in Strategy Planning, as human nature and behavior under pressure should be accounted for. Remember the rules of “Every man for himself” (or we can say “Every woman for herself”, I suppose). Unless under certain extreme situation, an individual of an organization would not die (or work too hard) for the company, nor the strategy that the company want to put in place.
Failing to recognize this might risk one putting up a strategy that only work on paper. The strategy needs to take into consideration of Equivalent Exchange of Value for all who involve.
While goals in general is an end point of a progress, some of them (in fact in modern days, most of them) do have a timing element of it. In other words, the goal is of relevance if it is achieved within a certain timeframe.
Example 1. Scoring in a game within the official game time. One second too late and it does not matter anymore.
Example 2. Achieving a revenue/market share target within the quarter. If the sales happened the very next day, it does not count.
The key reason why goal is timing oriented is due to the simple fact that time is a finite and scarce resources to an individual. As a result, individuals (that form the society) impose time limit on many of their activities. Education that has to be completed within 3 years, accounting report has to be prepared at the end of quarter, even to retire by a certain age.
As the most important element of a strategy is to have a clearly defined goal. Since the goal has a timing element in it, so does strategy. A strategy that helps to achieve a certain objective after the stipulated time frame, is not a strategy at all, and should not be adopted under normal situation.
So, start a strategy planning by knowing your goal, and knowing the ‘deadline’ of your goal.
May be it was my job, or my choice of doing an MBA, which got me surrounded by all business minded professionals, I have come across the term “Strategy” or “Strategic” almost on a daily basis. I hear it in discussions, meetings, presentations, lectures, read it in books, magazines, websites, news, and I even have to write it in my papers and reports.
"Why do you think we should give so much discount to this customer of yours?" My boss lowered his glasses, stared into my eyes as though he was trying to pierce through my soul.
"It’s a strategic customer.” I said this with a straight face that would have won me the world poker championship.
My boss looked down on the report again, tapping the table with his index finger as though he was considering. Then he finally looked up, again staring into my eyes.
"OK. Go ahead." He said, slowly and reluctantly.
The term "Strategic" is truly magical, just like “Abracadabra” in the past. It gets you the attention you need, the approval you seek, and it even helps you score in your exam (hopefully).
Some people engage in a competitive situation with their mind full of tactics but no strategy. These people often lost sight on the big picture. They may win their fight, but often cause the company to lost in the war.
How could winning result in a lost?
Well, it has everything to do with resources. A proper strategy should minimize the resources involved in any single battle (whether winning or losing), and making sure resources are put into where it matters (in other words, where you can win).
In 203 B.C. (or there about), the Founder of the Han Dynasty, Liu Bang (劉邦), spent four years fighting a civil war with the greatest general of his time, Xiang Yu (項羽). Liu Bang lost almost every single encounters with Xiang Yu throughout the four years. Xiang Yu felt that it is a matter of time before he could take down Liu Bang and be the emperor of China.
What Xiang Yu did not realized was while Liu Bang lost the battle, he had managed to minimize losses on his resources (soldiers, supplies, equipments, etc.) Eventually, upon winning battle after battle over the course of four years, Xiang Yu’s troop ran out of resources and Liu Bang won the most important (potentially only) battle against him.
Liu Bang founded the Han Dynasty, which had significant influence on the Chinese history. Most Chinese today identify themselves as the Han.
A general that is famous for his war tactics eventually lost to the ‘plot’ of his enemy. The main reason why he lost is not because his opponents had better strategy, it is because he had NO strategy at all.
Something for us to think about.
Sometimes we are all confused about the difference between Strategy and Tactics. Sometimes we do not know when to focus on which, how much attention is need, and even what kind of resources is needed, for each one of them.
Think about a dinner situation.
Deciding whether to eat out and which restaurant to go to, is strategy. How one drives to the restaurant beating the traffic and arriving on time, is the tactics.
Deciding what healthy food to cook for dinner, is strategy. How one slices up the vegetables, seasons the minced meat, and puts them all in the oven to produce something edible, is tactics.
Strategy is the master plan, it decides the terms and conditions for engaging in a ‘battle’ or ‘game’. As such, it concerns very much with ‘When’, ‘What’, ‘Who’, and ‘How’.
Once the decision is made to engage in a battle, Tactics comes into play. It is concerned with the action piece of the master plan, it is about carrying out the ‘How’ in the plan, probably in the most effective and efficient manner.
It is clear that Strategy and Tactics must go hand in hand for either to be successful.