I’ve founded and built six companies and two non-profit organizations. Those experiences have taught me the critical role that adequate strategic and tactical planning plays in the success or failure of a start-up. A critical part of that process is the setting and enforcement of goals. In fact, over those years and throughout my work with CEOs – helping them to avoid the mistakes I made and to build their businesses – I have discovered that the setting and achieving of goals is probably the least effectively pursued of all the components of the planning process.
Many entrepreneurs are fairly good at developing a strategic vision for their company. They are able to conceptualize a plan which clearly envisions the end results of their intentions – the mature company which they hope to build. Some entrepreneurs outsource the development of this plan – availing themselves of the services of one or more of the many companies which are in the business of producing business plans. But, in both approaches, there are often gaps between planning and execution – a gap which is widened by the failure to set and effectively pursue goals – to formulate and reach important milestones.
The most frequent characteristic of efforts which suffer from this shortcoming is that companies will quickly reach a certain level of development and then stall before a series of obstacles which should have been anticipated and planned for. One of the principal factors which seem to fuel this situation is an aversion by the founders for any process which involves direct and specific accountability for formulating and reaching critical goals. Avoidance of such accountability is a huge risk that can doom the company to stagnation and eventual failure.
During the early stages of a start-up founding teams tend to move as a unit. I have encountered situations where the entire team was going on sales calls. A critical step in evolving from this stage towards a more effective deployment of resources begins when the planning process breaks out goals and defines milestones which then become the individual responsibility of team members. This evolution requires a careful assessment of the business skills, abilities, connections, knowledge and motivations of the various team members and an allocation of responsibilities which makes the best use of those assets. In other words, the development of goals and milestones inherently distributes the responsibilities and authority over the entire team in a way which optimizes the chances of success.
A taste for tactical implementation is a critical component of a team’s development. It’s presence has a major impact on the possibilities which any company will face. It is insufficient to simply write down why you started the business in the first place. It is folly to rely on the strength of the motivation of the team. History is replete with examples of companies which were founded with good intentions, groundbreaking vision and strong motivation – companies which never saw the fifth anniversary of their founding.
Founders who avoid asking the tough questions of themselves and their team will risk building their company on poor foundations. The assessment process needs to be focused, professional and exacting. Errors in conclusions can have major negative impacts on the future of the company. A good rule is that the smaller the team and the longer they have known each other, the more difficult this process can be. But as a founder – and probably an investor – you can’t afford to take the attitude ‘I don’t really want to know’.
In my consulting and coaching practices, I am often brought in to organize and run such assessments. There is some wisdom in having a skilled outsider design and manage the process – if for no other reason that it will certainly identify shortcomings among the team – particularly with the CEO.
One word of caution about this process – it is often tempting to read a couple of books and try to manage the process on your own. There is no substitute for experience in this process – informed judgment based on long experience is an important guarantor of effectiveness. The assessment process is not mechanistic – and the conclusions which it generates are not often comforting. It is always a good idea not to have the patient act as their own doctor.
Once the team vision has been clarified, the setting and enforcing of goals becomes much less problematical. The translation of the strategic plan into tactical implementation is then more easily achievable. Goal setting also has the benefit of helping to evolve the roles that each team member will be asked to play – and that evolution will help identify strengths and weaknesses within the team.
Once a mechanism is in place for setting goals and milestones, it will become much easier to conduct review meetings and assessments of progress towards those goals. Each team member will have a sharper understanding of their responsibilities to the team and to the company. Scarce resources and limited bandwidth will be more effectively deployed.
Goal setting and tactical planning will also drive the evolution of individual roles within the team. The CEO who sees themselves as ‘chief of everything’ will be challenged to distribute responsibility, rely on other team members to do their jobs and concentrate on the three most important contributions which any CEO makes to the growth of a company – the raising of sufficient capital, the expansion of the team and the closing of business.
© Dr Earl R Smith II