This is the second in a series of articles expanding on my recent post, Strategic Power: A Manifesto to Revolutionise Growth.
When I coach my junior football teams and we’re doing passing exercises, the boys can quickly lose enthusiasm. But when I add a goal for them to shoot at as part of the drill, their engagement and energy levels are instantly transformed.
It’s the same in business. Without clarity on what you’re trying to achieve, you’ll never be able to determine the best way to make it happen. As Ian Filby, the CEO of DFS, the UK’s leading sofa retailer, argued in my book The CEO’s Strategy Handbook,
“One of the big lessons I have learned is that a strategy has to meet a clear goal. Without agreement about the goal, you’ll never settle on your strategy.”
All businesses will have many goals, but it is critical that you have a #1 goal; a strategic goal that sits above the others and that will drive your agenda. Otherwise, you just end up with confusion as you switch attention – and resources – between a number of competing targets.
Long Term Strategy
At Topps Tiles, for example, I worked with the management team on strategy over a number of years, but our first ever task was to set the company’s #1 goal. After a focused and wide-ranging discussion, the executive team focused on a market share goal and set the ambition of growing their share from 25% to 33% over a five-year period.
In reality, Topps Tiles achieved a 33% share in a little less than four years. Teams across the business started to ask themselves what decisions and actions would best get them to profitably achieve their 33% share target and found that initiatives such as making the stores more attractive, creating real focus and expertise on tiles and ditching peripheral ranges such as wooden flooring, building stronger relationships with trade customers and enhancing the online offer all had a clear and positive impact on their market share metric.
As Matt Williams, the CEO of Topps Tiles, commented,
“Among other things, Stuart helped us define a specific and clear goal that galvanised the entire organisation and which has been a key part of our success.”
There are three criteria which help establish an effective #1 goal:
1. It drives the company’s profit engine.
It doesn’t need to be a profit goal – and it’s generally better that it isn’t – but your goal should have a clear link to bottom-line performance. In recent years, for instance, I’ve worked with clients to develop #1 goals that include the number of customers served, the level of customer loyalty, top-line sales and the share of spend from particular customer segments (rather than the whole market) as well as other market share goals.
2. It has clear ambition.
Setting a #1 goal is an art as much as it’s a science. The best goals are grounded in what is achievable or possible for a business, but they include sufficient stretch that new solutions, initiatives and behaviours are required to achieve them. The Topps Tiles goal, for example, was certainly possible, but only by doing new and different things and not simply working harder or doing better what the business already did. One more thing on the ambition: I think that 3 years is a reasonable time frame. Although some management teams, such as Topps Tiles’ executives, opt for a five-year horizon, I find that this can sometimes feel that this timeframe can feel too distant. A three-year horizon makes all the management team understand that they need to start making progress now!
3. It builds organisational engagement and commitment.
The best goals also have meaning for people across your business. That’s why profit is not always the best goal – it has meaning in the board room, but on the frontline of many organisations, it can feel a bit conceptual and outside people’s everyday control. The Topps Tiles share goal, for instance, could be broken down to an individual store goal, and Matt Williams challenged every store team to be the #1 player in their town. Similarly, I worked with a leading opticians chain where we agreed on a goal to drive the number of eye tests the business did. This allowed managers to establish individual and store goals that, together, delivered the business goal.
So, you must get on the pitch and create your goal if you want your business to win. What steps will you take to create a clear and compelling goal for your business?
© Stuart Cross 2017. All rights reserved.