When I first worked with the leadership team of Topps Tiles on the company’s strategy, Matt Williams, the CEO, was looking to create a clear focus for growth. Rightly, the team wanted to focus on the company’s performance in wall and floor tiles, but the business environment, was uncertain and simply setting a sales goal did not feel ‘right’. There were simply too many external variables that could prevent the team from achieving a sales target.
After much discussion and a review of the options, we settled on a market share goal. Even in a ‘down’ market, the business could grow its share of UK tile sales. The goal was to grow Topps Tiles’ share of the UK retail tile market from 25% to 33% over a 5-year period. In other words, the team wanted to grow their share from 1-in-4 to 1-in-3 of all UK tile sales.
The goal drove new top-down strategic actions, in terms of range development, a greater focus on trade customers and overall customer service. But the goal was also shared across the business, enabling each store team to determine what it meant for them. The whole organisation was invested in the goal and the strategy.
As a result, the 33% share goal was achieved in less than four years. As Matt Williams put it, “Our goal galvanized the entire organisation and has been a key part of our success.”
A #1 goal on its own may not guarantee strategic success, but it can act as a critical enabler for growth. It provides a focus for the entire business and builds alignment and engagement across teams and departments. It also aids decision-making and resource allocation: if you’re faced with several options, which will best help you achieve your #1 goal?
When setting a #1 goal, there are five rules to consider:
- The goal must drive your financial engine. The goal can be financial (e.g. sales, profit, margin, shareholder value) or non-financial (e.g. market share, customer loyalty, product quality), but it must clearly lead to higher levels of financial performance.
- The goal must be within your control. The goal should be directly controllable by the organisation (e.g. the number of active customers, level of NPD), rather than being remote from direct management influence (e.g. market growth).
- The goal must build organisational commitment. The goal should be easy to understand and communicate, helping colleagues across the business to make better decisions. That’s why it’s often best to avoid shareholder value goals – they often have little resonance outside the boardroom.
- The goal must be ambitious. While the goal must be achievable, it must also be ‘big’! The goal must stretch the organisation and compel people to drive new, different decisions and actions. It must also state a quantifiable improvement. So, rather than a goal of “Improving market share”, Topps Tiles chose a goal of “Growing market share from 25% to 33%.”
- The goal must have a specific deadline. A deadline provides the zest that’s needed for rapid action. Compare the goal of “We will improve customer satisfaction” to the goal of “We will grow customer satisfaction from 40% to 80% within two years.” Only the latter goal will lead to genuine, rapid action and results.
Which of these five rules do you need to pursue so that you, like Matt Williams and his leadership team at Topps Tiles, can galvanize the entire organisation to drive your company’s future success?