I’ve spent a lot of January working with folks on goal-setting. Setting the right goal can be hard. Whether it’s picking the right metric or determining the target, there are plenty of places where goal-setting can go wrong.
The biggest mistake I see is, people set incremental goals. The problem with this is, if you set incremental goals, you’ll get incremental results. If you want to find big wins, you need to set exponential goals. Here’s my process for doing just that.
Focus on One Metric
In this article, Ben Yoskovitz writes about choosing one metric to measure success. Not two or three. One. I couldn’t agree more.
You want to identify the one metric that if you doubled, tripled, or quadruped that number, good things would happen for your product. As Ben explains, this metric might (and likely will) change from time to time, but there’s value in focusing on one at a time.
And that’s the key. Identifying one metric allows you to focus 100% of your effort on improving that metric.
Choose the Right Metric
Just as important as picking one metric, you need to make sure you pick the right one. How do you know which one to pick?
Start by looking at the set of metrics you are currently tracking. For each, ask yourself why it’s important. Is there a common theme in your responses?
Are you trying to grow revenue? Are you trying to increase user registrations? Are you trying to increase user engagement?
I know. You are probably trying to do all three. But which is most important right now. If you could only improve one in the next 3 months, 6 months, 12 months, which would have the biggest impact on your business?
Choose that one.
Now to make sure it’s the right metric, try this. If this was your only goal and you were able to spend 100% of your time focused on this metric, what activities would you stop doing and what activities would you keep doing or start doing?
Does that feel right? Are you creating value for your business? If so, you are probably on the right track. If not, you probably need to rethink your choice.
Ok, so you’ve identified on the one right metric. Now what?
Get a Trend Over Time
We need to set a target goal. Let’s assume we want this metric to go up. Before you can predict how much you can improve this metric, you need to understand the historical trend.
Knowing what it is today, doesn’t help you that much. You want to know what it was yesterday, the day before, last week, last month, last year (if possible).
Does it have natural fluctuations over the course of the week, month, or year? How have you impacted this number in the past? What type of activities does it responsd well to? Is it easy or hard to impact this number?
This gives you a foundation for the next step.
Predict the Impact of Your Activity Plan
Put together an activity plan of what you might do to impact this number. For each item on your list, estimate the impact of that activity on your metric. For some activities, you might have historical data to draw from to influence your forecast. For others, you might have to guess. That’s okay.
Just make sure that you are explicit about the assumptions behind your guesses. That way after you start collecting data you can see where your assumptions were right or wrong. This will do two things. First, it will help you the next time you need to forecast this goal. And second, it will help you start to see where your intuition is working and where it falls down.
You can now sum the expected impact of your activity plan to get a forecast of how this metric will be impacted. Odds are this will be an incremental improvement over where you are today.
If you are okay with incremental improvement, you can stop here. But I’m not interested in incremental improvements. I’m interested in exponential improvements. So how do we get there?
Predict the Impact of Pie-in-the-sky Activities
Ask yourself, how could I double, triple, quadruple, or even 10x this number. This reframes your thinking. It forces you to consider new activities. it forces you to generate ways to impact this number other than what you are currently doing? This is where you will find big wins.
What got you here, won’t get you there. If you want to see big improvements, you have to try some new things. Spend more time thinking out what new things you could do to impact this number, than you did generating your existing activity plan.Think outside the box. Get input from other people.
Remember you are looking for exponential improvements. When you estimate the impact of the activities on this list, if they look incremental, cut them, and start over. Your goal is to generate a list of activities that each have the potential to exponentially impact this metric.
Now by definition you don’t have historical data to draw from when estimating the impact of these activities. Odds are you are going to be wrong. A lot. Again, that’s okay. Just be sure to be explicit about your assumptions, so that in the future you can see where you are wrong and learn from those mistakes.
Now sum the impact of this new activity list. This number should be significantly bigger than the number you got from your regular activity list.
Now let’s take a look at where to set your goal.
Set a Goal
I would never set my goal as either my activity plan forecast or as my pie-in-the-sky forecast. The former is too conservative and the latter is too aggressive.
Instead, these serve as my lower and upper bounds. My goal is going to fall somewhere in-between. But where?
You should already be good at doing the activities on your regular activity plan, so assume you’ll make that incremental progress. Where you set your goal is going to depend entirely on the pie-in-the-sky forecast.
How many of these new activities can you reasonably do? Be aggressive. What incremental things could you stop doing to free up time to experiment with some of these bigger win activities. Identify the set of pie-in-the-sky activities that you can commit to experimenting with.
Sum the impact of just those activities. This still isn’t your goal. Remember you made a lot of guesses to get to this number. Some of those guesses are going to be wrong in your favor, some are going to be wrong not in your favor. I modify this number based on my confidence in those guesses. Sometimes I cut it in half, sometimes I cut it in thirds. There is no science to this. You just get better at it with time.
Combine this new number (a fraction of your summed pie-in-the-sky activity list) with a sum of our everyday activities. This new number is your goal.
The key is to set a goal that is backed by a plan. It should be aggressive. It should be a little bit scary. But it shouldn’t be impossible.
It should motivate you to get started rather than making you want to go home and cry.
That’s it. That’s how I set goals. How do you set goals?