The 6 Most Common Business Goal Setting Mistakes

The same goal errors in different business cases

No matter the size of your company, from a small solopreneur startup to a multinational organization, there is a pattern of mistakes made when setting goals.

Cleaning up after a mistake

Cleaning up after a mistake

The actual cases are similar but their reasons can be different. To make this meaningful for the new entrepreneur or C suite executive alike, we have broken some of the key areas with case examples that will be easy to spot from a small-medium enterprise, small online business or multinational organization.

The examples we share are based on real examples seen and observed within the business world. For the interest “story narrative”, we have summarized the mistakes but each one and their types are real. – Let us know which ones you recognize.

Using audits (or the reader within a perfect business)

Even if your business is performing well and you currently are not making any of these mistakes listed, it will make sense to ensure some form of the audit process is in place to avoid them creeping in at some future point. If you do discover some of these mistakes are prevalent or making their way into your business, then correct them.

Disconnected or lacking a vision, mission, and strategy

Small Business Example Case 1: A small business startup is based on some outstanding innovative skill attained by the business owner. This can be anything from being an awesome coder or great image stylist. They become recognized for their talents and it is this as the driving force for setting up their company.

The problem this company discovers is that the market does not care as much as they thought about excellence. The market cares more about a brand, story, a wider purpose or personality it cares about people. So, to avoid failure from the get goes, your business needs to define a clear vision of its purpose. From that vision, the actual mission towards accomplishment is set which then makes a clear path for a specific unique strategy.

All this planning is often cited as one of the most common failures in small companies. This does not mean that once it is set, it cannot change. Over time you may discover a slight pivot or adoption of change will provide the unique selling points the market seeks.

Small Medium Enterprise Example Case 1: The business has run for a few years but is struggling to make new ground. Employee turnover and motivation are suffering and the leadership is still involved in too many tactical daily challenges.

Business goals in debate

Business goals in debate

The original purpose of the business has seemed to be replaced with the need for tactical process work and chasing after new client needs that change all the time. Investment choices are reactive as cash flow remains tight. The leadership used to place time of a wider vision but daily distractions take up too much time to execute.

Many companies become acquired or close due to market or leadership burn out. Many of the reasons for such a scenario are a business being all too dependent upon a few key customers for their success. This reliance changes and impacts the culture of independence once felt across the business.

By taking a strategic decision to drop high maintenance clients allows a company to reset its purpose and meaning. These tough choices are not popular and often lead to internal friction, yet a clear vision and business mission should help plan a clear path of differentiation and improve the motivation of employees.

You will also be surprised that often the market will follow your lead if the decision is correct and well communicated.

Large Organization Case 1: Publishing a vision and mission statement on a corporate website is not good enough. Today’s brand-conscious consumers want to see these statements in practice and in action. Being too fluffy or misleading will impact the long-term performance of the business, risk investor disappointment and reduce motivation and engagement levels of employees.

The remoteness of the C suite leaders may seem to be disconnected from the daily actions of a specific task or department. The lofty desires set from the leaders are not represented in the resources, support, and priority at the frontline. This is then compounded by measures and metrics that seem to be in direct conflict with the mission statement or are in competition with another department with conflicting priorities.

Creating process and employee specific priorities is one of the impacts management brings from a local, departmental and divisional level. Ensuring tight alignment between the company vision, mission and strategy will define the clear purpose, motivation and identify the resources needed for specific goals.

Reader Key Take Away: Set up a periodic review of your vision, mission, and strategy across the full operations of the business.

Expecting outcomes will little or no investment in goal activities

OK, we get it, productivity needs to improve, standards need to raise and ever deeper levels of commitment are required across all areas of the business, but there will soon be significant limitations to such progress if the investment is not provided.

Goal setting does not always follow the “build it and they will come” philosophy. More often you need to build it and provide the transport to get there also
— James Doyle - JAMSO

The investment we define here is a mix of cultural, priority, financial and technological. Let’s see how this applies to each type of business.

Small Business Example Case 2: A new business startup has created its website; online social media platforms are ready with good content. So, that’s enough, isn’t it? No, just because you have a website for your small business it needs to be maintained, refined and grown.

Power of inline tools

Power of inline tools

The user interface requires continual fine tuning and great Search Engine Optimization (SEO) activities will keep any business owner busy on a daily basis. This requires benchmarks, analysis, A/B Testing and fresh unique content that the market is seeking right now.

Your social media platforms will need engagement with the market. Research on hashtags and influencers will become key to your brand success. Collaboration and communication through direct messages and providing timely information will make or break your social selling success.

Just posting information online will not work anymore for a small business. To become noticed and grow, your goals will need an investment of time, equipment, skills and a clear supportive strategy to engage with your market. You may discover the platform you are acting upon generates a lower engagement than elsewhere, so testing through investment is critical for success.

Small Medium Enterprise Example Case 2: The brown edge on the paper is always the clue. It’s a sign of how old the goal is, how long ago this aspiration was created but now is withering and succumbs only to chance for success. The difference is that the company created a clear goal at the time, then over the following weeks, months and sometimes years, the goal has turned into an aspirational level of achievement with no clear path for success.

This is seen from process quality to standards in service and products. A minimal viable product (MVP) is delivered to the market and then the product is replaced later at a higher cost than some additional investment in its improvement. So the company flirts and skips from goal to goal with little investment of time, skills development or finances to help meet it.

Large Organization Case 2: The manager looks into the eyes of the salesman and says “Your target next year is increasing by 10%”. The salesperson is excited, they understand this will bring even more opportunity to create new sales and grow the business; the extra commission will also be very welcome.

The salesperson then asks “What new training, new products, and marketing support will I have to make that happen?” The manager just looks at the salesperson straight in the eye “None, we don’t have the budget for this year.” The salesperson's motivational levels went from 6 to 10 and then landed on a 2!

Invest in people and the results will come

Invest in people and the results will come

Goals are like most expected outcomes. You need to invest in them. Larger organizations often seek higher productivity levels and seek to clear out waste and inefficiency by driving standards and expectations higher rather than investing in the process and using the process to cleanse at the same time.

So, a 10% improvement might have the potential to become an 18% or 40% improvement if managed. Throwing out a figure is the fastest way to disengage staff. Being smarter with goal setting investments will generate new levels of success previously not considered possible.

Reader Key Take Away: Investment is about finding the proportionate level for the expected outcome. One can become over-invested in an activity or underinvest. So, investing too much into a program may expose a business to a risk with a low success rate. Clearly, underinvestment will limit potential.

There will always be friction in this area but we see this as a positive point. Having stretched and efficient resources is important to maximize results. Yet, just like a machine or athlete, continual over stretching will result in failure and need time to recover.

Only knowing the market or the customer and not both through data

The market and the customers are two different parts of the same business game. The customers are those that you have, the market is the customers you have, the ones you do not want and the ones you would like. This picture changes over time.

Even a business such as Apple, known for its continual innovations still provides some base products to the market because its customer base and the market base has evolved over the years. We will see before our eyes a huge shift towards electric vehicles over the coming decade. The companies that get their goal setting correct during this period will become the true legacy builders and industry leaders.

Small Business Example Case 3: Just take a drive around many small villages and medium size towns. A pattern will emerge. The once loved and loyal customers stopped shopping at the small electronics boutique; they now buy their meat from the supermarket, the garage that used to perform repairs now only sells fuel and candy bars. These are the realities of the same loved and loyal customers moving with the market.

“No matter how automated we become, we are still very much a people business,”
— Gregg Roden - PepsiCo

Beware that your goals do not just focus on only one side. Do not just focus on your existing customers but consider the market as a whole. The same needs to be considered in reverse. Knowing the whole market may define holes and opportunity for niched small company services. My local paper just advertised a personal service for collecting and converting old VHS, 8 Tracks, LP, cassette and other musical and movie formats into a digital file.

Small Medium Enterprise Example Case 3: Right now the SME companies are being exposed to a new risk. Those that invest and create goals around the risk are most likely to survive. Those that do not will more likely become listed in the history books and accountants (old customers list). The change I detail is data transformation. No matter your business, from a funeral parlor to gaming developer the rate of change through big data, machine learning and artificial intelligence will impact processes, services, and careers.

The markets are shifting towards the adoption of these digital developments, not because the customer is asking for them but more because of the competitive advantage it can generate over your competition to sustain your business and retain the optimal customer base. So create goals that match both your existing customers but also around the market.

Large Organization Case 3: Most business textbooks today will be littered with examples of large organizations who got this wrong or are doing this right (at the moment). The risk for many larger companies is not looking too foolish when a strategy goes wrong (think Samsung burning mobiles, Kodak ignoring digital photography). Speed and adoption is important.

3D printing, will it be a success or failure for your next product?

3D printing, will it be a success or failure for your next product?

Setting specific goals to anticipate the market and improve the relationships with customers is more critical today than ever. The costs that are attached to such research can be high but this may be seen also as an investment to protect the business and define new opportunities and trends.

Reader Key Take Away: With the advent of technology, increasing capabilities to gather and process data through IOT (Internet of Things) and Big Data are perfect tools to identify and create new market opportunities. Although this seems to show that large businesses will be best placed to win, there remain significant opportunities in having deeper quality data sets at local or niched levels. So, the small business, SME alike still have a place.

Setting goals that ignore improving existing skills, process, service and products

No matter the future ambitions of your business you still need to walk the daily path towards the destination. So, creating goals that ignore current processes will not provide you the long-term skills needed. Even from a position of benefit through change management culture, there are reasons for every business in every situation to seek continual improvement. There is enough feedback and timely proof in short-term goal success.

These small wins help maintain the direction and support the motivation of staff when tied to a wider policy and strategy the results will become transformational.

Small Business Example Case 4: Just like many other small companies, our own at JAMSO has a medium and long-term set of goals. We keep an eye on the strategic direction whilst seeking continual daily process improvements. For instance, had we ignored the direction of online video consumption then the user experience of our website, training material and social channels would deliver less impact and thus reduce revenue potential.

Recognizing we have not hundreds of thousands of Euro to invest in such video production has not stopped us from jumping onboard. We now have released more than 40 videos, short informational media formats that have improved our in-house capabilities and helped shape the long-term expectations.

Had we ignored this kaizen, daily improvements then the longer term bigger goals may have been found to be way off the mark from the market expectations.

Small Medium Enterprise Example Case 4: We see many cases where an ambitious business seeks to improve its market share through offering a wider diverse portfolio of products or services. The risk at this point is a business concentrates too much on growth and diversity and ignores retaining or enhancing current service and satisfaction levels.

The expectations of an Airbnb user today will be different than that when they started. Your visit to a camping site in 2017 will have higher needs than back in 1997.

Setting too high of a focus on new goals and measures is a mistake to be avoided unless they can also become part of a continuous improvement cycle. Good practice business goals should offer benefits for all to establish a win-win trajectory for sustained growth.

Large Organization Case 4: Large companies today love to talk about innovation and creating intrapreneurs. The call for a faster paste business culture is to help stimulate excitement and remain competitive within rapid market changes.

The days of having your research and development team being isolated and just creating new idea after new idea is attractive for branding and supporting a vision. Yet, the cost of such actions whilst ignoring daily process and skills need to be paid through change management in the longer term.

TEAM Together Everyone Achieves More

TEAM Together Everyone Achieves More

A large business with a clear vision and strategy can use the benefits of cross-departmental collaboration to bring innovative ideas whilst also improving the culture and skills of operational areas.

A bike manufacturer may discover that improved packaging will help improve safety for production staff, improve ergonomics for customer handling and support their wider brand image as a sustainable caring company. Such daily improvements might be overlooked by a separate R&D team keen to focus on using new materials for wheel spokes.

Reader Key Take Away: The speed of positive change is the true desire for many companies. Its delivery can be attained with close milestone management and solid communication. Linking long-term goals to short-term benefits as part of the journey is seen in quality management philosophy from Kaizen to 6 sigma and embraces the concepts of lean and agile project management. Use them or lose to them.

“Company goals: Either use them or lose to them, it’s a market thing” – James Doyle

Creating goals that define responsibility but no accountability

This is probably the most common mistake we see across companies. Sure goals have been set, indeed people’s names are attached to them but there is a lack of accountability. The reasons for not creating accountability for goals are due to leadership styles.

Creating a culture where clear accountability for tasks within the business is more often seen in aggressive companies. This need not be the case and often is not its original intent. Creating fear around goals through top-down accountability with hard consequences is a poisonous model to follow.

Instead, consider creating an atmosphere of empowerment and remove fear and anxiety from task manager. A responsible and accountable person should be supported with the appropriate resources, autonomy, and training to attain their objectives and goals. Extra motivational support can be generated through the use of gamification and more realistic feedback at each key milestone of progress.

We say it will take us up to five years to get this business to appear at the profitability level, not three years. We want to do it right.
— Tarak Mehta - President of Electrification Products ABB

Small Business Example Case 5: The unfortunate reality for many small business operations is they only survive a couple of short years. One of the reasons for their failure is the lack of accountability for the whole business with key personnel and business owners.

Imagine the scene year after year, when a business owner meets with his accountant at time of salary or tax payments only to be told there is insufficient funds to pay the fees due. The small business environment is scattered with such cases year after year.

Paying the bills

Paying the bills

In such a case, the accountability of setting a clear goal with performance triggers well in advance could save many companies from such a fate. The accountant in such a cases only gets to view the finances once a quarter so has no direct responsibility, mechanism or accountability system to inform the business owner of an impending risk. The business owner is at fault in this case – avoid it at all costs.

Small Medium Enterprise Example Case 5: A sales team for a high growth company has an outstanding salesperson. They are appreciated by the business leaders and given a wide range of free reign to behave in a semi-autonomous position. “As long as they get the deals on time that is all that matters” can be the words from the sales manager or departmental head. Yet, the ethical conduct to meet these deals is overlooked.

The salesperson over time creates sales with short-term personal gain in their commission but the overall expectations of the customer for the service or product starts to lose its satisfaction. The salesperson moves onto the next client to replace the old lost one.

The churn rate of clients becomes a negative impact on the organizations brand image within the market. By correcting the sales goals to include key feature and benefit communications, specific service level agreements and input on how to create improved products plus an enhanced customer experience as part of the sales process changes the salespersons accountability focus. – Do you know a business that could enjoy such a change?

Large Organization Case 5: This will be the shortest case paragraph in the whole article. There are too many examples where goals have been set, responsibilities made clear but no accountability of actions has followed through. Enter the hall of fame: Finance crisis banks, hedge funds, Enron, FX trading fixes, VW Diesel gate (investigation ongoing).

On a more positive note, some great examples and cases are out there such examples include Body Shop, Ben and Jerry’s ice cream and even Starbucks coffee as leading examples where accountability is the core of their corporate structure.

Reader Key Take Away: The goal design within business needs to be done correctly to encompass accountability from the leadership through to the actual person responsible for the goal. With this attitude shift, a business culture steers away from a stagnant and blame game business full of internal politics to one that is service focused and has a thrive mindset.

Setting too many goals or no goals in the most impactful areas

The emotional state of feeling satisfaction is a natural human desire. The hours that are spent at work can reflect this though goal setting. Avoiding simple aspirational desires by setting clear expectations and deadlines provides a purpose, priority, and stimulus at work.

There is the need to avoid the fear of failure and accept some risk-taking. So, the selection of your goal setting theory is important: It is necessary to know your SMART from your BHAG.

Over analysis of activities also creates turbulence in a business operational performance. The overload of too many goals and metrics often clouds prioritization and strategic value.

Small Business Example Case 6: A small tech startup has spreadsheets and goals for almost every aspect of its business. This desire for perfection and control is often reflected in the personality of the business founder. “If it can be measured then it gets done”, is a common quote I hear. But, this sometimes limits the potential of business outlooks.

Focus on the details but dont forget the big picture

Focus on the details but dont forget the big picture

By setting too many goals on too many operational daily details lessons the oversight of the larger strategic picture and opportunity. Gaining an understanding of the difference between measurement and metrics and performance of normal activities as opposed to structured goal setting is not a point of semantics but one rather of the business need for innovation.

Small Medium Enterprise Example Case 6: A logistics business wants to improve its operational efficiency. It invests in the latest sensors, package, and vehicle tracking technology. These innovative steps bring a flood of new data points.

The challenge the business has understands and prioritizing the acquired information sets whilst still running a profitable business. Over time profitability starts to slip as new staff is recruited but with little training in data mining and reporting systems.

The leadership raises the level of reporting expectations and the end customer’s satisfaction starts to suffer.

Setting an investment goal in systems and sensors should have been followed up through with a skills and ongoing training cost allocation. Creating priority goals from the project will allow a business to focus its performance, enhance client satisfaction and link all activity to a wider business objective and mission.

“Companies never choose to die and yet many, by not evolving, are enabling that kind of fate.”
— Jim Hackett FORD Motor Co. CEO

Large Organization Case 6: Most large companies are known for their strong goal setting expectations and metrics through performance management and sophisticated dashboards.

There is, however, a fear in the same organizations by setting either too bold of a goal (think Elon Musk’s desire to colonize the Mars) or too small (think again of many USA automotive companies falling behind Elon Musk’s Tesla electric car business).

Elon Musk - King of Detail and BHAG goals

Elon Musk - King of Detail and BHAG goals

The risk of appearing wrong overrides the potential to speed up growth in new areas. This is the reason why companies need to spend time establishing and creating innovative brand images and persuading their investors of the need for boldness and agile practices.

So, the pension funds that invest in such should also reevaluate their own goal expectations to allow more risk but also use the power of goal setting to ensure enough counter investments protect their own returns expectation.

Reader Key Take Away: Striking the right balance between measures, goals, and aspirations can be solved with a clear vision, mission and strategy plan at work. Creating the commitment to meet goals and not just sustain performance or shy away from risk-taking are critical elements to the leadership motivational purpose.

Summary thoughts

The core mistakes in business goal setting have the same patterns but different causes. Some of these are underlined natural human defensive traits. Being more aware of critical thinking skills is important to challenge your current goal-setting strategy. We have made it clear of the need for a wider purpose to be linked through to every smaller goal.

Focus on the outcome

Focus on the outcome

Periodic review of your goals, reasoning for selection and which goal setting theory model that has been applied is a healthy and indeed necessary step for solid sustained performance growth of any business no matter how big or small.

As an extra tip - Consider applying some gamification mechanics to your goal setting process.

Share this and tell your friends what you think of goal setting within business. You just might find they have been thinking the same!

Extra external reads: 

When goal setting goes wrong - By Harvard Business School 

Science Daily offer some good insights in their article regarding ethical behaviors within a business which are impacted from goals and targets through middle managers.

Psychology Today has a good article also cover why setting goals can do more harm than good. Although we at JAMSO suggest goal setting is a positive experience, their selection should be done with care.