Goal Setting & North Star Metrics, Part 2
This week’s newsletter is a follow-up to last week’s – if you haven’t read part one yet, check it out here. In part one, we discussed why goal setting is essential and how business frameworks can help you accomplish your goals. Today, we’ll discuss the next steps on the goal-setting journey, the role of rituals, the execution process, and what happens when you need to change or don’t hit your goals.
So, you’ve established the metrics associated with your North Star goals. Now what?
Don’t just put your goals on a shelf once you’ve set them. A core requirement to actually hitting your goals is to make it a habit to revisit and discuss your goals and North Star metrics. If you want your business to hit its goals, you have to be an organization that creates performance-enhancing habits that drive you to success. Goal-setting is not a static process, but one that requires constant attention.
Habit formation is thus a critical component of goal attainment. These habits should not just be individual to you as a founder. Rather, they should be integrated into the fabric of your company culture. What leads to habit formation in an organization? Rituals. We form organizational habits that drive results by creating rituals or practices that drive those habits.
In the same way rituals around events like Independence Day, Christmas, and New Years’ define a society's culture, the rituals you perform around your company’s recurring activities will turn into performance habits. Those habits will propel you toward your goals. When enshrined in your organizational cadence and properly executed, these practices force accountability, quick decision-making, and a culture that defaults to action. Examples of rituals are goal-setting practices enshrined in your hiring process, consistent one-on-ones, company all-hands meetings where the whole team can sync, and quarterly or annual planning summits that give the team space to reflect and plan.
As with our personal lives, great habits lead to growth. The growth process leads you to arriving at your goals.
One word of caution: If the action plans that support your goals are not re-emphasized, celebrated, rewarded, and improved during these rituals, they become ineffective relics on paper. Affirming the power of these rituals elevates them to an essential part of your business operation.
The wrong way to do this is to regurgitate metrics during rituals without highlighting the responsible individuals and tracking the underlying actions that drive toward the goal. I’ve found myself leading teams where we report on metrics without follow-up and clear action plans. I was very frustrated that we weren’t making progress on our goals, despite them being a frequent point of discussion. The problem was, while we worked hard to track our goals, we never actually completed the loop. We were just reading our Scorecard metrics instead of focusing on the individual actions and timelines we needed to execute. Everyone can read the data; the why, how, who, and by when are what ultimately matter. Unpacking the strategic actions that underlie the completion of your goals will move you forward on the path to growth. Simply reporting the numbers will keep you in the same place.
But what if you don’t reach your goals? The beauty of a framework and ritual-driven approach to goals, versus the “write it and hope” or “haphazardly try to accomplish it” approach, is that you will have developed some growth habits in the process, even if you don’t actually meet the goal.
So don’t hang up your hat just yet – evaluate whether the process has improved your ability to execute more efficiently. If that is true, celebrate whatever milestone you’ve reached and then reevaluate why you didn’t hit the goals. Be willing to have frank conversations with your team about what happened, but don’t harp too strongly on the specific number. If you made significant progress but didn’t hit a particular number, was it overly ambitious for the time frame? Your goals should be big enough that it’s possible you won’t reach them – they should stretch you and your team. If it was the right goal but just a big stretch, you’re moving in the right direction, even if you didn’t meet the goal.
I hope this helps set the right framework for your journey. I am looking forward to hearing any feedback around goal setting (or not) and how it has affected your journey.
I hope you enjoyed this week’s Let’s Build post. As always, please let me know your thoughts by tweeting me (@sotulana), commenting on Substack, or responding directly to this email.
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