I walked up to the white board and in huge capital letters I wrote:
We were starting the first step of defining our next generation process technology, and I wanted to set the proper tone to the engineers in the room.
“You’re nuts, Brett!”
“We can’t ignore physics!”
The engineering staff was not impressed with my idea of ignoring physics.
But I knew I was right. If we didn’t ignore physics, we would propose a new technology that would be an incremental improvement over what we had.
And incremental gains weren’t going to cut it.
We needed to dramatically improve what we had or we wouldn’t win.
I knew it. Now I just had to explain it to the engineers.
Setting realizable goals is important, but there’s more to it than that. You can become complacent just making incremental progress if you’re not capable. You’re running a startup! You need to reach for the moon and set Big, Hairy, Audacious Goals, right?
The reality is you need both types of goals.
Short term, you need achievable goals that you consistently exceed.
Long term, you need Big, Hairy, Audacious Goals that you achieve (or come close to achieving) or your company will never get to escape velocity.
You need truly need both:
The case for short-term achievable goals:
- You build momentum, and…
- You build confidence inside the organization, and…
- You build confidence with your investors
But this is not enough because you can hit all the goals you want and still not win. You are, after all, scaling Mount Everest, and scaling Mount Everest is a Big, Hairy, Audacious Goal.
And, how do you scale Mount Everest? One step at a time. In other words, the small achievable goals lead to the achievement of your Big, Hairy, Audacious Goal.
Let’s say you’re trying to grow your business to $100M/year from scratch. How do you get there? What should your initial goals be? The Big, Hairy, Audacious Goal is obvious: It’s building a $100M/year company.
But, what are your achievable goals?
The answer, of course, is “it depends upon the market.” Let me give you an example.
In my last company, we knew that the average customer would buy at least $10,000/year of product. Therefore, we knew we would need to get 10,000 customers per year buying our products to get to our Big, Hairy, Audacious Goal of building a $100M/year company.
We also knew that our initial customers were going to buy a lot less. Maybe even less than $1,000/year.
So, our initial, achievable goals were set around all the actions we needed to grow our customer base for each of the various parts of the company:
- Engineering: number of products per year
- Marketing: unique website visitors, and free samples
- Sales: number of customers per year
These goals led to a number of sub-goals for each member of the team. In addition, each discipline had stretch goals that we knew were necessary to get to our Big, Hairy, Audacious Goal:
- Engineering: X number of 10X better (than the competition) new products
- Marketing: generate Y number of “Whale”, sales-ready opportunities
- Sales: Z number of “Whale” (super-large) customers per year
You can develop momentum in your company AND stretch your team by using achievable and stretch goals together:
- Use achievable goals to build momentum and credibility inside and outside your company
- Use stretch goals to achieve escape velocity and accelerate the growth of your business
It starts with you, the CEO
It seems so simple and easy to make stretch goals work. However, stretch goals only work in certain conditions:
- Your team has to know they will not be killed if they fall short, and…
- Your team has to be able to communicate honestly with you if the stretch goal is just plain impossible. In other words…
- There needs to be mutual trust between you and your team.
Years ago, I worked with a CEO who was tough as nails. He was caustic, intimidating, and he pushed us to our limits. Yet, despite his persona, we all somehow knew he had our backs.
We had just the right balance of achievable goals and stretch goals. The result was we did the near impossible again and again. The company was incredibly successful.
Right after this experience I worked for another similar company. The CEO was tough and caustic too. He tried to push us to our limits. However, in this case, we all sensed he didn’t have our backs.
We had achievable goals and stretch goals. The result was the company did enough to survive but not thrive. I’ve thought a lot about what was different between the two companies, and I think it comes down to this:
There was mutual trust in the first company, and there wasn’t mutual trust in the second company:
- You can have whatever goal system you want, and…
- You can have a team capable of achieving Big, Hairy, Audacious Goals. However…
- Your chances of achieving your Big, Hairy, Audacious Goals go way down without a culture of mutual trust.
It’s a Matter of Survival
Think of the importance of setting stretch goals and building an environment where your team will push and achieve the impossible again and again this way:
- There’s likely another team, at…
- A competing company, with…
- A great team, and…
- They’ve set aggressive stretch goals, and…
- They’re operating in an environment of mutual trust, and…
- They’re pushing to achieve these goals right now, so…
- They’ll get there if you don’t!
Were you successful convincing your team to go for it?
I was able to convince the team to propose the craziest, most futuristic process technology they could think of:
- We started by defining the types of products we were planning on building. These products were going to be at least 10X better than the competition.
- Then we defined the technology we would need to support these products. It didn’t matter whether we thought the process technology team could achieve it or not. We would let them tell us, “No, it’s impossible.”
In other words, don’t be the constraint. Let someone else tell you it’s impossible.
Then, we shared our proposed technology with the process team. Amazingly, they told us almost all of what we proposed was possible.
We presented our plan to our caustic CEO (the one who had our backs) for approval. I’ll never forget him calling the technology, “space age” and “crazy”. He asked us one question:
“What is the process team going to say when I ask them?”
“They’ll tell you they can do it,” I replied.
“Okay. Then let’s go for it.”
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