Business goals

Lee Robertson: Long-term business goals are futile

We are encouraged to produce long term business plans. I used to set myself such business goals and was agonizing over projections, all of which turned out to be unnecessary.

Short-term precision was quickly lost on internal and external factions. The five-year plans have come to nothing. I therefore now refuse to detail them. It is not that they are not important, but they should be seen simply as a benchmark.

The problem with long term goals is twofold. First, most of us set unrealistic and overly optimistic goals for ourselves. Striving to hit something this big, like a five-year goal, means it’s all too easy to point out that short-term gains or failures aren’t contributing in the way we might have hoped.

The large number of variables that can impact progress can mean that we overlook short-term gains or overcompensate failures, placing undue stress on ourselves and our colleagues.

Second, it is really difficult to plan for the future. Just look at what is impacting businesses right now: remote working, supply chain issues, loss of custom. We are having problems that we never anticipated. We can get by, but very few business plans had a section on the impact of a global pandemic.

We just can’t plan in detail for the future because it’s not clear how things are going to play out. Unexpected events will occur, forcing us to make decisions and constantly re-evaluate them based on new data.

The Origin and Evolution of New Businesses, a book by Professor Amar Bhide, suggests that 93 percent of all successful businesses have given up on their original goals because they turned out to be wrong for them.

The book is full of examples of companies changing their plans for the better based on shorter-term adjustments.

Particularly insightful is the section on how popular communications channel provider Slack started out as a moderately successful video game producer before its extreme pivot led by a thorough review of progress.

The farthest that I can look into the future in detail is six months. Our five-year “plan” is just the destination. We set personal weekly goals, which contribute to monthly, quarterly and year-end key results, all with the goal of leading the business in the direction it needs to achieve the full mission.

Each week becomes a point of progress and we relate to each other through a simple 15 minute exercise, which means that each team member is responsible.

These weekly progress points are short enough to be reset or revised based on any new information, good or bad.

It is a consistent responsibility. By making small gains, we know we are producing demonstrable results and we have seen a marked effect on progress.

Lee Robertson is Managing Director of Octo Members Group