In this clarifying episode, Scott Ritzheimer, Founder of Scale Architects, shares why goals exist to drive better decisions and actions toward your vision. If you struggle with misaligned goals or ineffective planning across any stage, you won't want to miss it.

You will discover:

- Why goals primarily guide decisions and actions, not just achievement

- How to set goals aligned with your mission, vision, and values

- What reviewing goals teaches you to master the skill over time

This episode is ideal for for Founders, Owners, and CEOs in stages 1,2,3,4,5,6,7 of The Founder's Evolution. Not sure which stage you're in? Find out for free in less than 10 minutes at https://www.scalearchitects.com/founders/quiz

Scott helped start nearly 20,000 new businesses and nonprofits and with his business partner started led their multimillion-dollar business through an exceptional and extended growth phase (over 10 years of double-digit growth) all before he turned 35.He founded Scale Architects to help founders and CEOs identify and implement the one essential strategy they need right now to get them on the fast track to Predictable Success.

Want to learn more about Scott Ritzheimer's work at Scale Architects? Check out his website at https://www.scalearchitects.com/

Mentioned in this episode:

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Founder's Quiz

Hello, hello and welcome. Welcome once again

to the Start scale and succeed podcast. Yes, it is the only

podcast that grows with you through all seven stages of your

journey as a founder and I'm your host, Scott Ritzheimer, and

today we've got another solo episode for you, and I want to

spend it talking about goals. You see, over the last five or

so months, I've spent an enormous amount of team time

sitting in the session room with teams setting and reviewing and

planning their annual and quarterly goals. And during that

time, I've got to thinking quite a bit, and I've started asking

all of my teams this one specific question, and I want to

pose it for you today. And the question is quite simple, what

is the purpose of a goal? Now think about it for a moment, and

and again, I've asked virtually every one of my clients, and

their their response is probably something similar to yours. I've

had some of them say they wanted to achieve something, or they

wanted to know where they were going, or they wanted to know

what to focus on. Someone had nailed right on the head and

said they wanted to make more money. Others said that they

wanted a way of knowing how to hold each other accountable. And

these are all great reasons. There's 1000 other reasons why

we would want to have goals. But while they're all true, I think

that those are mostly side effects. I think that those are

benefits of goals. I don't think they're the real reason why you

set a goal. In fact, I think that the real reason, and the

only reason for a goal, the only purpose to have a goal is to get

you and your team to make the right decisions and take the

right actions to move toward your shared vision as an

organization. So this is specifically in the

organizational context. You might be able to come up with a

couple other derivations of the rule, if you will, in other

environments. But fundamentally, the purpose of a goal is to get

you and your team to make the right decisions and take the

right actions and move toward your mission, vision and values

as an organization. That's it. And if that sounds obvious, it's

because it is. But think about what happens when we get it

wrong, if we set a goal because we want to achieve a certain

result, or if we set a goal that we think is possible, and then

find out that it isn't possible, if we don't really have a clear

definition for goals, then how do we know whether or not we've

set a good goal? And even more importantly, this doesn't happen

this part of the year, but about three, four months from now, you

know it will. What do you do when a goal seems wrong? And

that's a really important question, and we've got to have

a way of knowing whether or not the goal is right, and it's

impossible to know that across all circumstances, whether the

goal should be this many million or this many million so that

that's out of the picture. We can't really do that, but we can

come up with a metric to really decide whether or not the goal

is correct for our team, and that is whether or not it's

moving us in the right direction, if that goal

continues to help us and serve us by getting us to make the

best decisions and make take the best actions, then it's a good

goal. Doesn't matter if you can achieve it or not. In fact,

that's almost entirely cultural. You'll see some groups love to

set goals that they don't stand a chance of achieving, but they

are moved to make better decisions and take better

actions, just by the sheer anticipation of the goal, by by

the excitement that it creates and the way that it stretches

them and gets them to think differently. It helps them make

better decisions and take better actions. Now, there are some

teams I work with that would just crumble under that kind of

pressure. They don't do their best work being way behind on

the eight ball. In fact, they do their best work by being ahead.

And so for each of these groups, those who do their best work

when they're under the gun, versus those who do their best

work in their head, the right goal is going to be completely

different, even if they're looking for the same result. And

the reason for that is because the purpose of a goal isn't to

be the right goal or not the right goal. The purpose of a

goal is to help you make the right decisions and take the

right actions. Really, really important distinction. And so

especially for those of you who've been in this position

before, you recognize that you get about midway through the

year and you realize we were taking something when we set

that goal. And so the question you have to ask yourself is

first and foremost, if you feel like a goal is not going to be

achievable, is it the right goal? Is it actually the right

one that we need to move us in the direction that we need to go

to achieve our mission, vision and values, and will it continue

to inspire us to take the right actions and make the right

decisions? If so, it's the right goal, leave it. Alone and don't

change it. However, if you just missed the mark and you set a

goal that's so unachievable but that it's not even relevant

anymore, then by all means, you must change it. Why? Because the

purpose of the goal is to not bludgeon you over the side of

the head when you don't achieve it. The purpose of a goal is to

help you make the right decisions and take the right

actions toward your shared vision as an organization. And

so I think it's really helpful to look at a goal through that

lens. Is when you're setting it, whenever you're pursuing it,

when you're setting other goals based on it, what you need to

know is, is this thing helping us to make the right decisions

and helping us take the right action? It really is the litmus

test. Now that's also really important, because just setting

a goal by yourself does absolutely nothing. I'll have

teams, especially early on, they'll set goals because

they're supposed to, right? That's what you do. You set

goals some operating system somewhere, some person, maybe

it's me, told them, You need to have goals. And so they set

goals, and then they just kind of go back about their life,

doing whatever they did. And every once in a while, they come

back and check on those goals. And, you know, it's a little bit

like a goal slot machine. You know, it's like, we don't know

if we got it or not. Let's just pull the slot and see what

happens. That's not very helpful, because that's not a

goal serving its purpose. If you set your goals and then you

don't look at them again until you review whether or not they

were complete. Not they were completed, then what power have

you given it to help you make the right decisions or take the

right actions? Virtually none. Now, interestingly enough,

there's still a benefit from setting those goals and writing

them down, even if you don't remember them. That's another

conversation for another time. We want to set goals that help

us make the right decisions and take the right actions. And so

when we're doing that, I have found it's really helpful to

recognize that there are not necessarily different types of

goals, but that goals set over different timeframes serve

different purposes within this context of making the right

decisions and take the right actions. And so I want to talk

to you, regardless of what your goals are called, when you set a

goal over each of these time frames, that'll make sense here

in a second, how do those best support you in making the right

decisions and taking the right actions? So I want to work

through those one at a time here. The first one is 10 year

goal, right? You'll hear this called the big, hairy audacious

goal. Sometimes it'll be called a mission or a vision, depending

on your definition of those, but this is like a long term out in

the future goal. And how can something that's that far away?

10 years is an eternity. I mean, think back to 10 years ago. What

were you doing now? And how well could you have predicted what

you're doing here today? Probably, yeah, probably not

great. And so we can't use a 10 year goal as if we're predicting

the future. That's not very helpful. But what 10 year goals

do very, very effectively is they set the velocity for the

organization. Now I'm using that word really specifically,

because if you're a nerd like me, and you know a little bit

about science and physics, you know that velocity is speed with

a vector, or it's motion in a direction, and it's such a great

definition for what a 10 year goal does. Because what it does

is it says, Hey, where are we going? Right? What big goal are

we? Where on the horizon are we headed? And then it sets the

speed. So it's not just where we're going, but how fast we

need to get there, and that's a really critical piece. So a good

10 year goal. Maybe it's a five year goal, maybe it's a 50 year

goal, but most folks it's somewhere in the five to 15 year

range. And for even most within that, it's about 10 years out or

the end of the decade. Some folks like to do the purpose

behind that type of goal is to set the velocity of the

direction and to tell your team where you're going and how fast

you need to get there, and in doing so, it should help you

create massive progress toward achieving your mission. Vision.

Values as an organization, 10 year goals are really, really

great for that, both the speed and direction. Once you know

your 10 year goal, you can start to map that to Okay. How much

progress do we made? Do we need to make? When do you need to

grow a lot over the next years and then stabilize over the

years after that? Do you need to stabilize over the next few

years and grow a lot after that? We like to think that the path

toward our 10 year goal is either a straight line or an

exponential curve that just gets better over time, and that's

never the case. It's almost always an S type curve or even a

set of S's between now and 10 years from now. But mapping out

where we're going and using that to start to figure out what our

speed and direction need to be is super, super helpful. All

right, let's move on three year goals. So there's this

interesting thing for executive teams. Now this is really for

the folks here that are in stages, 456, and seven, to some

extent, really four and five. But one of the things that you

start to recognize at that point is your growth goals become so

big that you no longer have the luxury of waiting to focus on

them until the year when you need to grow. And so for a lot

of my stage four and stage five clients this year, we spent most

of the strategic planning process not thinking about what

this year's goals need to be, but what their three year goals

need to be, and what has to happen between now and then. For

example, if you're in an industry that requires a ton of

technical expertise, you may be able to hire for that expertise,

but you may also need to home grow that expertise. And if

that's the case, that's not a couple months thing. For some

industries that might take a couple years. If you're building

out your sales team and adding another rep in a new territory,

they're not going to sell as much on day one as your existing

reps are doing on year 10. There's a ramp up period there.

And for many of my clients in many industries, especially if

you have a long sales cycle, that's a multi year process. And

so if you feel like you're regularly starting the year

behind, or you're trying to create growth? And it's just not

happening. It's probably because you're waiting too long, and

that's where the three year goal comes in, because what it does

is it tells you what you need to do this year to set you up for

the growth and success you want next year. And for any of you

who are familiar with my work, one of the things you'll know is

that in Stage Five, your job as the CEO is not focused on this

year, but to focus on what's coming in future years, and what

you need to do this year for those future years. This three

year goal will help you bring your whole team into that

discussion. It's really powerful, all right? Moving

along one year goals, right? This most kind of common

planning cycle. Everyone's got annual strategic planning that

they do in some way, shape or form, and we can still be

clearer, though, on what an annual goal is supposed to do.

And interestingly enough, this is what I think that it's

supposed to do. It's supposed to push back against the urgent and

keep the most important things first right. We've all heard

about tyranny of the urgent, and I think that our one year goals,

if they're set right, are the best barrier to falling prey to

the tyranny of the urgent. They allow us to keep the most

important things important for an entire year. There's a saying

that all of my clients now quote back to me, and I don't even

remember who I got it from. It's not my saying, but they said we

have a tendency to underestimate what we can do in the long term

and overestimate what we can do in the short term. And annual

planning is is the long term, you can make a ton of progress

over the course of a year, but only if you keep the most

important things as the most important things, and that's the

role of one year goals. And so again, if you set those at the

beginning of the year, and then you review them at the end of

the year, it's not going to tell you how to keep the most

important things important. However, if you set those goals,

and then you keep them in front of you, and you consistently use

them as you make decisions throughout the course of the

year, you'll find those one year goals become really, really

helpful in clarifying how you need to make decisions and

what's on. And that brings us to the next and this is probably my

favorite duration for goals, I think it's the most effective

way to set goals. You can do it at an organization level. You

can do it at a personal level. You can do it in your family.

But these are quarterly goals, 90 day goals, 13 week goals,

three month goals, however you want to describe them, there's

some interesting science around this. We're not going to get

into it. But basically, it, but basically, 90 days is about as

far ahead in time as you can think and still think about

yourself. And that's a weird way of saying it's about as far as

you can go and setting a goal that you still think you have to

achieve. There's some weird psychological stuff that happens

after that, where we actually think it's future self school,

not our goal, and we will do some stupid things because of

that, but quarterly goals, that's hard to do. Quarterly

goals all but certainly demand that you start taking action

immediately. That's not true for one year goals, a lot of one

year goals, you can wait a week or a month or even a quarter and

still accomplish those goals. Well, you can't do that in

quarterly goals or objectives, you've got to start making

progress on them as soon as possible, and that's what

they're there for. They are there to help you make as much

process progress as possible toward your annual goals and do

it as soon as possible. Quarterly goals are very, very

effective. They are the way that you achieve your one year goals.

Hands down best way to do it, if you're like some companies who

just set annually, annual goals, and you're like most of those

companies who get frustrated by your ability to achieve them, it

may be because you're not breaking them down into

quarterly emphasis and taking action on them at that level, a

very, very common sense and very common problem, and could be

just this answer to you. So if you feel like you're not making

as much progress as you should, as soon as you should, you may

want to either start working on quarterly goals or refine the

way that you set them. There's probably an issue in there, all

right, two more levels, sorry, three more levels, and we'll

wrap up monthly. I'm not gonna call these goals anymore,

although you'll still hear like called a sales goal for the

month or something along those lines, these are probably better

referred to as targets. They tend to be more KPI based than

project based for most folks. And what these are helpful for

these monthly goals is to help you know whether or not you're

executing effectively. That's what monthly targets do, really,

really well. And for this reason, you'll see a lot of

monthly stuff tends to be around the KPIs that you track as an

organization, things like revenue or profit or

productivity or efficiency, gross margin. These are all

targets that we typically review and track on a monthly basis.

Why? Because monthly targets are there to help us know whether or

not we're executing effectively. This is also true for those of

you who set monthly milestones for your quarterly goals, right?

What are those milestones there for to help you know whether or

not you're executing effectively for your quarterly goal? So

that's what monthly is for weekly is to make sure that you

are taking the leading actions that will result in the success

of your overall plan, right? So once we get down to the weekly

it's all about taking actions. And for those of you who are

trying to grow really quickly, you need to be taking the right

actions before they're needed, before they're due. You need to

be taking the right leading actions. And so that's why

you'll get into the discussion about leading indicators. And

leading indicators are almost always proactive, activity based

metrics. We're looking at the leading actions that we need to

take, not so much at this stage about the decisions that we make

we need to make, but about the actions we need to take. And so

weekly stuff is very, very good at saying, Are we doing the

things that we need to do that will end up resulting in the

success that we want? And then finally, daily, the most

important thing you need to do today, that's really what it

boils down to, and that'll give you a sense of clarity, give you

a sense of calm, it'll give you a sense of certainty, because

even if the world's changing around you, you can still have a

pretty good sense of what you need to do today. And so if

you're in an environment where there's a ton of change, like we

all are, if you're in an environment where there's a ton

of uncertainty, maybe your market is shifting, then

sometimes all you can do is just focus on the most important, the

most urgent, the most important thing you need to do today. And

you stack a couple of those days together, and you'll be back in

weekly territory. You'll be able to focus on your monthly

targets, and you'll be able to build up from there. And so I

just want to encourage you, as you guys are setting your annual

goals, pursuing your annual goals, reviewing your annual

goals, setting your quarterly targets, whatever it may be, I

want you to run it through that lens is each one of these things

helping us to make the best decisions and take the best

actions to move toward our mission, vision and value, and

if it is probably serving you really well, if it's not,

hopefully you got a couple of pointers over the course of this

episode that will help you and your team to set that and move

forward from there. And the last thing that I want to share as I

wrap up this episode is that when it comes to goals and

getting the right goals, getting great goals, getting the goals

that help you take the most, greatest, wonderfulest, being

silly, but help you make the best decisions and take the best

actions those setting those goals takes some time. It's a

skill that you need to learn to develop. And I'd actually say

each of those different timescales that I described is

its own skill. It's kind of like the difference in riding a

bicycle and riding a motorcycle, or if you want to go all the way

down riding a bike with fixed gears to a bike that has

shifters, it's a different skill. You have to learn to ride

it a different way. You'll be going at a different speed than

you were beforehand. And so the reason why that matters is

because it's worth your time to learn this deal and get it

right. You're gonna get it wrong at first. You're gonna set

terrible goals to start with, no problem at all, and you might

not achieve any of those goals. No problem. At all you might

achieve all of those goals. That's not if it was the wrong

goal in the first place, then who cares if you got it or not.

What really matters is whether or not you're learning the skill

of setting and achieving those goals. And so each time you set

goals, it's worthwhile to make sure that you take sometimes

almost as much time that you spent setting them as reviewing

them. After we do this a lot with my consulting clients, we

spend a lot of time reviewing what we learned from these

goals, what went well, what didn't go well, what we learned,

what we can do better next time. Because what we're doing is

we're actively working to develop the skill of setting

great goals. And what are great goals? They are goals. They are

targets. They are distant objectives that help you and

your team make better decisions and take better actions. I hope

this was helpful for you. It's been a conversation I've had

with lots of my clients recently, and so if they're

having those challenges, you might need to I thought it'd be

a great discussion for us here on the podcast again. If these

episodes are helpful for you, let us know. Love to hear from

you. I hope you enjoyed this episode, and I cannot wait to

see you next time. Take care.