Historically, I’ve kinda thought that goals for businesses are a waste of time.
After all, aren’t the goals always the same?
• To grow
• To increase profits
• To get more customers
It’s all so obvious it goes without saying, so I’ve preferred to “cut out the middle man” and just jump straight to the more fundamental question of:
“How can we make this business the most healthy, thriving, high value version of itself it can be?”
No goal required.
However, recently, I’ve started to change my view on this slightly. Although I still think that goals are unnecessary for a business when developing strategy, I’ve come to realise that they may still be useful if done right.
• Great goals can provoke great strategy
• Great goals can also fuel strategic execution
• And, just as importantly, bad goals can provoke bad strategy
So in this piece I want to explain the difference between a strategic goal (i.e. a goal that supports a great strategy), and a tactical goal (i.e. a goal that undermines strategy), so that you can start using goals effectively.
You don’t have to set goals, but recently I have. And to be honest, the result has been magical.
Let’s get to it.
There are three key ways in which a (bad) tactical goal and a (good) strategic goal differ:
Tactical goals —> have known solutions
Strategic goals —> have unknown solutions
Tactical goals —> are achieved by doing “more”
Strategic goals —> are achieved by doing “different”
Tactical goals —> are piecemeal
Strategic goals —> are holistic
In the abstract this is probably pretty confusing, so let me illustrate it with a pair of non-business examples which neatly show the difference:
Tactical goal: Lose 20lbs
Strategic goal: Become a movie star
First up, let’s think about how we would go about achieving each one of these goals. To lose weight, the solution is known. Just eat less, exercise more, or do some variation of this, and you’ll get your result. Also note how not only is the solution here known, but it also relies on doing something you’re already doing more (or less in the case of eating). It’s simply a question of turning the dials; increasing the effort to increase the output.
Finally, in the context of your whole life, it’s also a pretty narrow ambition. You don’t have to change “everything”; you just need to tweak a couple of relatively minor things (diet and exercise) to get what you want.
This is the definition of tactical.
Now compare that to becoming a movie star. Here, the solution is not obvious. It is not known. There is no tried and tested path to follow here. Every movie star became a movie star in a different way, which was highly particular to their individual context. Not only that, but if you’re an ordinary person, you’re probably going to have to change your behaviour radically to achieve this goal. You can’t do it by continuing what you’re doing now, “but a little bit more”. You’re going to have to take some bold, speculative punt. And chances are, that’s going to involve shifting your whole life. You’re gonna have to move to a new place, hang out with new people, get a new day job, learn new skills – the entire ship is going to have to turn.
That is the definition of strategic.
Now then, if we apply this same logic to business, we can see how your choice of goals can have a constructive or destructive effect.
If you set a tactical goal, you will come up with a tactical solution. An example of a tactical goal in a business setting might be something like “increase rate of sale”, or “get more distribution”, or “grow 20%”, or something like this.
All of these goals can be achieved by pushing harder. Expending more labour, more sweat, more cash, in pursuit of marginal gains. This is not strategic, and indeed there is no strategy required. This is precisely why most business have no strategy, and are perfectly content that way: because they are setting tactical goals, with tactical solutions, and are simply grinding their way to their mediocre vision of “success”.
But if you set a strategic goal? Then grinding isn’t gonna cut it.
A strategic goal is something with an unknown solution – which is precisely why you need a “strategy” of course! The “strategy” is the proposed solution to the problem. Examples of strategic goals might be change-based (e.g. transition the world to electric vehicles), or they might be based on extreme growth (e.g. get a pair of our shoes in every household in the country, or grow 10x in one year). In either case “what got you here isn’t going to get you there”, hence why you need a strategy.
(It’s worth noting that growth goals can be tactical or strategic. The difference is simply the scale of the ambition. “Realistic” growth goals are tactical because you can see a path, and “unrealistic” ones are strategic because you can’t.)
As you can see then:
Tactical goals will smother strategy.
Strategic goals will provoke it.
Having trouble coming up with a good strategy? Then set a bigger goal. Set a goal you can’t possibly reach the way you’re going right now. The chasm you’ve opened before you will call forth the need for a strategy, and your brain will kick into the right gear.
Beyond this technical advantage of strategic goals is a psychological one:
Strategic goals are exciting.
They turn you on. They turn your team on. They are motivational and inspirational. And that stuff counts.
Speaking for myself, a few months ago I set just such a strategic goal for my business (when before I had no particular goals at all). And the results have been kinda magical – mystical even.
By laying out an unreasonable goal and focussing on it, it’s almost like the universe has shifted to allow it as a possibility. Or, if you’d prefer a less woo-woo explanation, my own perspective has become more strategic as my mind has grappled to bridge the arbitrary chasm I’ve created.
Perhaps then it’s a chronic lack of ambition that’s to blame for the chronic lack of strategy we see around us? If you don’t create the need for the strategy, then you won’t create the strategy.
So decide what you want.
The mediocre tactical?
Or the extraordinary strategic?
And then set your goals accordingly.