We spoke about creating a SMART plan, creating actionable goals, and ACTing (Action Through Change) with accountability in the previous sections. As we draw closer to executing the plan, we must first define success. Success can be tracked and measured with Milestones and Key Performance Indicators (KPI), explained in detail below.
What Gets Measured, Gets Accomplished
Navigating the world of business can be difficult. Starting without a plan can cause friction to even the best ideas backed by unwavering drives and passions. This article conveys two planning metrics instrumental in supporting your ideas: the setting of navigational milestones for the desired destination and GPS-led key performance indicators to get you there.
Milestones are the significant moments of accomplishment that mark your company's development and growth. They are the destination of your SMART goals, proposing important deadlines (milestones) management must meet, the budget for each portion of the plan, the manager accountable for execution, and sales goals for each aspect. For example, Sarah Jones will lead the marketing team to launch the crowdfunding profile by March 30, tasked with scheduling five investor meetings weekly with a $1,500 budget.
Key Performance Indicators are crucial for growth planning, as the downfall of many businesses throughout their lifecycle is due to vanity metrics. Vanity metrics are the typical "busy work" that comes to mind. For example, properly setting up a communication system is vital to operations, but focusing most of your day on administrative tasks versus sales efforts will not be as effective in growing the company. Simply switching your measure of success from "tasks completed" to "number of closed sales meetings" is an example of a great key performance indicator. Successful KPIs are extremely specific on launch and grow to become more inclusive and general as the company grows, and high-level attention is required.
Here are some tips to get you started on creating KPIs and Milestones (more below):
- Specific milestones: This includes the target date, an ambitious but reasonable goal, and complements your actionable steps and SMART goals. In general, completing a milestone should give the entire team an enormous sense of accomplishment and sense of celebration. Aim for small milestones on launch, such as completing your team and landing a client, then quickly scale to 12-36 month milestones such as significant revenue goals, team development, and product offerings.
- KPIs are the analytics to success. To avoid vanity metrics, set short-term indicators of success and complement them with long-term overall measures of effectiveness. For example, choose brand exposure and revenue-generating metrics instead of administrative tasks in the short term, and choose vital growth components in the long term. A practical long-term goal would be "team effectiveness and profitability" instead of "growth in company size and expansion." A practical short-term indicator would be to increase social network new contacts by 500 monthly.
- Champion your idea. Your team must agree and be proactive to achieve the metrics and milestones set, requiring more than just input and buy-in. Selecting team members to fully embrace your idea and help to model it is crucial. An effective team to champion and improve the metrics and plans will be highly successful.
- Track Progress. Set specific dates and break each milestone and goal into smaller actionable steps. Encourage your team to provide feedback and suggest improvements or ways around obstacles.
Milestones track your progress and are much more than specific dates for a project. Milestones mark the growth of your company rather than small detailed tasks. Milestones should include goals you would like to have accomplished but are generally more effective when incorporating considerable achievements and their impact on your company. For example, an incredible feeling of accomplishment is having the first client/customer pay for and enjoy your product or service. This is a memorable and inspiring milestone for the team, but the second and third will have diminishing returns. A better second milestone would be specific, such as "reach ten clients by x date" and, better yet, "enough recurring client revenue that we are breaking even."
To conclude, you must first define the action in order to ACT. A small group working towards common goals and clearly defined expectations will have an exponential edge over a larger group with ineffective structure and leadership. Be specific, be ambitious, and be reasonable.
We will discuss implementation and execution in Part 5- Going Beyond Planning to Execution - Action Changes Things (ACT).
Action Plan Building Series