Because we are beginning a new year, it seems natural for many of us to set new goals for our business. We set goals to earn X dollars this year, or to increase our email list by Y percent. We do this because we know our goals need to be measurable so we know when we achieved them.
When I was speaking with my coach earlier this week she pointed out that these types of goals are known as outcome goals – based on getting a certain result. The problem with outcome goals is ultimately they are outside of your control.
Yes, you can do things like provide excellent service, have competitive prices and marketing like crazy to increase your chances of achieving an outcome goal. However, the final decision to buy is not in your hands. And all sorts of things outside your control can impact the outcome: a competitor’s fire sale, a downturn in the economy, a new product competing with yours, the weather.
The downside to this is when you don’t achieve an outcome goal because of factors outside your control, it is easy to loose your motivation and enthusiasm.
Does this mean we should stop setting outcome goals? No. They can be motivational and are easy to measure. But we also need to set other types of goals. Specifically, performance goals and process goals.
Performance goals, also known as mastery goals, are about how you perform. They measure how good you are at what you do. Since you are comparing your current performance to past performance and measuring improvement, this type of goal is entirely within your control. Even when you don’t achieve an outcome goal, you can achieve a performance goal related to the same area.
Process goals are how you are going to do certain things, usually how you are going to achieve your outcome goals. What specific actions will you take? Like performance goals, process goals are entirely within your control.
How does this work in your business?
Suppose you set an outcome goal of selling an additional $5,000 this quarter. You might set a performance goal for yourself to become a better salesperson. Becoming better at closing sales will make it easier for you to achieve your outcome goal.
To achieve your outcome goal you will also want to set process goals. Suppose you know from past experience that the average new customer spends $500 with you. To achieve your outcome goal you will likely need ten new customers. Also suppose that for every ten cold calls you make, you get an average of one new client. Based on past experience, you would likely need to make 100 cold calls to get ten new clients and earn that additional $5,000.
Therefore your outcome goal is $5,000. Your performance goal is to improve your sales skills and your process goal is to make 100 cold calls.
At the end of the quarter if you made your 100 cold calls and found that your improved sales skills meant you landed 15 new clients instead of the projected ten you could be very happy with having achieved your process and performance goals. But if the slower economy meant your new clients spent $250 each instead of the $500 past performance has projected, you would still not have achieved your outcome goal.
If you review your goals and find that you have mostly outcome goals, you might want to consider adding a few performance and process goals to your list.
Andrea J. Stenberg
