Why business leaders shouldn’t set goals

Don’t limit your potential, says Kat Wellum-Kent, founder of Fractional Finance
Kat Wellum-Kent
Kat Wellum-Kent

When we start a business, it’s commonplace to put goals in place as markers of success. When you make your first million, when you hire your first 10 employees, when you’re featured in your favourite business magazine; all quite normal goals business leaders might have in their minds to reach.

But is it wise to set goals? I argue that no, it isn’t.

The problem of ‘what’s next’

I always think about setting a goal like metaphorically climbing Everest. So much hard work is put into getting there, months of training followed by a hard, arduous climb. Getting to the top feels elating, like you could conquer the world. But then comes the descent and, for some, that climb down can feel deflating, even demotivating. That hard stop after achievement can spark worries about what’s next?

Losing sight of success

Goals can become such a focal point of a business’s journey, that leaders can lose sight of why that was the objective in the first place. For example, maybe an organisation is aiming to make £1million turnover in 18 months. However, this goal may not make the most economical sense; that turnover may not actually be profitable.

Some goals are initially made with the best intentions but can then take a business in completely the wrong direction.

A rapidly changing world

Setting goals can risk trapping you and your business into a rigid way of thinking. As we all know, the world around us changes faster than we can anticipate. Strict goals can be hard to manoeuvre away from, causing tunnel vision.

This way of working could mean that the more agile competition outpaces you as they pivot and flex their goals to work in the current landscape.

What should you have instead of goals?

Throughout this, I’m certainly not saying to aimlessly wander through your business hoping that something sticks. Instead, I’m an advocate for having direction, rather than defined goals.

Instead of focusing on monetary value or headcount, understand what type of business you want to be, who you want to help, and the culture you want to instil. Alongside this, set measurable key performance indicators that evidence that you’re travelling in the right direction.

For example, if you want to be a business that excels in supporting employees with work/life balance, then you can measure overall staff happiness year-on-year. While this isn’t setting a defined goal, it does enable you a direction of travel, understanding where you may need to make changes in your organisation to support physical and mental wellbeing.

Is there room for a big, hairy, audacious goal (BHAG)?

First coined by Jim Collins and Jerry Porras in their book Built to Last: Successful Habits of Visionary Companies, the idea behind a BHAG is that it makes teams think big, and to come up with ideas and goals for long-term success. This is perhaps the only exception to my ‘no goals’ rule.

Having a huge goal, one that may feel incredibly daunting to begin with, is a great idea. It’s not easily reached and may take a long time to get to. It’s the North Star that guides you and your team in every other endeavour. It’s so big however, that any changes you make in your business in the short- and medium-term aren’t going to have an effect. In fact, those pivots might make the large goal more achievable.

It's instilled early on in business that having goals is important to drive success and improve motivation. I argue that goals can be limiting and can get in the way of progress and innovation. Instead of setting goals, leaders might want to consider a direction of travel. A way of working that is woven through the very fabric of a business that informs what you say and do, who you help and how, and the wider impact you have on your customers, employees, and stakeholders.

By having a clear direction of travel, you’ll find your purpose and it’s within this purpose that you’re likely to find success.

Written by
Kat Wellum-Kent
Written by
January 2, 2024