Goal or Consequence?
I visited a producer of ecological, high quality and premium olive oil in Spain. The passionate owner Toni explained about the origin and history of his business, the production process and we finished with a tasting. It taught me something completely new about the quality of olive oil.
Toni also explained to me that they exclusively pick the highest quality olives and use the same quality principles in their production process, obviously all in an ecological way. And that, even in bad crop years (such as last year), they do not make concessions to those principles despite not hitting the desired yield and returns. As he said: “our return is not a goal, but a consequence.”
It reminded me of the things I did in my career, in order to hit financial targets. Such as the usual cutting of marketing or training spend (I am definitely against that one now), asking suppliers to delay invoices to the next financial year or stocking up the market in the last month of the year with promotional sales to discount-eager customers.
It always meant I had to make concessions somewhere. Either in awareness, capabilities of the team or simply by postponing a more structural issue to the next financial year.
Not One Nor The Other
For Toni, his business principles, his Why, are so important that he’d rather suffer a financial loss than doing concessions to them. Sounds okay if you manage your business as an ideology, but most probably not an appealing thought for many.
For large (public) corporates, the short term financial targets are so important, that they’re prepared to make decisions, which may potentially hurt longer term result or goals. Great for shareholders return, but is that sustainable?
The question is: Is there a balance between business targets, the circumstances and the business principles?
We believe that it starts with the definition of a vision and objectives. Our blueprint way of defining objectives is SMASH. The main difference with the well-known SMART objectives is that it aims to better address the need to balance between stretching, achievable and harmonious objectives. Between hard targets, market circumstances and business principles.
Whereas the S and the M do not differ from the SMART definition, the A, S and H are offering the better balance.
Gold medal winning sportspeople have one thing in common. They “stretch” themselves. They will not set their targets based on the circumstances or on results of the past (and you know those don’t offer a guarantee for the future), but aim for an even higher result.
It is a perfect combination of commitment, knowledge and superbly trained capabilities that allow the human body to do that extra effort, find that extra motivation and energy it would normally not find. Hence that is why so often records are broken during great tournaments.
Stretching objectives in business are those that include necessary breakthroughs leading you to become a successful (golden) business. A business leading in satisfying not just current, but future customer requirements and expectations too. It is built on an excellent base business (excellence in execution) ,existing strategic growth initiatives and a coaching leadership advocating that “golden future”. A leadership inspiring and motivating the entire organisation to commit to and realise breakthrough growth initiatives.
It is a way of “creating” the future, based on the idea that if you believe and commit to a certain vision, you can make it come true. Like JFK’s speech in 1961: “We choose to go to the moon”.
In my previous career with McCain Foods I was lucky to witness, participate in and contribute to a “Create the Future of McCain” transformation process based on this principles. The current Chairman and CEO of Mondelez, Dirk van de Put, was the McCain CEO in those days and a strong advocate and driver of this transformation. In this interview about the Mondelez 2030 vision he explains the essence of this approach.
Whereas achievable in SMART may be taking into account the actual circumstances (market situation, competition etc.), in SMASH it is defined by what you think should be achievable to become a successful business. It is not limited by today’s circumstances, but by the circumstances the business can create over the plan period. Is your commitment driven by the circumstances, or do your commitments create the circumstances? Love that question.
JFK’s landing on the moon was not achievable the year he launched the idea (1961). The 1961 circumstances did not allow for committing to such a goal. But he believed it should be achievable at the end of the sixties, and therefore asked the NASA scientists to commit to the vision and create the circumstances.
The harmony part of the objectives covers a lot of elements. Harmony between stretch and achievability. Harmony with the business principles, the vision, strategies, the values, the why. Harmony with the customer objectives, with the environment etc. etc..
It is the harmony which protects businesses from doing crazy things in order to “hit the target” or to “satisfy the shareholder”. But also the harmony which stops organisations, teams and individuals from leaning back and accepting things as they are.
How SMASH are your objectives?
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