Think Process First, Goals Second #BusinessTips - The Entrepreneurial Way with A.I.


Saturday, July 6, 2024

Think Process First, Goals Second #BusinessTips


Last week, I was listening to an entrepreneur who shared that he likes processes much more than goals. This concept rings true with me as well. Goals are important because they help us focus on where we’re going and how we’re measured (especially SMART goals). However, it is much more important to spend time on the process, especially the processes within your control, that will ultimately help you achieve those goals.

Let’s take a simple example: sales. Suppose you have a startup, and your goal is to generate $1 million in new revenue this year. Typically, you would divide this into quarters, potentially incorporating seasonality, and set a goal to sell $250,000 each quarter. At the end of the year, you would add up the quarterly sales and compare them to the annual goal of $1 million to assess performance. This approach has value and is necessary, but it is much more important to focus on the process and ensure it results in the desired goal. 

For this sales example, the process would involve the number of cold calls made per day, the number of emails sent, the number of meetings scheduled, the number of meetings attended, the number of proposals sent, the number of proposals moved to the next stage, and the number of proposals closed as deals, and so on. It starts with the things that are within your control. If I need to make 50 cold calls a day to achieve a certain number of demos, proposals, and deals, it is 100% within my control to make those calls. If I need to attend two tradeshows a month and talk to 100 people at each tradeshow, that’s within my control. The process needs to be the focus, knowing that you have designed and organized a process that allows you to achieve your goals.

Over the years, I’ve seen many entrepreneurs set goals without having the underlying process. Even if they did, the process might not have been feasible to achieve those goals. Common examples include wanting to sign up 10,000 users for a product or wanting to raise $5 million in venture capital. These could be reasonable goals, but without a clear process leading to the outcome, it’s hard to know if these are worthwhile and achievable goals.

Two ways to approach this are top-down and bottom-up. The top-down approach involves setting a goal, such as signing up 10,000 users, and then working backward to develop a process to achieve it. You then assess whether that process is reasonable, feasible, and financially viable. The bottom-up approach starts with identifying a reasonable process at the current time and for a given duration. You then estimate how many users you can sign up per day, week, or month with this process. At the end of the year, you can achieve a certain number of users. This method involves starting with a process that works today, understanding the current outcome, extrapolating that over time, and then setting a goal based on that outcome. In the first example, we pick a goal and try to work backward with a process to achieve it. In the second example, we start with the process, evaluate the likely outcome, and then set a goal based on that outcome over a period of time. 

Entrepreneurs would do well think process first, goals second. Goals are important and part of achieving great things, but a process that is within your control is more important. Continually refine the processes and ensure the outcomes are aligned with the goals.



David Cummings, Khareem Sudlow