Setting Goals : Moonshots and Finish Lines
There is a school of thought that you should set “moonshot” goals, so that even if you fall short you’ll end up in a better place than setting tentative goals.
Here’s the problem if you set a moonshot goal for execution : say your team launches an app aiming for 1M DAU, and the end of the first month it’s at 5k DAU. Folks are disappointed but no-one really thought you’d hit that immediately, so it’s OK. You line up your next set of features/changes and ship the update and your DAUs increase to 10k. A 100% increase(!) but you’re still not at that 1M DAUs you’ve been excited about. The 100% change, which is a strong movement, becomes seen as a failure on some level. You repeat this cycle and it doesn’t take long for the 1M goal to become something folks give up on, or it even becomes demoralizing.
To avoid this you need to separate product goals from execution goals. Your product goal should be to reach 1M DAUs and that’s how you should think about the product (the audience, how disruptive it needs to be, what marketing you need, etc.). Your quarterly execution goals, however, should be based on projections of how current metrics can be changed based on the product updates you are making. The execution goals can be ambitious but should never stray into wildly unrealistic. This way the team feels the satisfaction and reward from achieving or exceeding the goals, and is motivated to meet the next ones.
This isn’t an opinion based on a thought experiment; I’ve seen the opposite approach in action.
Yahoo’s goal-setting process tried to combine moonshots and execution and the result is a poster-child for poor execution. Products set quarterly execution goals with 100% of goal expected to be a stretch (the ‘moonshot’). Recognising that 100% is a stretch goal, teams are also told that 70% achievement of the goal is considered great and that you’ve “met your goal” at that level. Say what? Bonus payouts are 100% if you achieve 70% of your goal.
This schizophrenic approach leads to everyone immediately seeing “70%” as the actual target and, worse, coming to accept that 70% of any goal is acceptable. You also hear executives making comical statements like “we achieved 65% of our goal which is 93% of 70%, so this is really great!”. I will know it’s time to quit the software business if I ever find myself saying things like that.
Think about your execution goals : make sure your teams are celebrating wins, not on an infinite treadmill.
