Goal Setting: How to Set Ambitious Targets, Motivate Teams, and Inspire Extraordinary Outcomes
Note: this is the second part of a series on bringing data to life and driving outcomes. Click here to find the first post: “Metrics, Metrics Everywhere: Elevate Product Development with High-Quality Success Measures”
The essence of product analytics can be distilled into the two following actions:
- Uncover an insight, often by taking a creative analytical approach
- Drive action, through effective communication to an interested audience
Data storytelling is a critical skill; without it, too many interesting analyses don’t achieve their potential. Goal setting provides a powerful way to show progress, explain trends, and paint a vision for the future. In this post, we will go deeper on the importance of goals, explore the primary use cases within product teams, and unveil an improved framework for setting goals to truly mobilize your organization.
Why Set Goals?
Let’s start with the science. Researchers have shown that goal setting actually changes the structure of your brain, allowing it to be more optimized to achieve a goal (Stuifbergen et al). A more challenging goal provides much greater motivation than an easily attainable one (Becker et al), while goals that subjects are highly motivated to achieve result in greater confidence of success (Cole et al). Needless to say, goal setting has been heavily linked to greater success.
Beyond the research, I get most excited about how goals provide accountability and urgency.
- Accountability: a team without goals is like a sports team playing without a scoreboard. While you can still measure progress without goals in place, it becomes easier to take credit for unintended impact or declare minor upticks a major victory. Establishing a goal instantly creates a threshold for success, of which the team is then accountable for delivering.
- Urgency: time is a startup’s most valuable resource. In most industries, there are decreasing barriers to entry due to the power of technology, as platforms like AWS allow great ideas to scale quickly. Each week is now a precious opportunity for learning. Compounding is real; a team that more efficiently reaches its targets frees up additional days, weeks, or even months for additional priorities. Goals provide a nudge for this increased productivity and shorter time to impact.
Use Cases
Before we get into product-specific uses, it’s important to note that anyone can (and should) set goals for their own development. I have found it useful to identify personal and professional goals on a six month cadence with quick monthly check-ins along the way to assess progress.
At both the company- and product-level, each north star metric should be accompanied by a goal. As a reminder, north star metrics represent the key measures of success for a company or team (you can learn more in last month’s post). A company’s north star should be consistent for at least 12 months, so setting a target for the next year is often a good time window. At Klaviyo, we set ambitious goals for our company north stars at the start of each calendar year. For a given Product Area, a 6–12 month window is typically effective. Pairing a north star metric with the right goal further emphasizes the importance of this success measure and provides an opportunity to celebrate successes and better learn from failures.
Goals should also be leveraged in the roadmap planning process for each Product Area. A framework such as OKRs (Objectives & Key Results) references goals in its name, as a key result represents a target that a team hopes to achieve. OKRs are usually set on a quarterly basis, meaning more frequent goal setting. I won’t be going deep on OKRs in this post, but I’ve found Measure What Matters to be a worthwhile read on the subject for those who want to learn more. Regardless of the product development framework or the cadence, incorporating goals into your process provides those dual benefits of accountability and a sense of urgency.
Goal Setting Process
Now that we have established that goals are important and where they are used, let’s get into the actual process for bringing goals to life. To begin, I recommend asking yourself the below questions to help you gain a deeper understanding in the following areas:
- Understand the metric
- Understand the baseline
- Understand the investment
THE METRIC — what is the precise definition of your success measure? Can you decompose it into one or more key drivers? Is this a measure that my team or company is familiar with, or will I need to educate?
THE BASELINE — what are the historical trends? Any seasonality to consider? If a new metric, have there been similar efforts that you could consider using as a guide? Note that the art of forecasting necessitates its own dedicated post, but I recommend Superforecasting as a quality read in the meantime.
THE INVESTMENT — how many resources are allocated to our effort to move a certain metric? Be careful about setting an aggressive target when you have minimal resources; while this does inspire creativity, it is likely a path to failing to meet an unrealistic goal.
Guiding Acronyms
With these insights in mind, we can now select a goal and choose how to phrase our quest to achieve this target. The most common guide used today is the SMART goal framework, which stands for the following:
- Specific
- Measurable
- Attainable
- Relevant
- Time based
There is a reason why this acronym is so popular. It is easy to remember, and each of the characteristics are representative of an effective goal. However, it is overly simplistic. In fact, SMART misses several aspects necessary for a goal to be truly inspiring.
Fortunately, there is an alternative, one which captures the full range of benefits of a powerful goal. I am excited to share the following:
Let’s learn more about each of the elements of a DAY-UMM goal!
- Direct — the success measure and goal should clear, easily understood, and unambiguous
- Ambitious — a goal should encourage taking a big swing; achieving a small, incremental optimization deserves no celebration
- Yellow / Green / Red — effective goal tracking is critical for accountability. A popular method is the traffic light system, where you score your progress at a regular cadence using yellow (at risk), green (on track), or red (behind)
- Unifying — a goal should bring the team together in alignment
- Memorable & Motivating — most importantly, can you tell a story around the goal that rallies the entire team and pushes them to do more?
The last two M’s are critical. Be thoughtful in your phrasing, as a creative way to communicate a goal can make all the difference. I recommend not just using a number, but also framing your goal to something that makes it more inspirational. Examples might include a particularly significant milestone, a comparison to prior performance, or an industry benchmark / a standard set by a competitor. This extra effort is really important for a goal to be sticky and stay in the minds of your team, subtly influencing behavior and overall impact.
Let’s dive into a mini-case and bring this DAY-UMM goals framework to life!
You are responsible for growth in new users for a given feature and are hoping to set a target for this metric. Last year, this feature added 4,000 new users, which was twice as much as the prior year (2,000).
Using the SMART framework, we might opt for a growth target above last year’s 4,000 new users. Perhaps 25% growth to 5,000 new users this year. This checks each of the SMART boxes (specific, measurable, attainable, relevant, and time based). But is it inspiring? I think not.
Let’s forget that SMART goal and set a DAY-UMM goal instead:
This year, we are targeting 10,000 new users, which represents even faster growth than last year, while growing off a base twice as large!
Does this satisfy our framework?
- Direct — yes, it is clear we are tracking new users of the feature
- Ambitious — absolutely yes
- Yellow / Green / Red — yes, we can track monthly and grade based on our trajectory
- Unifying — yes, all team members must contribute if we want a chance to achieve this target
- Memorable & Motivating — yes and yes, the story practically writes itself
We actually used this type of language on the Uber Growth Team while setting a goal for trip growth. The six month period trying to achieve this truly ambitious goal was one of our most prolific and innovative, and we still reminisce today about how powerful of a goal it was!
One final point of emphasis: I strongly believe that “ambitious” is a much better descriptor than “attainable” (from SMART). However, note that my term is not “aggressive” or “absurd”. Strike a healthy balance with your goals so that they represent a stretch, but not something that will be impossible to achieve. You should be able to craft the narrative by which you succeed, even if several of the assumptions are unlikely.
In closing, goal setting has scientifically proven benefits while also providing accountability and a sense of urgency to teams. Regardless of whether you are setting goals for north star metrics, OKRs, or a different purpose, use the DAY-UMM goals framework to inspire your team. And if you nail the delivery, an all-too-common reaction is found below:
