(You can download my Yearly Growth Goals Template that I used on our team at HubSpot at the bottom of this post.)
We are nearing the year end and that probably means many teams are finalizing their growth goals for next year.
Just the thought of the planning process is probably jacking up your stress levels. After all, setting yearly growth goals in fast-changing environments feels like shooting darts blindfolded.
While there a lot of goal-setting frameworks out there, no matter which one you use, I have a few recommendations to make the process better.
1. Your Growth Model Should Inform Your Goals
Do not pick goals based on gut. Let me repeat that:
Do not pick goals based on gut. You are setting yourself up for failure.
The very first thing we teach in the Reforge Growth Series is how to build and use a forward projecting growth model. It is an essential tool when deciding between initiatives and setting goals.
You can use your growth model to do both a bottoms up and top down analysis.
Top Down Analysis
Lets say your primary metric is WAUs (Weekly Active Users) and you are currently at 100,000. Ask yourself, “At what number of WAU’s would it feel like we’ve made meaningful progress in the business?”
If your answer is to go from 100K to 1M WAUs, you then need to justify that number with your model. You need to understand how your inputs to WAU’s would need to improve to reach that goal. Do you need to increase virality 3X? Retention by 20%? etc.
Understanding how your inputs would need to change, starts to define the potential paths to hit your primary goal. You can then talk with your team more specifically about if hitting those improvements on the inputs is reasonable.
Bottoms Up Analysis
At the same time someone on your team is doing a Top Down analysis, have someone do a bottoms up analysis. The two should be done by different people to avoid biases.
Rather than starting with where you want to get your primary metric, start with the inputs. Go through each of the inputs in your model and ask:
- If you were to focus on that input, where do you think you could improve it to?
- Where does the model tell you you’ll end up on your primary metric at the end of the year?
Whether you do top down, bottoms up, or both the point is to use your model as a more rational way to set reasonable goals.
2. Define the order of operations to reach your goals
Every input is not created equal. It isn’t enough to say that you are going to increase virality by 3X, you need to say when you will do it by.
Time effects your inputs differently. For example, if you’ve decided that virality is a priority for 2017, you’ll want to keep in mind that the effects of virality compound over time. Therefore, its total impact will be much greater if you work on it early in the year and maximize the compounding period in which you can reap the benefits. A similar rule applies to retention.
3. Focus on strategies; don’t get distracted by tactics
Yearly planning is about defining the most meaningful broad strokes, not detailing every last tactic that will get you there. In fact, it’s impossible to accurately pinpoint your tactics right now, at the end of 2016, because many of those tactics will change.
Instead, focus on laying out potential strategies to reach your goal which give you the wiggle room to operate within them.
For example, let’s say to reach your output goal of 1M WAUs you need to 4X the new users from your Paid Acquisition team. Potential strategies within that might be increasing FB Ads users 50% with new audiences, find 2 new channels paid channels, and increased conversion rate from X to Y. The strategies compel you to understand if you have a reasonable path to improving your inputs, but leave enough room for your team to determine the tactical path to get there.
4. Assess Your Acquisition Portfolio
Yearly goal setting should be a time to look ahead and assess the big picture. One of the big picture items is your portfolio of acquisition channels. Every channel decays over time. The mistake is not anticipating it.
If you anticipate some of your existing channels to start decaying, then you need to leave room to move some resources to testing new channels. The outcome of these channels is not predictable so you shouldn’t include them as a definitive strategy to reach your goal. They should be icing on the cake.
It’s important to think about this question ahead of time, rather than confront it only when you’ve already started to see the signs of decay. It typically takes time to unlock a new channel so if you wait until decay has already hit your existing channels, you are in for a trough of sorrow.
5. Gut-check your goals “Above, Below and Across”
This last recommendation is perhaps the most important to giving your goals and methods the room and resources they need to live.
First, as a leader, make sure you review with all of the individual contributors on your team. You need them bought-in. They are closest to the front lines and are the best ones to assess if the strategies are reasonable.
Then, make sure you socialize “Above and Across.” This means you’ll make sure other teams know what your goals and strategies are More importantly you need to explain why the goals are what they are. To help get buy-in “Above and Across,” look for ways to articulate how you’ll help them. Conversely, plan out your asks, and explain how they can help you.
Growth can’t happen without the individuals and teams around you, so remember to leave room for socializing your plans and understanding how they can work together with the goals of others.