All that glitters isn’t goals. Or, maybe we should say, not all goals glitter.
Businesses put a lot of effort into setting goals, defining metrics and pinpointing objectives—but are they doing it well? To be effective in reaching a goal, a business must first be effective in setting one, and, while specific goals may be different for a start-up than they are for an international corporation, the struggles behind setting the right goals can often be the same. So, how should businesses approach setting goals in order to be the most effective?
In other words: is your business worth its weight in goals?
In this episode of The Wrap, Chris Mason, the founder of Mindshop, joins Paul and Kim to discuss how businesses should approach goal-setting, how to gather the right information that can guide you through the goal setting process and how to rally your organization behind common objectives.
After listening to this podcast episode, you’ll be able to:
About Chris Mason
Chris Mason is an experienced business leader and an owner and director of several privately owned companies, including Mindshop, a learning and development solution for business advisors. His PhD in Industrial and Organizational Psychology led to his research on change management and a new theory of change success. He continues to research leadership and organizational issues. He is an author of two books, Value To Others (2017) and Change Success (2019).
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Intro (00:00) Welcome to The Wrap, a Warren Averett podcast for business leaders designed to help you access vital business information and trends when you need it so you can listen, learn, and then get on with your day. Time is tight, that’s why our advisors have wrapped up today’s most timely topics into a podcast with actionable advice. Now let’s get down to business.
Kim (00:22) Hey, Paul.
Paul (00:23) Hey, Kim.
Kim (00:24) How are you today?
Paul (00:25) I’m doing good. How are you?
Kim (00:26) I’m great, and I’m really excited about this. Anyone who knows me knows that I love nothing more than goal setting, and a new year is just really exciting for me. My husband and I actually go away to the beach for the beginning of the year and we spend the day doing goal setting, which sounds really romantic, but we love it, or maybe I love it and he loves it because he loves me. I love talking about goals and setting goals, and so we’re really fortunate today to have a guest with us, Chris Mason. Chris is a business leader and an owner and director of several privately-owned companies, including Mindshop, which is a learning and development solution for business advisors, which I have been an accredited Mindshop facilitator for over 10 years now.
Paul (01:16) This is exciting.
Kim (01:17) Yeah, and Chris, he actually has a PhD in industrial and organizational psychology. He developed a new theory on change success and he’s just a very fascinating business leader and I think he’s going to be able to bring a lot to our listeners. So I’m really excited to welcome Chris. For all of our listeners to be prepared, Chris is actually joining us from Australia, so he’s getting up very early in the morning for our afternoon recording, and he is obviously calling in. This is the first time we’ve had a podcast recorded over the phone.
Paul (01:52) This is our first international podcast,
Kim (01:55) Chris, thanks for joining us today.
Chris (01:57) My pleasure.
Kim (01:58) So as we talked about, we just celebrated the start of a new year and a new decade and many businesses are looking at how to set new goals for their company. So what are some of the first steps that business owners should take as they try to create their vision?
Chris (02:12) I think they’ve got to get clarity around what their competitive advantage is, but I think one of the things that they need to be able to document is their assumptions. They often miss things like what is my competitive advantage and what are my competitors going to do? Is there likely to be any new entrance? Is there any risk in what we’re doing? Are we going to lose key customers or key staff members? The goals aren’t picking up the people missing, and I think in part it’s because of the rate of change. People have weaknesses in their succession plans. The big one for me is the emerging capability, say they’d not really seeing enough time what capabilities they need in the future in order to be competitive interest free.
Paul (03:10) So they don’t need to keep doing the same thing year after year, they’ve got to instill something new, some new mindset, some new idea or concept, and not just keep doing the same stuff. Is that correct, Chris?
Chris (03:22) Yeah, I think that if they’re finding they’re having grandhog years is that’s an early warning sign that they’re going to end up having compressed margins and they’ll see it, but hopefully they see it enough time to be able to react to it and come to people like us that can give them the structure, the accountability and the innovation that they need to be successful.
Paul (03:51) So most people will assume success means growth, you know? Are there any blind spots businesses have when identifying how they want to grow? And kind of second to that, if they aren’t setting goals, what is the common reason for that?
Chris (04:08) I think they almost think it’s too theoretical and I hear them say, “That doesn’t work for me and my business. We’re just having to react to whatever our customers are asking of us.” And in part, it’s because they don’t have clarity around the ideal customer. In my case, I have taken almost touch and feel that person. I know exactly what I’m looking to find, that means I can see it when it appears so I’m not sitting there hoping they’ll just take on any business, and I think that’s a mistake they do. They just look at revenue and they don’t think about gross margin, they don’t think about net margin, and they don’t think lifetime income. So I always think about, when I’m winning any new client, that I want to keep this client 20 years and I can ask myself that question right at the start, “Is this prospect capable of giving me that advantage that I want, because that’s how it works.” My business model is old, designed around long term, high capability, high potential people, and that’s the only ones I work for because at my age I’m not working for the money. I’m working because I want to enjoy myself, I want to keep growing and I want to put back into the community, and I don’t want to work with people that aren’t worthy of that.
Paul (05:36) You have a passion for where you are and why you’re there and so that passion is what kind of drives you, and you just want to find folks that are similar in that nature.
Chris (05:47) It’s always good to ask someone why they do what they do, and in my case when I was 35 I was running a public international company, you know and I was so proud to get that job, only to find that when I got in it was an absolute mess. My board was ineffective and I had to sort that myself and it was more good luck than capability back then, but it did make me decide that I would set up a support mechanism for young leaders which I’ve done, which is Mindshop, but I actually take my own medicine and I’m a owner and director of companies up to 400 million size because you actually make more money of it, but more importantly, I’m putting myself in harm’s why every day. I’m always striking increasingly difficult matters and I find that how I built my personal capability because yeah, I’ve got a PhD, that’s just knowledge. It’s the application of that knowledge that builds capability.
(06:46) So, Chris, the smart goals, the specific, measurable, attainable, relevant, timely, that whole concept has been really popular for goal setting for many years. Is that the best framework for businesses? And what else should they consider?
Chris (07:01) Look I recognize smart goals, but if you go into the Mindshop toolbox and it’s not there, what is there is called OKRs, and that stands for objectives and key results. It’s like smart goals on steroids. So basically, imagine if we’re setting a goal for the organization and with our board and we set that up and we understand exactly what our objectives are. If that didn’t work out, my objective is to grow by 20% compound growth this year and do that for the next five years, then I can work out what the key results I must achieve as a board to be able to do that. And then I can take that and I can flow it down to the next level, to the next level, to the next level, hopefully it’s not too many more after that. And it’s much easier flow, but what been doing that, it still needs to be smart, it needs to be specific and measurable. But we prefer OKRs. Smart is good, I’m using them, but I think above that, OKRs are much better. That concept was developed by one of the big American companies in the seventies, and just because it’s that old doesn’t mean it’s not good. I find it far more strategic than smart.
Paul (08:16) So for a goal setting perspective, does it look different for the startups versus the large corporations, the folks that have been in it for a while? If it is different, what makes it different? And what are some of the and I know, just kind of bouncing around, but if it is different, there’s probably some roadblocks that they have. So just kind of talk a little bit about what that goal setting looks like for the different sized companies.
Chris (08:42) You’re probably not expecting this answer, but I find I use exactly the same process, whether it’s a start up with zero revenue and it’s just a concept, or a large corporation, which some are billions of dollars in size, the processes and the measurement are the same because that’s driven by my philosophy always start out as you intended to finish. If I want to be a 30 mil business, I need to act like that even when I’m only 500,000. You get what you think about, you get what you do, and I don’t want to be chopping and changing, you know. Say my CRM, this is not an ad, but we went with Salesforce.com because we used them when we were larger, that’s what we needed to be because it had the sophistication we needed. Did we need it at the start? No. Did we really want to spend that money? No, but we needed it because that’s where we’re ending up. I think the difference is the type of issues you have to fix, like in a startup, my experience with having done quite a few, it’s all about competitive advantage, cash flow, growth and pretty fast growth to get a critical mass speaking. It’s like you’re in a plane and you need to get to 10,000 feet to feel safe, that’s what a start up is doing. Beginning a corporation, and one of the ones I’m the owner and director of, it’s not too huge, but it’s still 800 people, 400 mil. We worry about things like profitability per segment, attracting and returning really good people and leverage. So my view is like if I could spend $100,000 on the person and they stayed 10 years, that’s a million dollars. I’d rather spend it on technology because it works 24-7. I can leverage it better, and I have in some ways less issues with that, and it protects me. I see technology is a protection and leverage device, and so I’m looking for that and I’m known for that. But I don’t automatically just throw people at things, but when you’re in your startup mode, can I afford a million dollars a year for some technology platform? No I can’t so I have to throw people at it. But it is the same planning process, but different topics pop out, depending where you are in the growth framework.
Kim (11:09) Chris, I know you’ve done a lot of research and collected evidence about the processes that businesses used to make innovations successful. What kinds of things do you consider when you’re gathering this evidence? And what should business leaders consider when they’re trying to gather their own evidence about their own companies?
Chris (11:27) Yep, it starts with a problem to solve. In any research problem, it actually starts at you having to define what the objective is and then try and work out a hypothesis to work out how to fix that problem and the problem I struck, a long time ago now, but I found that a lot of my clients were actually failing, and I had no idea what the rate of failure was, but when I did the research as part of my PhD, I found it was 30% which means most people have to have tenacity to be successful because there is a good chance they will fail and every time they reattempt to do it, it’s still only a 30% probability. I did notice that some of my clients seem to be just super men and women and they were far more successful than 30% and I had no idea what it would be and so I dug in and I found that there was three things they needed to be ready. They needed to build capability and their belief systems of their people and themselves as leaders needed to be right and that threw out 10 different factors. So if I was a business leader and I wanted to gather evidence about my own company, I’d make a list of all of the problems I’m having, and I see them as opportunities, by the way, and then I’d work out which is the most important strategically, then I would dig in and try and work out and gather data that way I don’t make assumptions. Data is one of the characteristics of someone that’s done a PhD, they have become very research driven so you don’t believe anything and in some ways you become a bit cynical because I tend not to believe anything without evidence now. So you gather the evidence and then you’ve got to look at that evidence and try and work out what is the hypothesis is and what I think should happen. If I want to grow with 30% and I’m not, what is causing that? What is the model I need? What is best practice? Who are the people that are doing really well in this? What are they doing differently to the average person? That’s the simple research, it is no more difficult than that. It looks really clever and it takes three or four years to do it properly, but it is simple as that. Where’s the problem? We’re the exemplary. What are they doing differently? Can I prove that? And if I can, can I create a model for it?
Kim (13:53) You’re speaking Paul’s language here. He’s loves data.
Paul (13:57) You start taking about data analysis, and for the sports fans out there, if you’ve not seen the movie Money Ball with Brad Pitt that talks about the Oakland A’s back in 2002 and how they used data to find the right players, to put runs on the board and to win games and made it to the postseason for the first time in a while. It’s a great movie about, “What is the problem?” and everybody thinks they have the problem and until you actually talk about it and you say it, people will dance around it, but you’ve got to truly say, “OK, what is the problem?” Whenever we’re talking to a client about an issue, we will always ask, what is what is the problem you’re trying to solve? What’s the end goal? If I know what the report looks like, then I can know how to structure the engagement or if I know what your problem is and truly know what your problem is, not just what think the problem is, it’s the true problem. And so Moneyball has a has a great scene where Brad Pitt talks about you know, what’s the problem? And he keeps asking the question over and over and over. Nobody can come to the answer, and it’s because they don’t truly know what the problem is. They’re just going through motions. So I like that you brought that into this conversation because I think data and data analytics there is no truer true in the world other than data analytics because it knows things that people don’t.
Chris (15:17) Correct.
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Paul (15:28) So Chris, if your business has different locations, whether it’s domestically or internationally, you know what does that mean for how you set your goals across the business?
Chris (15:36) Okay, what I mentioned when I ran the laser company that was international, people spread around the world, I think one that I’m most proud of is the that 800 person company I mentioned that I’m an owner and director of, over an immediate past year and it’s because we’re in 10 locations. And so we started out 70 years ago, 71 years ago as a family decency nitric, and it has been very hard, but we’ve achieved it to keep that family feel. I think it’s the cleaning process in part and objectives of goal setting that has enabled us to do that. Now our year end is June 30, so we’re already meeting on the think the third and fourth, that’s the first Monday and Tuesday of February, to start the planning process for the next financial year coming, and what we end up is a board., we’re away for two days with a facilitator using our processes and we come up with, well, call it a robust master plan. So we’ve got this plan, we’ve got the vision, we’ve got the OKRs, we’ve got it all worked out, and then we flow that so that each of the 10 locations go through the same planning process. I think the key success factor is people like as main board directors we will attend some of those we’ll fly to see the over has been or wherever and we will attend that, and we get gifts from other departments, other divisions of the company to come along and add their input into the planning process. The key is to get the leader buy in first because if the leader of that separate entity doesn’t believe in the plan or feels that it’s being forced on them, then they won’t buy in. You can tell, in particular with old eyes like mine, you can actually see if someone gets it or not. And then once we’ve got the plan, I think the next thing is we need a continuous corrective action process. When we are reporting back on a monthly basis, if they’re drifting on their plan or their overachieving it, we expect that general manager to explain why. If they’re drifting or not meeting their OKRs, then what we want is their plan to correct that. If we see in, say, two or three months, that’s not working, I’ll word this nicely, we will give them extra help. People like me will get involved and I’ll go, “It’s okay, I’ll help you,” and often they prefer not to have my help. Most of them would try and meet their own goals, but if they’re generally missing it, we jump in from above and help them get those in. It may mean even redefining the plan that the pain wasn’t right the first break, but normally to plan his right and then missing some of things I talked about before. Poor succession, poor leverage, unequal capability, wrong clients or customers, they’re the things that we pick up. Often, they’re so close to it that they can’t see it. Even though it takes three or four months to get that plan done, and then it takes the rest of the year to implement it or another year to implement it, I think if you’ve got multiple locations, you can’t just do a plan and send it out, it really needs to have board and senior executive involvement to develop the plan, but also in the implementation process.
Paul (19:07) A common theme we talk about on some of these podcasts is that tone at the top and if you don’t have buy-in from everyone, especially at the top, others aren’t going to jump on board. So I think that a big piece of culture a lot of businesses miss, is they just do not have that understanding, that tone of the top, is important and really trying to weave that into all aspects of the business.
Chris (19:32) I think people are watching their leaders at all times and making judgments and if can’t have confidence and feel safe because we actually know what we’re doing, then it makes them second guess everything and then that’s when the problems start creeping in. So it’s a team effort, we’ll have to be involved, but it starts with the leaders.
Kim (19:59) So that’s a good point, though. You know when you’re trying to balance the desire for the team to buy in and for them to participate and also the need to stay true to your core mission, your vision. In other words, if people are bringing their own ideas and goals to your business, how do you know when you should say, “Yes, let’s do it,” and when to say, “No, that’s not for us.” How do you know how to balance that?
Chris (20:24) it’s simple in my mind. I know a good idea when I see it, and it’s not always coming out of my mouth. It’s not a competition to be the best and the baddest in the room. I’m just looking for good ideas, but I have a rule too, quickly with people I work with on a day to day basis, if I’m in doubt which way to jump, I go with their ideas, so I don’t insist on my own ideas. It’s really got to be 70-30 in my head that on the right thing, maybe not before I’ll say much, but if it’s 50 50 I just say that’s a good idea lets go with it because we can always make another decision later and change it and they learn from that. If I try to protect people and make it too safe and it’s my opinion rules, then they’re going to come to me all the time and I don’t want that. I mean, when I replaced myself as the CEO of Mindshop, which was a long time ago, 21 years ago, the first thing I did was leave the office and not come back. So I go when I’m invited because you can’t have two bosses. That doesn’t mean I can’t throw good ideas in, and I’d probably get asked four five times a day, but the only reason they’re asking if they think my answers to their questions are insightful. So there’s my challenge. How do I stay being able to do that? The bottom line is recognizing a good idea from anywhere in the organization. Don’t think just because you’re a leader that you got the mortgage on best ideas, they can come from anywhere. Often, they’re from the new people saying, “Why in the hell are they doing this?” I mean, and they question things that maybe I’ll stop questioning and I shouldn’t be. I love it. And apprentices, first year in the business, we’ve got 65 at the moment and 30 for our state engineers. They’re the ones I want to talk to because they’re totally fresh ideas and that they have a future of the business.
Paul (22:19) We had a CEO one time that empowered you to do things based on what you felt it needed to be done and his rule of thumb was just don’t cut down the 100-year old oak tree, right? If everybody that comes to us with ideas or, “Hey, here’s how I would handle that,” if you continue to correct them, if you continue to add in your own thoughts, you’re not empowering them to want to do that later and we’re trying to build other leaders and not just be the only one and so that is that is a good rule of thumb of when people come to me with, “Hey, here’s how I would do it,” I would say, “Unless they’re going to cut down the 100-year old oak tree, I’m not correcting anything. I’m just going to let them kind of go with it, because that, to me, is empowering them to continue to do that in the future.” So here on the wrap Chris, we like to wrap it up in 60 seconds or less. What do you want the listeners to take away from this conversation related to setting goals for their business?
Chris (23:12) Okay, for 2020 I think the big issues are your capability of your people. You really need to invest in that and start with yourself. You’re the lowest common denominator in the organization, so make sure that you’re growing first. You’re not having groundhog years. You’re their capability and look for ways to live with yourself and get a competitive advantage, that would be my advice for 2020.
Kim (23:39) This has been great as usual. Chris, I really appreciate you getting up very early in Australia to join us here today. Thank you so much.
Paul (23:48) Thanks, Chris.
Chris 23:49) It was nice talking to you. Have a good day.
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