Goal-Setting Theory

In the late 1960's, Edwin Locke proposed that intentions to work toward a goal are a major source of work motivation. That is, goals tell us what needs to be done and how much effort will need to be expended. Specific goals can increase our performance and focus. It has been found that difficult goals increase performance as opposed to easy goals; and that feedback leads to higher performance than does nonfeedback. Therefore, it is good for business owners to have someone that can objectively view their business model and their performance over a period of time and provide encouragement and correction when necessary. But first, they must understand the goal and the dynamics that surround the decision to pursue the goal. Setting goals for the sake of setting them will lead to stagnation in life and business.Goal setting with tactical steps that move toward the goal is good strategy.

For example, when a business owner says we "need to sell 500 unites of this product in order to breakeven at the end of the month" a specific goal has been stated, with a timetable, with desired results. From that point, he begins to communicate the goal to the responsible business unit. The goal must be communicated and understood by all involved. Organizing, and planning take place within leadership and execution set into motion by those responsible. Weekly feedback is given to those executing the daily task and the desired goal is being pursued.

When the company has a specific goal to acomplish motivation to work can be increased tremendously.

So, here are 7 Steps to setting goals for your business:

1. Understand the purpose for setting the goal
2. Be specific
3. Understand the who or what needs to happen to achieve the goal
4. How much effort is required, am I (or we) capable
5. Who is going to provide the feedback necessary
6. What type of timeframe is needed, is it reasonable
7. Can others benefit from the accomplishment of this goal

These are but a few. If you would like to add to these steps please do. I would love to hear from you.