
Defining a good goal is hard enough in itself, but people still fail even with well thought out SMART goals. Why? The answer is simple: they fail to turn these goals into actions. Generally, a goal is broad and hard to identify practical ways to achieve it. To transform your goals into practical actions is to keep asking the question “How”, until we have atomic and manageable objectives with a set of actions that can directly and effectively impact the outcome.

Photo by Kyle Stauffer via Flickr
Let’s take a theoretical media business that thrive on advertisement and paid subscription revenue. The business has the following high-level goals:
As you can see it’s a little hard to think of something practical we can do to impact these high-level goals. And if we fail to break it down into smaller chunks, we may end up doing unproductive activities like obsessively going over the data looking for trends, having meetings about why the revenue is flat, etc.
Let’s take a look at just the first goal and ask how can we increase revenue?. Our next set of sub-goals may look something like this.
As you can see, each sub-goal is more palpable than the original goal. However, we can still continue ask “How” and make it even more real. Let’s take a look at the first sub-goal, and ask how can we increase the circulation size?
I think you can see where I am going with this. Notice that each time we ask the question “How”, we make the goal more actionable, and the actions to accomplish it more defined and productive. In essence, we are building an upside down tree as illustrated below.

How can this business concept be applied to personal finance? Well, let’s take a look at a common goal:
How are we going to secure a comfortable retirement? By definition, retirement means we have enough income to cover our living expenses so we don’t have to work, therefore:
Take it a step further…
There you have it, the basic principal of turning high-level goals into productive actions.
Originally published Nov 26, 2007 & edited and republished May 1, 2009.
This article was featured in the 1st Carnival of Financial Goals – 2008 Resolutions Edition hosted by Cash Money Life.

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Pinyo, this is a very good example of how to turn a large scale goal into manageable tasks. Great article.
I’m with Patrick on this. Plus, I’ve been thinking of making my 2008 meta-financial goal about my blogging (and entering it in Patrick’s contest, of course!). This will be a handy brainstorming tool!
@Patrick – thank you!
@Mrs. Micah – Good luck with the contest. I’ll be submitting one too. Who can turn down a chance at winning an iPod.
I hear ya! The key is just to keep writing regularly and good things will happen. Time is our ally!
-R
Perfect Timing Pinyo! I’m reviewing my 2007 goals and trying to start on getting my 2008 goals up. I’ll include the smart system on my 2008 goals.
@Laura – excellent. And don’t forget to submit your post to Cash Money Life for a chance to win an iPod.
Great post!
We call it a “fish bone” diagram and though I have used this in my work life, I have never used it in my personal life.
There you go. Another great positive effect from reading blogs. And yours is just great.
Thanks
@Fathersez – welcome to Moolanomy and thank you. Yeah, there are so many names for these great tools — e.g., 5 whys, cause and effect, etc. And thank you for the kind words about my blog. I subscribed to your and will be keeping an eye on it.
Turning goals into actions is always difficult that’s why I really rate SMART objectives because done properly they virtually write your actions for you. Whilst they may seem time consuming and just a waste of effort, they really can help you to transform the way in which you translate words into actions and also give you a sense of acheivement to look back on. By the way any chance of an up date about how things are going in relation to your blog goals for this year, in terms of visitor traffic, ad space selling etc? Keep up all the hardwork my friend you truly have one of the best PF blogs on the net and I think a lot of people look to you for inspiration
I think this is very smart. If you can’t measure it, you can’t manage it.
Or as Yogi Berra said, you can observe a lot just by watching.
I used to hate budgets. But since I also hated spending money I didn’t have, I set a small goal of just trying to rein in “regular” expenses. Easy right? I dumped my credit cards except for one for EMERGENCIES. Cash or debit card only now.
I looked carefully at “regular” expenses and decided to dump my AT&T phone for a prepaid phone. Got a Tracfone for 30 bucks but it was kinda-sorta free since it came with 30 bucks worth of air time.
Now I budget my phone use by buying the amount of time I want, up front. I also got a double minutes card which makes it an even better value.
There are some expenses that can be “managed” and those are the ones to budget.
Saving money and cutting expenses is the goal. It may seem difficult at times. But you have to start somewhere!
Cheap Chick – Thank you for sharing a real life example. Always good to hear success stories.