Achieving Success By Turning Goals Into Actions

By Pinyo, on May 1, 2009

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

An Illustration of Turning Goals Into Actions

Let’s take a theoretical media business that thrive on advertisement and paid subscription revenue. The business has the following high-level goals:

• Increase revenue
• Reduce cost

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.

• Increase circulation size (i.e., number of subscribers, number of copies sold, etc.)
• Increase number of advertisers
• Increase revenue per advertiser
• Increase revenue per subscriber, or per copy cold
• Increase revenue per publication

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?

• Increase marketing and advertisement spending — e.g., to build brand recognition and demand
• Lower subscription cost — e.g., to increase value and make the purchase more attractive
• Lower cost per copy
• Broaden the scope within the niche — e.g., turning a magazine about iPods into one that’s about MP3 players
• Improve distribution channels — e.g., sign up new retailers to carry the magazine, expand into neighboring regions, etc.
• Expand into other media — e.g., expand from hard-copy publication to web-based publication

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.

Applying the Principal to Personal Finance

How can this business concept be applied to personal finance? Well, let’s take a look at a common goal:

• Securing a comfortable retirement

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:

• Build alternative income streams
• Increase income from each stream
• Reduce living expense

Take it a step further…

• Build alternative income streams
  • Invest money in the stock market
  • Invest in side businesses
  • Pension
  • Social Security
  • Other
• Increase income from each stream
  • Learn how to invest, choose the right investment for your risk tolerance level, etc.
  • Take different actions to improve your business profitable revenue
  • Call your ex-employers to collect pension
  • Wait longer to collect Social Security. Social Security pay increases if you wait longer before you collect, but this also leave you with fewer years to collect.
• Reduce living expense
  • Eliminate debt — this also eliminate all the interest payments
  • Frugal living
  • Lower cost alternative to products and services that you need

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 is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

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