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.