Why many family-owned businesses falter after setting goals

goalsMr. Anil Gupta has been a business owner for over 20 years. Like most business owners, he has lived each day dreaming of making it big.

An year back, he attended a popular programme on ‘Management by Goals’ (MBO) and ended up creating a Vision, strategy sheet and ambitious goals for his organization. Mr Gupta quickly found out that when he presented his company’s goals & targets to employees, they all listened attentively. But, the targets & goals were soon forgotten in day-to-day grind and fire-fights. Like many of his programme co-attendees, he found the inertia of day-to-day activities too strong to escape from.

When I met Mr. Gupta a few weeks back, I could sense that he had lost faith that his company could adopt ‘Management by Goals’ philosophy. While he was telling me his experience, I could see the strategy sheet behind his chair – a bit faded, gathering dust and showing a six month old update date.

Mr. Gupta is not alone. Several family-owned businesses like Mr Gupta’s, many have tried Goal setting, MBO or other Performance Management methodologies and given up. Having seen the struggles with achieving goals across many businesses, I am able to list 3 common mistakes.

1. Setting ‘extra’ ambitious goals

The common feeling amongst many business owners is that goals should always be ambitious and employees need to make extra efforts.

Nothing wrong in this thought, but setting extra ambitious goals in the first few cycles overwhelm most employees especially those who are not aware of Performance Management methodologies. These employees give up on the goals as soon as they get the first excuse to do so.

2. Setting too many goals & setting them across unrelated areas

This is best summarized by the quote – “Try to do everything and you end up doing nothing.”

The whole purpose of goals is to bring an element of focus in the work. Setting too many goals dilutes this purpose. My experience shows that 3 goals per entity (person, department etc.) works best.

To obtain further clarity in goal areas, I advise our clients to divide goals in 3 categories: Business goals, Departmental goals and Project goals. Business goals should improve company’s top line, Departmental goals should tackle internal departmental inefficiencies and Project goals should address specific bottlenecks in the company.

3. Not Creating a realistic Action Plan

This is by-far the most common mistake.

Unless goals are backed by a well-defined plan, the employees don’t own their goals or remain unsure of their ability to hit the goals. I have observed a strong correlation between existence of a defined plan and the success in hitting goals.

It is therefore not surprising that the businesses who have internalized goal-driven culture have their owners/managers regularly spend time to help other employees create realistic action plans and then follow up on progress.

It is worth mentioning here that setting goals using the SMART technique makes creating action plans & follow-up schedules much easier (SMART goals are Specific, Measurable, Achievable, Reviewable & Time bound)

Now that I have told you the common mistakes, it’s time for me to tell you about the main ingredient to consistently achieve set goals. It’s the person’s outlook – the outlook to treat achieving goals like a good habit.

It has been proven that you have a better chance of acquiring a habit, by starting small & then ensuring consistent efforts until the habit is ingrained. Adopting a goal driven culture in your organization is a just like that. You have a better chance of success by starting with a few goals, giving people time to adapt to the process and then gradually spreading it to all areas and activities of the organization.

So, in conclusion, starting small and keeping goals simple & few for the first couple of times is the key to not faltering. Once your employees are acclimatized to the process and have tasted the high of achieving their goals, your business is truly ready for setting and achieving ambitious goals.

What has been your experience with introducing goal-oriented culture in your organization? What practices have contributed to the success? I am interested in hearing your opinion. Please write to me using this link.

My next article: Setting goals for companies whose business model is evolving or changing fast. Stay tuned.


Note 1:

The article, ‘Why many family-owned businesses falter after setting goals’, is written based on my professional experience at Pinnacle and other companies.

Pinnacle specializes in working with the management of family-owned companies to craft & implement People Management Strategies to accomplish their business vision & goals.


  • Very aptly articulated issue of most family run enterprises / SMEs.

    In my view & experience, the goals are never “owned” by the individuals therefore, they are seldom realized.
    The key to success will definitely be achieved when the goals are set by the employees themselves as there will be a far greater ownership of these targets/goals.

    I have experienced this in different organizations, situations and across challenges, not necessarily sales.

    Thanks for your informative knowledge articles.

    Deepak Prahlad AgarwalMay 7, 2014
  • The article is very nicely written.

    Prasanna RisbudMay 7, 2014

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