When you talk about next year’s goals with your team, there is a WRONG way to describe them. It goes something like this . . .

“Our goal is simple. We are going to grow revenue by 40%.”

Meeting adjourned.

Revenue is the RESULT of hitting your goals. Revenue is not the goal.

Goals are your roadmap. They not only guide you toward success but also help you decide what not to focus on. And that is where creativity and strategic direction emerge.

You know what doesn’t provide direction? Revenue goals.

Yes, we all want to grow revenue and profits, build competitive advantages, and outpace the competition. But revenue targets alone don’t tell the full story. When I work with leadership teams on their annual plans, the financial model is a critical tool that we use to manage the business—but it’s a result of the activities we plan, not the sole objective.

So what do you need to agree on to understand the goals?

1. What is good versus bad (or less good) revenue? Customers that gain a lot of value from your products, that are likely to increase their usage, and will need you for a long time are great. Non-recurring revenue deals with poor margins are less worth it. Would you sell t-shirts just to generate revenue?
2. What does your business look like at the end of 2025 that sets you up for a successful 3 years starting in 2026? What are your customer counts, account sizes, and product usage metrics? Based on where you are at the end of 2025, are you even more likely to grow and be a success over the next 3 years?
3. Where and when do you have to spend money to achieve your goals? Can you invest slowly based on hitting certain milestones so you are confident the investment works? Who do you hire, and when?
4. What happens when you fall short of your goals? Or when you exceed them? Do you have layoffs? Do you spend more? Do you pivot? Do you raise money?
5. Where do you have to invest in your org to support the goals? RevOps? Finance? Office space and travel? Managers?
   

One particularly skeptical CEO I worked for was convinced that financial goals would solve everything. So we walked through a few “what if” scenarios:

– What if you land a handful of massive customers, but your overall customer count declines? Your cost of acquisition may be increasing along with your churn risk.

– What if many of your customers are deeply dissatisfied? Retention will suffer.

– What if product usage drops? Your expansion opportunity and ability to negotiate higher prices is likely nil.

– What if discounting is your primary growth driver? You are competing on price. Without competitive advantages, profits will be limited and your valuation will suffer.

In each of these cases, we would have hit our revenue target, but our business would have been in trouble.

So we built a proper annual plan, set quarterly goals, and built our dashboards for our teams to review.

Problem solved.

Next time you’re discussing goals with your team, ask yourself: Are you focused on the activities that will lead to success, or are you just watching the scoreboard?