Personal Goals Are Like Ice Cream

We call lots of things goals.  We have financial goals, educational goals, weight loss goals, milestones, goals for work, stretch goals, tasks, and goals for life; the list goes on and on. But are these all goals?

What is a goal?

If goals are creative thoughts about what we want, how are they like ice cream? Let me explain using SpaceX as an example.

In 2012, Elon Musk started talking about establishing a human colony on Mars. In the last eight-years, one of the projects his company, SpaceX has been working on, is building the world’s biggest rocket to help make that dream come true.

The rocket, called Starship, will be 30 feet in diameter, stand 390 feet tall.  It will be able to transport the equivalent payload of a fully-loaded Boing 777 passenger jet into orbit. SpaceX has tested different materials for the hull, started building a launch complex in Texas, and experimented with welding stainless steel.  And just last week (as of this writing) successfully completed its first 150-meter hop. Each of these steps is a type of goal.

Organizing Goals

To organize goals, it’s helpful to put them into categories using terms like vision, milestones, and tasks. A Vision is a goal, a Milestone is a goal, and so are individual tasks. So, goals are like ice cream because they come in different flavors. To help illustrate this, let’s use a delicious ice cream sundae.

Why Goals Are Important

 For example:  The vision scoop on top gives you direction, helps you plan, and motivates you to apply consistent effort. In other words, to have grit. You will need grit because those visions are often years into the future. Cultivating a vivid vision improves the likelihood of success. And creating a vision also causes you to start thinking about what’s needed to achieve it. This helps you identify milestones and tasks.

The milestone layer not only supports your vision, it helps clarify it. As you think about the milestones needed to reach your vision and switch your thoughts back and forth between vision and the milestones, you will begin to see gaps, redundancies, and have new insights. This creative loop adds clarity to your vision and helps you build your path forward.

Finally, there are the numerous, every-day, vanilla tasks. Not only do they play a critical role in achieving your milestones, but they also enable your vision to come true. This time, the back and forth pattern is most prominent between tasks and milestones. This is very helpful in deciding what tasks to spend our precious time on each day. Using goals, leveraging their natural order and interactions helps time from just slipping away.

Once you know the structure of goals, and their back and forth relationship, you can use that knowledge to improve and smooth your path to success.

Pursuing your vision, milestones, and tasks make life fun and rewarding. Its a lot easier to work on boring, everyday tasks when you know how they fit into the big picture. Completing tasks and reaching milestones sets up a cycle of progress that adds variety and anticipation to life. It’s fun and rewarding to accomplish even little tasks when you see how they are powering your progress.

Goals example

An area that concerns many people is their financial security. Below are the results of a short, five-minute brainstorming session on the topic.

Let’s pull a few ideas from our brainstorming to start creating a vision. Ideas like: “Live a middle-class life, whether financial challenges and enjoy retirement.” With our vision in place, let’s look for a milestone to work on.

Dave Ramsey is well known for helping millions of people achieve financial security. According to Dave, creating an emergency fund is a critical first step. And the reason is simple. The number one reason people stop working toward financial security is due to a major unforeseen expenses. Without an emergency fund, when faced with a big car repair or surprise medical bill, people are forced to use a credit card, and that just spirals them deeper into debt.

Having a $1,000 emergency fund is a very important milestone on the way to financial security. But how do you find an extra $1,000 when you have a lot of debt? That is where tasks come in.

Here are some tasks that relate to our new milestone of having a $1,000 emergency fund:

Setting up a Goal goals boosts your creativity and opens the door to new solutions. Setting up a Goal Pyramid, is like creating your own game.  As you organize your goals and allow your imagination to move back and forth between vision, milestones and tasks you will discover new insights and opportunities.

As the game progresses, your vision becomes clearer, and your path more defined. Over time, as you complete tasks and achieve milestones, you will move closer and closer to your vision, until it finally comes true.

What Are Principles?

The world is a network of cycles and patterns.  Things like, the time between meals, the passing of the seasons or the ups and downs of economies.  For example, one principle, based on thousands of generations of experience, is that the sun rises in the east and sets in the west. 

Principles are like formulas that predict how things behave.  But here is the fun part.  You can also use principles to assist you in solving seemingly unrelated problems.    

Say you were in a rowboat, adrift on the ocean.  The lone survivor after your ship went down.  You had food and water, but no compass, radio or cellphone.   Without a reference point, you would probably just row in circles till your food and water ran out.  But knowing just two additional things can help you out.  One was that ancient principle about the sun rising in the east and setting in the west.  The other is you know the port you sailed from was in the east.  Knowing the sun follows the same pattern every day, you decide to row into the sun in the morning, then in the afternoon, row away from the sun.  Following this simple procedure will eventually lead you to safety.

For almost every cycle or pattern, there is a principle that can help you get where you want to go.

Examples of Principles

Agile

In 2001, a group of seventeen software developers published the Manifesto for Agile Software Development (1).  That manifesto includes the developer’s principles for creating software.  Their principles are:

In the early years of Microsoft Windows, a new version was released every year or two.  All too often, these upgrades resulted in crashed computers, lost data and frustrated customers.  The programing steps to create these early versions were mapped out in great sequential detail that spanned months or years.  Unfortunately, things like hardware improvements, programing bugs, or changing customer needs, could upset the entire timeline and cause additional programing that delayed the software release for months.  Sometime around 2014, Microsoft started adopting an Agile approach.  Today, Microsoft updates the Windows 10 application or security modules every few weeks.  This frequent delivery of usable software is a core part of Agile’s principles.

Financial success

Ray Dalio, ranked as the top hedge fund manager of all time, has built his fortunes by creating and using principles.  Ray didn’t start at the top, he built his way there by studying his successes and mistakes, finding the root causes and devising principles to help him make better decisions in the future.  As a sample, here’s Ray’s principle for getting what you want out of life (2):

Use the 5-Step Process to Get What You Want Out of Life

This is just one set of principles that Ray uses.  He has many others that contribute to his success.  Principles covering things like:

So far, we’ve looked at how principles help castaways, software developers and an investor.  Here’s one last example of principles at work. 

Design Principles

Have you ever noticed how Apple’s logo has evolved over time? (3)  It’s a great example of design principles at work.  Whether designing a logo, an advertisement for a product, or a poster for an event, designers use design principles to make their work engaging and memorable.  Some common principles of design are:   

Combining design principles with elements like color, line, shape and space, help Designers craft images that cause us to pause and take in their message.  Whether an ancient cave painting of bison, or a poster for the latest blockbuster movie, the principles of good design repeat themselves over and again.  And situations that repeat themselves are the perfect place to utilize principles.

How to create your own principles

How will you use principles?

Everyone's needs are different.  Would you like to use your principles to help you personal life, work life or both.  This question is key.  You might have noticed in Ray Dailo's example, he created principles that covered both his work and personal life.  Over time, as I focused on understanding my principles they evolved that way too.  I find there is so much overlap between my personal life and work, that to be the person I want to be, it's advantageous to merge them.

Research and gather ideas

Next, do an internet search on related topics like: “religious principles”, “business principles”, “scientific principles”, “writing principles” “_____________ principles”.  Just about any topic will result in many, many ideas.  You can print these off and use them as idea starters in the next step, brainstorming.

Brainstorm

This process gives you the freedom to generate a lot of ideas.  To start the process: locate a pen, some sticky notes and a quiet room with a blank wall.  It can also be helpful to ask a few people you trust to join your brainstorming session.  They can build enthusiasm, offer different points of view and prevent self-editing.  Make sure everyone understands that in the brainstorming session, there are no bad ideas.  The goal is to jot down as many ideas on sticky notes as possible in the time you allow.  As far as time goes, I suggest no more than thirty to forty minutes. 

Group

After a short break of ten minutes or so, return to the wall and organize the stickies into groups.  As you start to organize the stickies, you will notice themes or groups developing.  Don’t worry about being absolutely correct or overthink this step.  The purpose of using stickies is to allow you to easily move things around.  If you see new patterns of themes developing later on, it’s easy to adjust.

Shine

The next step is to review your principle and make it shine.  Look over each of your groups and write its essence down on a new sticky note.  It’s important to write several versions, each on a separate sticky note.  Try rearranging the words or testing the sentence with your experience.  You may want to let these ideas marinate for a day or two and then revisit them with fresh eyes.  When you're done, it will feel right and sound right too.

Display

 Defining your principles before you need them and having them close at hand, provides you with a valuable tool to save time, avoid known problems, and improve your results.  

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Business Action Plan for the Coronavirus

Released 4-4-2020

Revised 4-5-2020

July 1981

​July 1990

​March 2001

December 2007

March 2020

What do these dates have in common?  They mark the moments in history when recessions began, ushering in economic turmoil.    Having worked with many outstanding business leaders through those exciting times, I want to share with you, some lessons learned.

Charting a Way Forward

I like to think of myself as a rational person, but I’m not one. The good news is it’s

Economic downturns, whether caused by an embargo, the unintended consequences of financial policy, or a rogue virus, can trigger a great deal of pain and uncertainty.  What about our employees, customers and suppliers?  What will the world look like tomorrow?  What’s the path forward?

As a businessperson, you know the Coronavirus isn’t your fault, but as a leader, it’s your responsibility to look ahead and chart the next part of your company’s voyage.

Here in Michigan we are experiencing an unprecedented 3-week shelter in place order.  Many businesses have completely closed and face a future full of unknowns.  Many businesses are battened down like ships in port, waiting for a storm to pass.

Another option is for business leaders to use this time to chart their way forward.  But how?

Strengthen Your Leadership Mindset

It’s tempting to charge off into headlong action.  Fight, flight or freeze responses, are in part responsible for our success as humans.  Leaders often feel pressured to “have the answers” and to act immediately.  But this financial crisis isn’t a Lion, Tiger, or Bear.  So, I encourage you to take a little time and mentally prepare for what’s to come.

Be Agile

When faced with difficult choices, it’s easy to get bogged down in research, deliberation, planning and delegation.  This is how software was created in the past, and a big part of why it was so costly and time-consuming to produce.  But today, most software companies use an Agile approach.

Agile is a team approach where people play specific roles.  The Product Owner for example, insures there is a clear vision and strategy.  They also break the vision down into useful outcomes and prioritize what they want.  The team then works on the list, producing a series of useful outcomes in a short amount of time.

There are other things that are important in Agile.  Things like transparency, communications and building a culture where people realize that setbacks and dead ends are opportunities to learn and discover.  The advantages are you have momentum, you have something that works, and you are little smarter.

Developing an Agile mindset can drastically speed progress.  It’s an organized approach to many of the activities you do today.  But by adding clarity, feedback and teamwork, you go farther, faster. 

Dealing with the Unknown

Will closures end in a few more weeks, or will this go on till June as some suggest?

Will funds be available to help us resume operations?

Will our employees come back?

What about our customers?

Could there really be over one million illnesses, and two hundred thousand deaths?  Such a scale would touch every family.

With so much grim news, it’s hard to imagine better times.  Fortunately, there are steps you can take to gain a more realistic perspective.

Confirmation Bias

Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms or strengthens one's prior personal beliefs or hypotheses.  [2]

It’s easy to dismiss the opinions of those we don’t agree with and view them unfavorably.  Their points of view might make others uncomfortable or they might seem to be troublemakers.  In my consulting work I pay special attention to these folks.  They may not be exactly right, but they often are onto something that can have a significant impact.  What I’m saying here is don’t surround yourself with “Yes people”.  Encourage people to speak openly and profit from their unique perspectives.

Confirmation bias also causes blind spots to information and facts that run counter to our personal models of the world.  Better options are to seek clarification.  Ask probing questions, seek to understand, dig for the roots of a problem, look for facts and truth.

Be Goal Focused, Not Task Focused

The best CEO’s I’ve worked with had the gift of being clear about their vision and goals.  In addition, they held their team accountable for bring those goals into reality.  They weren’t completely hands-off, they wanted to see the plans; sometimes adding insights, sometimes guidance.  They also regularly checked in to gauge progress and they gauged that progress against their goals.

So, I encourage you to clearly communicate your vision, goals and timelines.  Let your team work out the details and coach them along.  The vast majority of people want to do great work, they just need frameworks that allow them to thrive.  And with a clear vision, goals and a timeline, they will have a way of knowing how they are doing, even without your asking.

Leaders who get bogged down in too many tasks, often become frustrated.  One of my mentors once told me he managed by MBWA (managing by wandering around).  What he meant was, that he communicated his goals, and let the people who worked for him take on many of them.  This freed up his time so he could check in with them.

He would drop in for a morning visit, see how they were doing, answer questions, and provide guidance.  This seemingly casual style, meant he was always up to date and involved, without being overbearing.  And the performance of his people and the company’s performance, proved it’s worth.         

Probabilities in a Changing World

It’s important to keep in mind in times of rapid change, that you are working with probabilities.  It’s nearly impossible to be 100% on.  Then again, we’re striving for much higher accuracy than a 50/50 coin toss.  Some decisions will be off the mark.  Suppliers will be late.  Interruptions will happen.  Or to paraphrase Moltke, “no plan survives contact with the enemy”.

The techniques that follow will create a clearer picture but are not perfect.  The results will still require your judgment.  Be open to learning rapidly, adjusting, and improving over time.  

In the articles above, both Morgan Stanley and J.P. Morgan forecast a recovery starting in the July – September time frame, lasting 6-9 months.

It will be interesting to see how accurate these projections are, because so many unknowns are at work.  Items like the duration of the outbreak, global monetary policy, stimulus packages, bank lending, and spending are examples.     

Projecting the future

When business is good, we typically review the financials once a month.  The P&L looks good, check.  Cash flow is positive, check.  Sales are a little off forecast, but not bad.  Set a reminder to talk to the Sales Manager, and file everything away.

But with a little fine tuning, these tools can be indispensable for decision-making during a crisis.  It will help you run different financial scenarios, track your progress, and evaluate your decisions.

Cash flow Spreadsheet

Using your 2020 budget, or last year’s final P&L, you can create a cash flow forecast that reflects your original plan.  It’s formatted like your P&L, but each month is shown separately, allowing you to see the entire year on one page.  This forecast will serve as our baseline, let’s call it the Pre-Coronavirus Forecast.

There are no problems with cash flow throughout the year, and profits are reasonable.

By creating a copy of the Pre-Coronavirus spreadsheet, a second version can be used to test different scenarios that reflect your estimate of the depth and length of the recession.

In this version, revenues for April are reduced by 25%, and by 19% for May – September.  Because experts are predicting a short recession, revenues were forecasted down 12% in October, 8% in November, and 5% for December.

The impact of reduced sales on cash flow and profits are shown in red.  Without quickly reducing expenses, and/or increasing revenue, cash will run out in May 2020.  A cash flow spreadsheet also helps you identify large cost saving opportunities like purchases, wages, marketing & promotion, interest, loans, and capital equipment.

In just an hour or two, you can create your own cash flow forecast.  It will be a valuable tool in guiding upcoming decisions. 

Of course, this is just one of many potential models.  Your sales could actually go up, depending on your creativity and market opportunities.

There are many other shifting variables including things like:

• Your market.
• Your actual line of credit.
• Government sponsored loans.
• How the economy responds in the next few months.
• Customer orders.
• Supply lines.

That’s why it’s helpful to create copies of the spreadsheet, test different scenarios, and find a model that you’re comfortable with. 

Action Checklist

Below is a list of activities that helped create successful outcomes during past recessions. 

Many, you may have already taken, while others are the result of “lessons learned”.  For example, learning what customers are thinking and talking about.  Your Accounts Receivable department has a relationship with your customer’s Accounts Payable department.  This relationship can provide useful information about your market’s ecosystem and assist you in making decisions.

Here is the list:

Do you see a cash flow spreadsheet helping your company during this crisis?

Was the action checklist helpful?

Please let me know by leaving a comment below.