Business goals ensure that companies don’t just survive but thrive. Goals also increase the persistence of those trying to achieve them, and fuel the sense of achievement of the people working towards them, according to a study in Management Research News.
For department heads, that means goals are an opportunity to motivate and reward your team as your business pushes forward. This is especially true in finance departments, whose work underlays the way that companies run.
But goals are only as good as you make them—and connecting your team to the long-term strategy that finance teams support can be difficult because strategy doesn’t always have an immediate or obvious result for the finance team.
For finance goals to stick, you need to link the strategic goals of your company to the operational goals of your team and the individual goals of your people.
A company goal is team goals combined, and a team goal is individual goals combined
Grow Quarterly Revenue by 2X. This is a great goal for a company to have. It shows intent to grow. It is a statement that everyone in the company can get behind and would want to achieve. Aggressive, but doable.
But that kind of higher-level goal given by a CEO to their executive team is just a statement of intent. It is specific, but not actionable. Doubling quarterly revenue is achieved by the people on your team. To do that, they each need their own specific and actionable goals.
For finance, this starts with the CFO:
In this scenario, the CFO has a clear goal—develop an eighteen-month strategic plan. Though simple on the surface, this is a two-fold challenge for the CFO:
- They are tasked to produce this themselves. They have to gather the information, set the targets, meet the people, and receive the approval. It is a personal goal for them.
- They have to task their department to help achieve this goal. The rest of the finance team has to contribute to developing this plan, and through it, growing revenue.
The CFO’s strategic goal
For the first part, the CFO has to do two things: break this goal down further into discrete goals and start putting hard deadlines on each task and the overall goal. For strategic planning, this might look like:
- Get input from the rest of the C-suite by July 1
- Set lead target with Director of Marketing by July 8
- Set bookings target with VP Sales by July 15
- Set hiring target with People Ops by July 23
- Receive approval on strategic plan by Aug 1
Suddenly a single goal has become five. Though this seems like more work for the CFO, it makes their life easier. The more, small goals they can break their larger goal into, the more achievable it becomes. The more hard dates they put to the work, the more they can see the progress. You run a marathon one stride at a time, knowing you are getting closer to the finish line with every one.
Individual goals in the Finance team
John Doerr, general partner at Kleiner Perkins and author of Measure What Matters, calls this framework for hitting goals “as measured by.” The CFO can set out their objectives and key results (OKRs): “I will develop an eighteen-month strategic plan by September 1 as measured by getting input from the rest of the C-suite by July 1,” or “I will develop an eighteen-month strategic plan by September 1 as measured by setting lead target with Director of Marketing by July 8,” and so on. If they hit all their small goals, they have succeeded.
For the CFO, there is another measure of success—whether their team hits their individual goals as well. In the example above, different team members have different goals:
- Controller: Speed up monthly end closing process by 2X
- VP Finance: Close series C-round
- Accounting Team: Have all accounts payable paid five days before EOM
- Finance Manager: Create new pricing structure by end of quarter
As with the CFO, the way to tackle each of these goals is to discretize them. For instance, if the accounting team wants to get accounts payable paid quicker, they have to break that down and set goals to shift every step of the process five days earlier:
- Collect invoices by 10th of month
- Receive approval from departments by 15th of month
- Receive Controller approval by 20th of month
When individual goals, whether for the CFO or the accounting team are pulled apart into smaller steps, something else also becomes obvious—they aren’t really that individual at all. The CFO is talking to other department heads. She needs to be thinking about their own strategic plans for helping to hit the company goal. Does the bookings target that she has in mind mesh with what the VP of Sales is thinking? What hiring plans do all the other departments have?
The same is true for the accounting team—can they expect to get the approvals from each department and the controller when needed? Or do they need to reassess how they will help the business goal and what they are measured by?
Helping your team and individuals hit their goals
Setting high-level goals and breaking them down into manageable chunks works. But it isn’t enough. You and your team have to follow through. At every stage, you need to think not just of the business objectives, but of what your team can achieve and how to keep them on track.
Choose achievable goals
There are a lot of factors to take into account when you consider what an achievable goal is. There’s a reason why we have models and frameworks and acronyms to help us choose and follow through on how to reach benchmarks in business. This is no different for finance teams.
To set an effective goal as a finance department, you need to first consider the long-term trajectory of the business. The majority of your long-term goals will be dictated by where the business is going and what support, policy, and process it needs to get there. Scale Venture Partners recommends framing long-term goals like so:
What—from a business perspective, not a purely financial perspective—is the company trying to achieve? The financial plan should map to these goals and should be judged in that context.
Communicate your goals
Communicating your goals to everyone is the first step to success. Managers need to make clear the end goal, the steps it will take to get there, and the way success will be measured on that goal. For finance teams, this means thinking about the numbers. Budgeting, changes in key metrics, and revenue projections need to be forecasted for as far in the future as you can maintain accuracy. This sets expectations and provides a groundwork for tracking effectiveness.
Any shift in work responsibilities or new processes should be explained. If your team is walking away from a meeting about goals for their department and they can’t articulate what is getting done, when, and why, the goal is doomed.
For finance team goals, managers may also have to reach out to other departments to make things happen. If you’re streamlining expenses, people who spend need to be involved and receptive. If you’re implementing finance automation, you need to talk to IT. If you are trying to shift spending priority, you need to go over budgets for hiring with each department.
Track your goals
To ensure your team is on track, you need to have regular check-ins for projects and processes. This can happen in a variety of ways:
- 1:1 meetings are good for keeping employees focused and giving them the tools they need to succeed. They can also help an employee think about their own career development through their current business goals, which builds ownership and enthusiasm.
- Presentations help keep your team informed of progress across different projects. They help people remain accountable for their own progress, because individuals or groups are required to state what they have done.
- Reports force your team to look at exactly how much has been accomplished and what their roadblocks were. They can also keep your team connected to progress on long-term goals that would otherwise feel intangible.
In finance teams, everyone has ownership over a high-stakes part of the business. You should empower your employees to track their own progress and report how things are going, whether in a 1:1 or an all-team standup. This gives them room to breathe while maintaining a high standard of accountability for their work.
Set yourself up to succeed
Whether you’re in the midst of overhauling a huge strategic plan for your company or need to knock out a dozen small tasks that keep getting pushed aside, being judicious and pragmatic with goal setting will be your ingredients for success. Finance teams want to feel connected to their work and how their work supports the running of your company. They’re filled with sharp people who want to take ownership and be challenged—so give them goals that let them do just that.