What are long-term goals for business?
Long-term goals for business are the high-level goals of your strategy that you aim to achieve in the next 3-5 years or even longer. They are the objectives that, once reached, bring you closer to your vision.
They are the milestones for your vision.
They tend to be resilient to environmental changes like technological, political and others. Long-term goals determine the direction of your company and solidify your strategy regarding your position in the market and the industry. In other words, they outline the high-level objectives you choose to accomplish to bring your vision to life.
Why it’s important to set long-term goals
They provide clarity.
A business with weak or non-existent long-term goals is like a leaf in the wind.
It moves in no particular direction and is subject to every and any change in the environment. It jumps from trend to trend without understanding what causes them, trying to get as much benefit out of them as possible. Sometimes it succeeds, others not so much. As a result, its performance is a roller coaster and its future unpredictable and uncertain. These kinds of businesses move fast towards nowhere.
A business with no long-term goals is in reactive mode.
On the other hand, organizations with long-term goals deriving from their vision have a more steady course. They have clarity on what they wish to become in the next 3-5 years, which guides their decisions. It’s easier for them to spot meaningful trends and take advantage of them in the short term to succeed in the longer term.
Clarity in the organization’s future state, when combined with a concise view of its current state, is a powerful tool. It enables an accurate gap analysis and the grounding of the strategy in reality.
A business with solid and aligned long-term goals is in proactive mode.
How short-term and long-term goals differ
Long-term goals differ from short-term goals in four key traits:
- Short-term goals are malleable.
- Short-term goals are specific.
- Short-term goals are measurable.
- Short-term goals are sacrificable.
Short-term goals change often. As they should. They correlate to the tactics you choose to pursue your strategic objectives. And your tactics change when the environmental circumstances change, e.g., your competitors launched a new product, a global pandemic came out of nowhere, your country leaves a state union, or a new tech disrupts your industry. All of these changes force you to adapt your short-term expectations and tactics. Your long-term goals are more resilient to these changes.
Short-term goals love specificity. This is goal setting 101. Remove ambiguity and make sure that everybody interprets the goals the same way. Make your language simple and your description longer if you have to. Clarity in goals informs decisions. Of course, long-term goals should be clear, as well, but they don’t have to be so specific.
Short-term goals have numbers in them. They are not metrics or KPIs because they’re lagging indicators of your progress. But they are indicators nonetheless. They inform you whether you and your people did a good job to achieve them. Long-term goals don’t need numbers if they don’t make sense. For example, “Dominate our category” could be accompanied by a number like “Own 70% of the market”, but that doesn’t exactly sum up what “dominating a category” really is.
Short-term goals are sacrificed for the company’s greater good. We’re past the time where quarterly numbers are the holy grail of strategy. Leadership with a clear vision recognizes that sometimes you have to make short-term sacrifices to achieve long-term success. It’s how you build sustainable and stable growth. The reverse is what creates soaring short-term results but destroys the culture and leads to ethical fading.
How long are short-term and long-term goals
The scale is relative.
A colossus like Amazon can’t really keep up and survive with a strategy shorter than 3 years. The bigger the organization (and its market cap), the longer the span of its long-term goals. Planning for so long ahead allows the company to manage its resources efficiently and direct its effort towards the most promising big move.
In his book “Invent & Wander: The Collected Writings of Jeff Bezos,” Jeff Bezos says that each quarter is baked three years earlier. Not three months. Not three quarters. Three years. Which means that the numbers of the latest quarter indicate the quality of the company’s 3- year-old strategy. And it makes sense. It’s impossible to coordinate over a million employees if you change the company's direction with every small trend you spot.
Of course, that doesn’t mean the strategy doesn’t adapt to environmental changes.
Complacency is the enterprise killer. Large organizations might be more resilient to threats, but they can become irrelevant very fast, remember Blockbuster and Kodak. However, with size comes one huge advantage. Data. Large organizations have access to huge amounts of data that can generate market insights, spot trends and almost “predict the future.”
Short-term and medium-term goals are decided based on those findings. Due to their dependence on environmental conditions, short-term goals can’t be yearly. Even longer than quarterly is stretching them. In a time of a crisis, short-term goals could be as short as daily and in more peaceful circumstances as long as quarterly.
Long-term goals examples
The further you look into the future, the more uncertain it becomes. The closer your milestones are to your vision, the less specific they become.
Let’s take, for example, The Walt Disney Company. Disney’s vision statement is:
“To be one of the world’s leading producers and providers of entertainment and information.” When Bob Iger took over as Disney’s CEO, his strategy was summed up in three priorities, 3 long-term goals:
- Create content of the highest quality
- Adopt cutting-edge technology to create content & connect with the customers
- Expand globally
These goals are specific enough to guide the decisions of everyone inside the company and are vague enough for everyone to interpret them differently. In other words, they are contextualizing the content of the rest of the strategy.
Other long-term goals examples are:
- Dominate our category
- Create a community-like culture
- Lead the sustainability transformation in our industry
- Create the most comfortable/cheapest/easiest to use [product]
- Digitize our processes
Short-term goals examples
Short-term goals are very specific.
Each department, team and individual has its own short-term goals to meet. What’s important is to have all of them aligned, some shared between teams and people and none isolated. Choosing short-term goals is the last step of your strategy’s implementation and should derive naturally from your strategic priorities.
Here is a list of short-term goals:
- Increase our revenue by 15% by the end of Q1 owned by Jane Doe.
- Reduce safety incidents by 70% by the end of Q1 owned by John Doe.
- Increase customer retention by 30% by the end of Q2 owned by John Doe.
- Hire 5 new salespeople by the end of the month owned by Jane Doe.
- Increase ad conversion by 10% by the end of the next month owned by Jane Doe.
How to set long-term goals
Long-term goals have 3 important components:
- Duration (NOT deadline)
- Specificity to dictate choices
- They are memorable
They don’t have a specific deadline. They have an estimated duration. You don’t “Dominate your category” by Dec 31, 2025. You “Dominate your category” in the next 3 years. If in 3 years you haven’t achieved your goal, then something went wrong. That’s how you should think of your long-term deadline, not as a hard date but as an estimated duration.
They dictate choices. Long-term goals outline the company’s strategy and inform every employee’s decision-making process. Ideally, when a team leader needs to make a decision, crucial or not, they can easily align it with the company’s strategy simply by visiting the long-term goals. That’s why they can’t be overly specific because they will only inform certain types of decisions and be useful to only a limited part of the organization. Thus, creating a big risk of internal misalignment.
They are easy to remember. If your people need to check the company’s long-term priorities every time they make a decision, they won’t. Make sure everyone understands and is on board with your priorities by simply making them memorable. In the end, you want the priorities to provide context, not represent all of your strategy’s details.
Benchmark the duration of your goals externally
Take as much guessing as possible out of the process. Have a hard look at your industry’s history and how long it took certain players to achieve their long-term aspirations. Find out what were their strengths, weaknesses and mistakes. Contrast them to yours and then make an educated estimation of your goal’s duration.
Do better than “best”
Shy away from generic goals like “be the best/first/most innovative.” Nobody perceives these the same way. For example, specify your ideal customer so your people know who NOT to target. Specify your product’s niche, e.g., “perfect scale models” instead of “just toys.” In essence, provide a context to decisions that will dictate a clear set of choices on every organizational level.
Write them for 5-year-olds
If a young child can’t understand your long-term goals, chances are your people will have a hard time remembering them. Simplify the language, avoid jargon, use verbs and be specific in your adjectives. Go beyond 3 goals and you risk giving your people contradicting priorities. Clarity unifies collective effort towards one direction.
How to achieve long-term goals in business
With shorter-term goals.
When you write your strategic plan, start from the end and work your way backward from your vision towards your current state. Here’s how to think about your plan:
- Your vision is your destination.
- Your long-term goals are your milestones.
- Your shorter-term goals are your odometer.
Starting with the end in mind gives your shorter-term goals a predictive power
So basically, your strategic plan works like a roadmap towards your long-term goals. Here’s how to think about tracking your progress: if you complete all of your strategic objectives, will you have achieved your long-term goals? If you haven’t achieved at least an 80% progress towards them, your tracking is off. You need to revisit your strategic objectives.
This tracking process cascades from the top of the strategic plan to the bottom. Check out how Cascade brings this strategic model to life and aligns your people’s day-to-day work with your company’s vision as a goal management software.