Utilizing SWOT for Personal Development and Hiring

Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.

SWOT analysis is most commonly applied to organizations and ideas. However, it can be used to great effect for personal development and as an aid in making hiring decisions.

What is SWOT?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It’s an effective tool for helping managers and entrepreneurs analyze their organizations and businesses, as well as specific products and services.

Introduced in the book Business Policy: Text and Cases (1965) by Edmund P. Learned, Roland C. Christensen, and Kenneth R. Andrews, SWOT analysis has remained an important analytic tool in the business sector, especially as pertaining to organizations. More recently, this longstanding tool has been applied to the individual with excellent results.

Personal SWOT Assessment

Conducting a successful, accurate SWOT assessment requires the setting aside of ego. Many of us have at least a passing familiarity with our own best (and worst) attributes, though achieving an objective consideration of ourselves as independent beings remains a difficult bar. For example, some of our positive attributes could present as weaknesses in particular contexts. If one is skilled at convincing people to adopt a specific course of action, one might be seen as either charismatic or as a snake-oil salesman. Often, the difference is minor and difficult to resolve firsthand. Striving to consider our own traits from a range of perspectives, as well as the reactions of others to us, can aid in creating a more accurate overall picture.

Before beginning, set aside some time to complete the analysis uninterrupted. Once underway, it’s better to finish in a single sitting, rather than suffering distractions as you attempt to focus on some other task. Also, commit to being as realistic and honest as possible. Understand that the resultant analysis serves as neither a congratulatory note nor a condemnation – it’s merely an exercise in better understanding the conjunction of your own strengths and weaknesses with the potential opportunities and problems you may be facing, albeit with the ultimate joint goals of minimizing negatives and developing more relevant skills.

As an entrepreneur, this is an especially useful tool for evaluating your own potential contributions as you begin a venture vs. those skills with which you’ll need assistance. By participating in a personal SWOT and providing honest feedback, you can mitigate some of the risk engendered by starting a business and achieve a better understanding of those characteristics and/or roles better earmarked for future hiring.

In her article “How to Conduct a Personal SWOT Analysis,” Forbes Contributor Lisa Quast suggests that individuals regard themselves as a “competitive product” so that they might more impartially compile a thorough list of strengths and weaknesses. Bearing that in mind, let’s get started:

Begin your personal SWOT by listing your strengths as they pertain to the project or business upon which you’re about to embark. If you get stuck, use the questions in the graphic as a prompt.

Next, do the same for your weaknesses. Then consider the external threats that could prevent you from starting or growing your business. These might be competitors, changes in the market, etc.

Finally, take note of your opportunities. Perhaps you have a patent for an innovative product and your competitors don’t. Maybe your business ideas or products have tested well with focus groups. Perhaps you’re able to undersell your competitors or go to market sooner. Maybe you have a better business idea in a completely unrelated field. Whatever perceived advantage occurs to you that might help to mitigate threats, write it down.

Putting Your SWOT to Work

Now that you’ve completed your personal SWOT, what’s next?

Just thinking about your strengths, weaknesses, opportunities, and threats isn’t enough. Now you need to further analyze your SWOT in order to convert those insights into personal development.

With your weaknesses and threats laid out on paper (however virtually), it’s time to consider how best to minimize them, especially if they might affect your strengths and opportunities. Are there mentors you can leverage to minimize your weaknesses or training that can help you to overcome them? Is there someone in your organization who might cover any skills at which you’re weak?

Detail how you intend to overcome threats. For example, if the market is slow, how will you spur consumer interest in your product? If your competitors are doing something similar, how will you differentiate yourself?

It’s also important to reflect on strengths and opportunities with an eye toward identifying ways to capitalize on them. Are there services you hadn’t previously considered that would make marketable use of your skills/talents? Is the present business environment well-suited for your current product and/or service offerings or is your current business holding you back from pursuing better opportunities?

As you’re drawing connections between the boxes, don’t neglect to investigate the ways in which your positives might offset your negatives. For example, can your connections (from strengths) help you minimize some of your threats? Can your talents and skills set you apart from your competitors?

Hopefully, this process has yielded new insights and either helped you to establish new personal development goals or identified weaknesses/opportunities in your business (or both!) enabling you to be better prepared for challenges going forward.

Once you’ve SWOTed yourself, you may wonder how else the technique might be applied.

SWOT for Hiring

When you’re interviewing a candidate, you’re probably taking notes. Sometimes these notes are all that remain after the candidate has departed and it’s time to make a decision. Rather than unfocused scribbling, why not turn that interview note-taking into a series of mini-SWOT analyses?

While questions are being asked of your candidate, record your impressions of their strengths and weaknesses. Afterward, take time to reflect upon the interview and consider the balance of opportunities and threats they might bring to the organization. For example, perhaps Candidate A wouldn’t necessarily fit in with the existing team culture, but they’d bring programming skills that might be beneficial for future products. Alternatively, Candidate B has requested to telecommute some days and, while you don’t favor that particular work mode, they also have a proven track record with one of your competitors and industry knowledge superior to other potential employees.

A good SWOT analysis can help you to make a more informed hiring decision that not only weighs an individual’s strengths and weaknesses – something that most people already do in the hiring process to varying degrees – but also considers what threats they might present to the organization and what opportunities they might help to create. Consider creating your own list of questions for each matrix component so you can more easily SWOT hiring candidates in a standardized fashion.

A SWOT analysis isn’t solely for business models and decisions. Turn the lens toward yourself and you might discover new areas for growth or even a new business idea. Turned on potential employees, SWOT serves as a helpful tool in the hiring process. Try it and see for yourself.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.

A loan of $450 helped to buy additional items to sell like canned goods, shampoo, and groceries.

I helped fund a microloan for Asuncion, a general store owner from the Philippines.

Here is Asuncion’s Story

If you are ever in Maasin City in the Philippines, you will probably run into Asuncion working hard to ensure that her general store runs smoothly. This middle aged mother of four has to work very hard to provide for her family. She has been doing this for the last nine years through her general store, where she sells a variety of items, including consumables and cosmetics.

Asuncion recently approached the Negros Women for Tomorrow Foundation for a loan to help her in her business. The money that she received would go towards buying new inventory for her store, including canned goods, groceries and cosmetics such as shampoo. She hopes that she will be able to save enough money to provide a more secure financial future for herself and her family.

Her loan was locally disbursed by the Negros Women for Tomorrow Foundation (NWTF), a non-governmental, microfinance organization that is determined to ensure that the people of the province of Negros Occidental have access to economic and social services.

Some of the services that the organization provides to its members other than microfinance services include insurance policies, accidental death benefits, medical and dental workshops, and hospital income benefits. The funds that Kiva lenders provide the organization help it to expand its reach in the province, enabling them to change the lives of even more people.

The NWTF, along with the Kiva lending platform, gave me the ability to provide the full $450 for Asuncion’s loan. Organizations like these, with the help of donors such as myself, are vital in helping to reduce poverty levels across the globe. This is because they help to provide people with all the means to escape the cycle of poverty in which they have been trapped.

The system works because all the bodies involved have the same aim, to ensure that low income earners gain access to socioeconomic services. The Kiva platform brings people together, while organizations like the NWTF then disburse these funds to needy entrepreneurs on the ground.

If you would like to transform the lives of a family, or even a whole community, in much the same way I have, why not visit http://www.kiva.org. There, you will find a long list of entrepreneurs that are in dire need of funding.

The Dr. Joe Johnson-led GoodField Investments funds promising startups. And through its non-profit foundation, GoodField funds entrepreneurial research, entrepreneurial ministries, and underprivileged entrepreneurs throughout the world. Visit this website to read more about GoodField Foundation’s mission to promote and support entrepreneurship.

Notes
1. This article was based on https://www.kiva.org/lend/825181

The Differences Between a Manager and a Leader

Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.

If you’ve ever worked for someone else, chances are excellent that you know firsthand that not all managers possess leadership skills. If you’re embarking on your own business venture, it’s especially important to recognize this so that you can either cultivate leadership or management skills in yourself or hire someone who can fulfill those roles.

3 Common Traits Shared by Leaders and Managers

It probably isn’t surprising that successful leaders and managers have multiple traits in common. In fact, that commonality is, itself, beneficial, as both roles share a significant overlap of required skills. Having an amazing idea that might revolutionize an entire industry will only get you so far on its own. The ability to execute is essential in order to transform the abstract into the concrete.

When perusing these traits, take a moment to consider the ones at which you’re best vs. those with which you’re likely to need assistance. Performing a personal SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis should help you to identify your opportunities and where you should concentrate your focus in order to maximize your chances of success.

Good Leaders

• Envision: They are thinkers who generate ideas and new ways of doing things.
• Inspire: They create excitement for their ideas and utilize their personal charisma and ingenuity to inspire people to follow them.
• Challenge: They encourage growth and the exceeding of previously applicable boundaries and limitations. They utilize innovation and creativity to spur progress.

Good Managers

• Execute: They implement practical plans in order to meet specific goals.
• Encourage: They impel their team (or subordinates) forward by providing feedback and training as necessary.
• Direct: They indicate how tasks should be accomplished. Guidelines and deadlines are provided in order to keep the project on track.

This infographic helps with the visualization of how these various traits align:

Presented in this fashion, it’s easy to see how the various traits align across roles. You’ll likely identify some with which you’re especially comfortable and others with which you’ll need assistance. For example, perhaps you’re an idea person, but have difficulty creating a workable plan for execution. A team member who can parse your vision into actionable components can help to put you one step closer to the fruition of your dream.

Think about Jobs and Wozniak. Jobs originated the ideas that Wozniak, with his technical know-how, was able to execute. They (sometimes) worked well together and also functioned to keep each other in check. It’s clear that history will remember Steve Jobs as a leader. Steve Wozniak, while certainly a creative inventor and idea man, may well be chiefly remembered as the individual who turned Jobs’ vision into a viable product.

I wanted to highlight the ways in which leaders and managers can work together to realize a vision before addressing their differences in order to emphasize the principle that one role is not more essential than the other. Rather, there are occasions for which a leader is better suited and ones for which a manager is the right fit. Both personality types can – and should – learn from each other in order to maximize their joint potential.

Differentiating the Managers from the Leaders

If you’re hiring or considering taking on a partner, knowing whether they’re a manager or a leader is essential.

Managers and leaders will differ in their work styles and abilities, from the ways in which they approach and view their jobs, to how they deal with conflict and missed benchmarks.

The differences between managers and leaders are not cut-and-dried. They exist on a spectrum and every individual will incorporate characteristics from each side. The most important challenge to address is that of aligning the range of characteristics with your own business goals.

Goals

A leader aims to change the way things are done. They pride themselves on fostering creativity and innovation. They are proactive and frequently think about how tasks might be better accomplished.

Managers are primarily process-oriented. Given an end goal, they implement a plan to achieve it and react to whatever roadblocks might be encountered in their attempt to meet that goal. A manager seeks stability in keeping the system functioning smoothly.

Planning

Leaders focus on the long-term; the end vision. They focus more on the idea than on how to achieve it. Leaders are ‘big picture’ people.

Managers focus on short-term goals; the little steps that will hopefully lead to realizing the big idea.

Style

In order to accomplish their vision, leaders use their personal charisma to impart a passion for their ideas in their followers. The followers then internalize those ideas and are individually motivated to achieve them.

Managers, conversely, specifically direct their subordinates’ activities. Most often, their authority is derived from their title/position and their subordinates follow them as a matter of duty and process.

Success Equals Leading Plus Managing

Many articles that focus on leadership traits tend to take a negative view on managerial traits. I don’t believe that this should be the case. To succeed, businesses need both leaders and managers. Certainly, managers with good leadership skills are of benefit to everyone around them, but the tasks that managers particularly fulfill are an essential component of success.

Ultimately, possessing the traits of both leader and manager can be helpful for ensuring success. Entrepreneurship often requires both skill sets and entrepreneurs lacking strength in one or the other should team with someone who can help to fill in the gaps. After all, knowing (and addressing!) your own strengths and weaknesses will help you to become more successful in the long run.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.

A loan of $300 helped increase her husband’s general store business.

I helped to fund a loan to Sajida, a housewife from Pakistan
Here is Sajida’s Story

Sajida is a housewife who lives in Rawalpindi, the fourth largest city in Pakistan and a military are as this is where the Pakistani Army is based. She is married and has three children. Her husband fully supports his family, through the general store that he has been running for a total of two years.
There is so much room for his business to grow, but he is restricted by the amount of money that he has available. That is why Sajida is seeking a loan, so that he can add the stock in his shop a nd include more commodities such as rice, sugar, tea bags, milk and other consumer items. She knows that with this support, he will maximize on his provide and be better able to provide for the family. She has decided to apply for a loan from BRAC Pakistan, so that he can increase his stock holding.

The loan she received was locally administered by BRAC Pakistan, which works with Kiva at the local level. The organization is focused on providing credit to entrepreneurs who would like to expand their small businesses. This provides an excellent solution to the people as BRAC Pakistan awards loans to those who do not have any other means of accessing funds. The money that Kiva provides to these organizations helps them elevate the lives of families in Pakistan.

Through Kiva and BRAC Pakistan, I was able to provide full funding of Sajida’s loan. I enjoy working with these organizations as together we can provide low income earners with a means to get themselves out of poverty.

These organizations work well together because they all have the same aim, to provide low income earners with funds that they desperately need. Kiva sources individuals such as myself as we are willing to provide funding for those in need, while BRAC Pakistan distributes the funds to needy individuals they have identified.

By funding Sajida’s $300 loan, I have given her husband the opportunity to work hard and provide for his family. If you would like to change a person’s life in a similar fashion, you should visit http://www.kiva.org. On this website, you will find loan applications from hundreds who are in need.

Lead by Dr. Joseph Johnson, GoodField Investment provides strategic and capital support for startups and entrepreneurs. For more information about GoodField, visit this website.

Notes
1. This article is based on https://www.kiva.org/lend/824667

Avoiding Startup Mistakes on the Path to Success

Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.

No one begins a new endeavor while planning to fail. However, too many entrepreneurs begin their ventures making mistakes that can cost them their chance at success. Here are 12 of the most common startup mistakes to avoid as you carve your path to success. Chances are, you’ll make a few mistakes on the way despite the best of intentions, but this list should help you sidestep at least a few.

12 Common Startup Mistakes to Avoid

1. Failing to Plan

How’s that business plan or business model canvas coming along? What activities do you have planned next week, next month, or six months from now?

Planning is a necessary part of business. You cannot succeed without a plan. Failing to create a workable plan that details your activities, as well as your expected outcome, could put you in a place where you’re making poor decisions because you lack data or a roadmap. Your plan is like your GPS – it can provide you with a path to get you from one point to another using the data that you have. With more input, whether due to a wrong turn, a new shortcut, or information about traffic, you can recalculate your plan to make sure it keeps working for you. In short, a plan can help you reach your destination with fewer detours.

2. Ignoring the Customer

Focusing on your goals, products, and services can be an effective way to get things done, but it shouldn’t blind you to the most important aspect of your business. You never want to shift the focus from the customer or client.

The needs of your target audience are extremely important. They are what keep you in business. Customer feedback is amazingly valuable and can help you to pinpoint issues with your products or services.

For example, if users are finding your app interface clunky or that your proprietary cleaning solution leaves an unpleasant odor, that’s valuable feedback you can use to better your offerings. That’s why the lean startup model emphasizes feedback as a way to provide information for future iterations of products or services. If you’re trying to fulfill a particular need or fix an issue, sometimes the customer is the one who can help you determine how best to do it. Keep your ears – and inbox – open.

3. Poor Goal-Setting

Not setting goals, setting unrealistic goals, and setting unmeasurable goals – these are all symptoms of poor goal setting. If your goals are your benchmarks, you need to be able to demarcate a clear path to get you there. That’s where SMART goals come in.

Your goals should be Specific, Measurable, Attainable, Realistic, and Time-based. Saying that you want to revolutionize the way insurance is sold is not setting a SMART goal. Taking that overarching vision and breaking it down into digestible pieces that can be independently achieved and measured within a particular timeframe can increase your chance of success and provide you with data about where you went wrong.

4. Poor Hiring

Finding the right people can be difficult, especially when you really need to get a position filled or feel like you need the help. Poor hiring can have dire consequences. Hiring talented individuals who aren’t invested in your vision can hurt just as much as hiring individuals who don’t have the right abilities.

Rather than rushing into hiring, consider the experience and qualities you’d like certain roles to bring to the table. When seeking help or interviewing, focus on those skill sets, but continue to keep an open mind. The hiring process may help to reveal other, previously unanticipated, skills you’d appreciate in a candidate. Be upfront about your expectations and your desired level of commitment from candidates so you can make the best choice for you and your company.

5. Spending Too Much or Too Little

There are plenty of tales of companies who blew through their investors’ money by renting lavish offices or building untested prototypes that nobody wanted. Similarly, there are tales of organizations that were so tight-fisted with cash, they didn’t get to market soon enough.

Striking the balance between spending too much and spending too little can be hard. It’s necessary to prioritize expenses and focus on investing in the right things, i.e. the things that will get your brand off the ground. A well-conceived business plan can provide guidance on spending, as can a business model canvas that illustrates the different expenses necessary to make your value proposition a reality.

6. Doing Everything Yourself

Starting a business is a difficult endeavor that requires a lot of time and energy. If you’re trying to do everything yourself, you’ll burn out quickly or lose your passion. That passion, however, is exactly what you need to keep your project going.

Don’t drain your energy on tasks that can be delegated. Whether you hire the right person for the job or outsource, put your energies into what you do best and invest in others who will bring the best to your company.

7. Falling Prey to Fear of Failure

Fear of failure can be healthy in small doses, particularly when it helps you minimize your risks. It can also be a major hindrance. Don’t let fear of failure stop you from trying something new. Rather, approach it as you would any business decision. Enumerate and research your options and then move forward with caution. Get feedback, make changes, and keep moving forward.

8. Working in a Bubble

You aren’t alone in what you’re trying to do. While you may be focused on a particular industry and a particular product, there are plenty of entrepreneurs attempting to launch a successful business. Networking with other entrepreneurs and vendors can help you to advance your goals, get useful feedback, and have a sounding board to provide useful advice.

9. Lacking Flexibility

Setting a plan in place feels good and sometimes it’s necessary to stick to the plan, even when things aren’t falling into place. It’s also necessary to differentiate, however, when it’s time to change course.

A plan cannot be set in stone. It must allow for deviations. An effective plan may even detail when it’s time to consider other options based on results (or lack thereof). Feedback and data can help you determine whether it’s time to pivot or rework your business model.

10. Setting Unrealistic Expectations

Projections should be based on data, right? However, sometimes it’s hard to buckle down and create realistic expectations because we’re enamored with our amazing idea that is going to change (insert your preferred industry or market sector here).

It’s important as entrepreneurs to remove ourselves a bit from the blinding specter of our great idea in order to gain some perspective on reasonable expectations. While a business plan or business model canvas can help with this, it’s extremely important to solicit information from potential customers and clients – your target audience.

Knowing your target audience can help you better determine how they’ll react to your product or service. Additional data about the economy, spending, and competition can also help you to set more realistic expectations. Coupled with SMART goals, your new realistic expectations can help guide your company to success.

11. Intuition vs. Data

Gut feelings are nice, but they aren’t a science.

Steve Jobs had a strong gut feeling about the future success of a transportation device that he believed was set to change the world. He was prepared to invest millions in the company. The product? The Segway.

For Jobs, his intuition worked wonders in the field he understood – computing. When he stepped out of that field, his intuition failed him. Why? Even though he was quite intuitive at Apple, that intuition was based on years of dealing with computers, designers, and more. Intuition is generally only helpful when you already know a great deal about the subject matter.

Data, on the other hand, is invaluable. So long as you can approach data with a clear mind and allow it to paint a picture for you (rather than trying to force data into your preconceived framework), you’ll be able to utilize it to aid in making smarter decisions. Sure, intuition can still play a part, but never omit the data.

12. Not Recognizing or Researching the Competition

You aren’t alone. No matter how ingenious your product or revolutionary your service, you have competition. Don’t ignore them.

While your competition may not be providing the same exact product or service, they may be attempting to meet similar needs or solve a similar problem in their own way. Why should consumers choose you? To be able to effectively answer this question, you have to research your competition and learn more about what they’re trying to do and how.

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Entrepreneurs are humans and bound to make mistakes. However, we can learn from our mistakes and others’ – and capitalize on them. Making a few mistakes won’t inevitably result in failure, but refusing to learn from them most likely will.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.

A loan of $175 helped to purchase more frozen food to sell like hot dogs and longganisa.

Dr. Joe Johnson funded a microloan for Myra, an entrepreneur from the Philippines.

Here is Myra’s Story

The bustling metropolis of Roxas City in the Philippines is home Myra, a single mother who has to work very hard to support her family. Her main source of income is her business selling frozen foods to friends and neighbors, something that she has been doing for the last year.

Recently, Myra approached the Negros Women for Tomorrow Foundation for a loan to help her get more supplies for her store. She needed to buy more frozen goods to sell such as hot dogs and longganisa (a type of sausage), and other frozen foods. She hopes that she will be able to grow her business using the profits gained from the loan, so that she can provide a more secure future for herself and her family.

Her loan of 7,000 Philippine Pesos (PHP) was locally overseen by the Negros Women for Tomorrow Foundation (NWTF), a Kiva partner and non-governmental organization. The foundation’s main aim is to provide the men and women from low income households in the province of Negros Occidental with the means to attain financial self-sufficiency.

The organization does this through offering its clients not only microfinance services, but a host of other services as well including life insurance policies, accidental health benefits, hospital income benefits, death benefits. The funds that Kiva lenders provide go towards helping to expand the reach of the organization so that it can cater to more low-income urban and rural communities in the region.

Thanks to Kiva’s lending platform and the NWTF, Dr. Joe Johnson was able to fully fund Myra’s 7,000 PHP loan, giving her the chance to realize her dream of a more secure future. These organizations, with the help of lenders such as myself, are helping to change the lives of thousands of people across the globe by giving them the chance to escape the poverty that surrounds them.
One of the reasons this works so well is because everyone involved has the same goal, to ensure that financial services are provided to those that need them the most. Kiva brings financiers like Dr. Johnson together, while institutions like NWTF find needy entrepreneurs who are in need of funding and distribute the funds to them.

If you would like to affect someone’s life in the same way, you should visit http://www.kiva.org. The website contains a list of thousands of entrepreneurs who are in serious need of funding.

Notes

1.       This article was based on https://www.kiva.org/lend/837557

Dr. Joseph Johnson is an entrepreneur, investor, and startup expert. He is also the founder and principal of GoodField Investments, a company that provides strategic and capital support for startups and entrepreneurs. For more on Dr. Johnson and his firm, click here.

Achieving Follow-On Success After Failure

Joe Johnson, Ph.D.
Entrepreneur. Investor. Start-up Expert.

Sometimes failure isn’t the end, but a new beginning.

While fear of failing can stop would-be entrepreneurs in their tracks, actual failure provides many lessons for future success. How can you effectively mine that failure for all it’s worth when you’re faced with a crumbling dream?

The Benefits of Failure

Resilience: the knowledge that the world doesn’t end with failure

After you’ve failed at something, whether a test in school or going bankrupt with your first company, you learn an invaluable lesson: The world doesn’t end. You failed, so what? Yes, failure can have very real consequences. However, we have the ability to bounce back and continue with our lives. This resilience can allow us to continue down an entrepreneurial path, even when we know the possibility of failure remains.

Ability to Take Risks

Those who take risks are the most likely to fail. In business, though, taking risks can lead to the biggest successes.

Spurring of Future Growth

“Knowledge is power,” and “The more you know, the more you grow,” were popular public service announcement taglines in the 1980s. Their enthusiastic positivity continues to ring true, however. While failure is often equated with feelings of inadequacy and loss, we can capitalize to create future growth by cultivating a learning mentality and thoroughly analyzing our failures.

Reigning in the Ego

Another important benefit of failure is the way it can help us to keep our egos in check. We are not infallible – and that is perfectly OK. We’re going to make mistakes, but we have the opportunity to learn from them and to become better entrepreneurs and better people.

Learning from Failure

Failure provides more information. It can help us learn more about our target audience or the marketplace in general. It can inform our opinions on the best way to launch a service or product. By investigating the mechanisms of failure and learning more about why particular methods, services, business plans, or products didn’t work, we are armed with more knowledge to help propel us toward success.

To effectively learn from our failures, we must consider the different events that led to that situation and sift through the mistakes to pan for wisdom. These tips can help you to capitalize on failure and to find those nuggets that will aid you in achieving follow-on success:

Avoid the Blame Game

“A culture that makes it safe to admit and report on failure can – and in some organizational contexts must – coexist with high standards for performance.” (Edmondson, Amy; Harvard Business Review)

While there are circumstances for which blame, and the consequences that accompany it, must be assigned, doing so can serve to make the process of learning from failure more challenging. If those involved fear blame and punishment, they may be reluctant to come forward and take responsibility or to honestly describe the processes that led to failure.

Categorize Failure

Being able to identify where in the process the failure occurred can help you to learn more from the situation. For example, in her article for the Harvard Business Review, “Strategies For Learning From Failure”, Amy Edmondson mentions three categories of failure: preventable, complexity-related, and intelligent.

Preventable failures include mistakes such as poor training and poor implementation. In the case of poor training, a better orientation process can be implemented to help prevent the same issues from occurring in the future. Likewise, poor implementation may be improved with better strategic planning and research. While some of these preventable failures may require that blame be assigned, it is generally more important to fix the mechanism(s) that facilitated the failure’s occurrence in order to avoid similar failures in the future.

Complexity-related failures are generally regarded as par for the course. While strategic planning is done in order to avoid them, complexity-related failures are seen as inevitable for many large organizations dealing with a multitude of processes. In this situation, it is necessary to identify the failures and then revisit the policies that enabled them to occur.

Intelligent failures are the best failures. That is, they’re the types of failures that occur because of trailblazing and experimentation. They represent the risks that entrepreneurs take to obtain results. For example, if you’re introducing an innovative new product to the marketplace, you risk failure because the product has never before been introduced. While you’ve performed your due diligence, researched your target audience, and participated in focus groups, there’s still a chance that the product won’t be well-received.

Even should the new product meet with failure, the occasion provides an opportunity to learn about introducing products to the marketplace, the kind of products your target audience desires, the price that your target audience is willing to pay for your product, etc.

Apple, which excels in the smartphone market, continues to listen to the marketplace when it comes to their iPhone. Thanks to information available regarding the types of features consumers desire in a phone, they’ve created phones of various sizes and colors to appeal to a broader spectrum of potential purchasers. While their iPhone 5c did not prove to be as successful as other models, they learned that most iPhone buyers appreciated the luxurious feel of the metal and glass device and were willing to pay more for it, even when a less expensive model was available. This knowledge freed the company to experiment with other features that ultimately proved more successful.

Focus on the Things Within Your Control

While there are undoubtedly some things in the marketplace you can’t control, there are plenty that you can. After you’ve categorized your failure and have begun to pick apart the pieces, identifying those elements that were within your control can help you determine how to better approach a similar situation in the future.

It can be easy to say, “The market wasn’t ready for my product,” but this places blame on the impersonal market, rather than identifying the factors that lead to failure. Focusing on the features of the product, how it was advertised, the audience to which it was advertised, etc. can aid an entrepreneur to better determine which factors were within their control and how they could’ve better approached or researched them. Similarly, it can help you to identify those elements that were out of your control, but for which you should remain alert in the future. For those who offer services instead of products, the mechanisms are the same despite the offerings being different.

Once you’ve tackled the arduous task of identifying and learning from your failures, you may be wondering, “How can I use the tools from my failures to propel future success?”

Applying the lessons learned can be difficult, but are a necessary part of future success. There are plenty of entrepreneurs who’ve successfully embraced their failures and achieved follow-on success.

From Failures to Success

Some business heroes have been practically canonized for their ability to go from business or personal failure to success. The most commonly heralded failure-to-success story is that of Steve Jobs, but he wasn’t alone in his ability to propel himself forward after failure came knocking. Here are a few other businesspeople who chose to keep innovating despite early failures:

Walt Disney

Disney is a household name, but before Walt started Disney Brothers’ Studios in 1923, the studio that would become The Walt Disney Company and eventually encompass amusement parks, full-length animated films, television channels, and a marketing empire, he failed and more than once. Disney started two companies before he and his brother found the right magic.

Mark Zuckerberg

While Zuckerberg seems to have hit the jackpot with Facebook, he’s found plenty of failure on the way. The successful social media website has made numerous mistakes as it works hard to not only stay relevant, but to innovate. Zuckerberg hasn’t shied away from failure and seems to be willing to readily admit his mistakes. Repeatedly. Why? Because he’s willing to learn from them and to pivot when necessary. From poor acquisitions to new features with which no one really bothered, Facebook is fairly open about where they’ve blundered, a pretty clear indication that they’ve taken the time to identify the lessons in each error.

Arianna Huffington

Chances are an article or two from the HuffPo have found their way to your Facebook newsfeed today. Prior to launching the now-ubiquitous Huffington Post, Arianna Huffington – author, columnist, and businesswoman – was rejected 36 times by publishers who didn’t see the appeal of her second book.

Eventually, she went on to co-found the Huffington Post to plenty of negative press. While initially rejected by the establishment, the Huffington Post has grown and the savvy businesswoman has recently stated she’s stepping down as the Editor-in-Chief to focus on her new company, Thrive. Huffington currently has fifteen published books to her name and is seeking to make a splash in the wellness market.

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One personal characteristic these entrepreneurs shared is that they had a vision and determined to see it through, regardless of missteps and failures. They learned and readjusted their goals when necessary. Ford and Edison faced failure, learned from it, and then had massive follow-on success. The lesson of their fortitude remains important.

To achieve follow-on success, it’s necessary to distill the lessons learned from failure and pour them into our next venture or into another component of the same venture. For example, a failed product launch can provide valuable information about launch techniques and timing, product design, and the needs and desires of the target audience. All of this information can go a long way toward making subsequent launches more successful.

Whether you’re facing failure and unsure of what to do or considering next steps after failure, take heart. You can succeed and you now have even more tools at your disposal to help make success a reality.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.

Knowing When to Pivot Your Startup

Joe Johnson, Ph.D.

Entrepreneur. Investor. Startup Expert.

I get it – your startup is your precious baby. You love the idea and you’ve invested tons of hours, gallons of sweat, and more blood and tears than you’d like to remember. But sometimes it’s necessary to move on from that initial idea and pivot in order to save your startup.

Steve Blank noted that many people didn’t really understand the definition of a pivot in his 2014 Entrepreneur article “Do Pivots Matter? Yes, in Almost Every Case.” He defines a pivot as “a substantive change to one or more of the 9 business model canvas components.”

These nine components include:

• Key partners
• Key activities
• Key resources
• Value propositions
• Customer relationships
• Channels
• Customer segments
• Cost structure
• Revenue streams

A pivot isn’t a failure – it’s a commitment to finding something that works for you and your business. In fact, most successful companies have pivoted at one time or another. That said, knowing when to pivot and how may be part science and part art. Finding the right change to make can be difficult.

While often painted as a stroke of inspiration, most successful pivots actually happen because of hard work, ingenuity, and research. Although there are some factors that can indicate you’re on a sinking ship, there’s no guarantee that a pivot will be the solution.

You can have positive feedback from your customers, users, or clients – even amazing, shout-it-from-the-rooftops feedback – and still need to pivot due to a lack of need or desire for your services, the wrong business model or strategy, or a combination of factors. Or, you may just have slow growth and a lean team that’s barely hitting its numbers, but is attracting investors because of the strength of your startup idea.

Chances are, you’re somewhere in the middle and not sure which way you’re headed. It’s a scary place to be, with that ambiguity and uncertainty of the future staring you straight in the growth margin. While you may want to hold on to your initial startup idea for dear life, there will come a point when you need to be honest and commit to pivoting, staying with the initial plan, or scrapping everything.

Here are some indicators that may suggest it’s time to turn your business in a new direction.

The Results Just Aren’t There

Not every great idea sells. Whether the target audience just isn’t responding or it’s not quite the solution you thought it would be, poor results can be an indication that it’s time to change course.

By clearly defining the parameters of success for a product or service launch, you and your team can determine whether you’ve met your goal, and, if not, try to find out what part of the launch fell short. If the results aren’t there, it’s time to take your company’s pulse.

The Part is More Than the Whole

Sometimes in building a startup, you find that you and your team do something really well…but it isn’t exactly what you set out to do. For example, maybe the proprietary analytics system your team created to track user engagement on your app better serves today’s app designers than whatever else is on the market, but your latest app isn’t getting enough daily users. It may be time to focus on packaging the analytics and providing it as a service to other app designers, rather than focusing on the initial app.

Someone Beat You to the Punch

The iPod was the early 21st Century’s ubiquitous MP3 player. If you didn’t know better, you might think that it was the first MP3 player. First offered in 2001, the iPod wasn’t the first MP3 player to hit the market. Or the second. Or the third. In fact, it wasn’t even one of the first five. But Apple knocked it out of the park with great design and an easy-to-use interface that truly created – and cornered – the MP3 player market.

By the time Microsoft joined the party in 2004, they faced a long road ahead to try and make a profit from their Zune devices. Eventually, Microsoft pivoted, stopped producing the Zune in 2011, and focused on providing their digital media content through their Xbox systems. Apple simply did it better and Microsoft should’ve pivoted earlier vs. facing years of decreased sales. The moral of the story: Know when the competition has you beaten.

Your Heart’s Not In It

Running a startup is no easy task. If you aren’t excited to keep seeking investors or revising your product, then it may be time to take a step back. Sure, not every part of running a business is going to have you feeling energized, but if it’s frequently difficult to find the energy to do the things that need to happen to get the project off the ground, then maybe it’s not the right idea for you.

Often, the financial success of your business is interconnected with your excitement about your business, and vice-versa. So, if you’re suffering from the startup blues, whether the cause is financial or something else, it may be helpful to try to reconnect with your idea and to remind yourself what excited you about it in the first place. If you’ve lost that loving feeling, it may be time to pivot or start over.

Famous Pivots

You may be aware that some of the products and services we all use and love are the result of some pretty serious pivots. These entrepreneurs were able to read the signs and make a daring choice to change course. While it doesn’t always work, sometimes the payoff is exceptional.

Instagram
Instagram, the most popular iPhone photo app, went by Burbn and focused on letting people check into places, much like Foursquare used to, but with pictures and a gaming component. The whole thing felt too clunky, so the creators stripped it down. Instagram has remained popular and was acquired by Facebook (another great pivoting company) for $1 billion.
Starbucks
It may be hard to imagine the coffee behemoth ever getting it wrong, but, hold on to your mug, Howard Schultz actually started out selling espresso machines and beans. If he hadn’t pivoted to selling his own brews after visiting Italy in 1983, he may have had to close up shop decades ago.

Wrigley
William Wrigley Jr. was a consummate salesman and took to giving gum as a freebie with purchases. The popularity of his free gum got him on the right track, though, and he pivoted to create his own chewing gum including Juicy Fruit and Doublemint.

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When things aren’t working out how you’d like, it’s no easy task to take note and make changes. But doing so can save you from even more sleepless nights by attempting to pivot successfully, rather than going down with the ship.

If you’re still unsure whether you should pivot, stay the course, or close up shop, take a good, close look at the projections and how you and your team do what you do. Be honest and ask yourself, “Is this a feasible business model?” If this was someone else’s business, how would you advise them?

It’s easy to just keep going and hope things get better. But they usually won’t unless you make serious changes. Most of my startup successes have come as a result of a major pivot or several pivot steps that I had to take. Sometimes the pivot was very simple, while on other occasions it was more complex.

While it’s best to pivot when you still have options, sometimes we’re forced to pivot because no other good options exist. I’ve been there and it’s not an enviable position. But when the facts speak and say that it’s time to change or say goodbye to your business, you do what needs to be done.

Pivots don’t always occur when your back is up against the wall. With one particular startup, I knew that a serious pivot to a different business model would allow me to better succeed. I didn’t want to pivot because things were working fine, though they weren’t what they could’ve been. One day, I faced the facts and decided to go through the work of pivoting. It was difficult, but only three months later, it seemed like I had a completely different business. The pivot led to all kinds of new ideas and we went on to break records.

Whether it’s the only course of action, or just one of many options, a pivot at the right time can help you increase your odds of success. Don’t be afraid to pivot just because it’s difficult or time-consuming. After all, your pivot may turn out to be the next Instagram or Starbucks.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.

Entrepreneurs: How to Overcome Your Fear of Failure

Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.

Fear of failure is the most common fear experienced by new entrepreneurs when starting a business. As I discussed in an earlier post, the fear of failure can be broken down into categories and is widely accepted as part of the entrepreneurship journey. The question is, how do you overcome the fears you face? Here are several ways in which your fear can be transformed into a profound learning experience, one that will benefit your future venture in significant ways:

Failure is Part of the Process

While failing can be a frightening prospect, the more we fail, the more tangible experience we gain. This experience can be used productively in the future to ensure that the same mistakes are not repeated. Mari Vavulski, the CEO of Startup Estonia helps entrepreneurs to grow their business ventures. She promotes the productive use of failure, stating,

“In order to succeed, you need experience. So, you test, you fail, you pivot, and you start over again. The problem comes if you don’t learn anything from those failures.”

She is far from alone in espousing this philosophy. Many of the most successful entrepreneurs have experienced failure after failure, Walt Disney being a prime example.

Case in Point #1: Walt Disney

Disney founded his first cartoon studio when he was just 22 years old, after having received multiple rejections as a cartoonist. He made an early business decision that resulted in his venture going bankrupt. He then headed off to L.A. – sans belongings and money – to become an actor, an effort which also failed. He then proceeded to found his own cartoon company with his brother. During the Second World War, his studio was transformed by the military into a repair shop for tanks and artillery. This led to Disney being in debt, at war’s end, by over four million dollars! Talk about a living nightmare. Despite these setbacks, he still persevered. By means of producing a feature overseas, Disney was able to rebuild his business from scratch. His name is now one of the most well-known in children’s entertainment and film throughout the world.

Case in Point #2: Mark Cuban

Another example of a successful entrepreneur who turned his passions into big business is Yahoo founder Mark Cuban. Prior to his success, Cuban failed at most of his jobs. He tried carpentry, cooking, and waiting tables, but couldn’t seem to hold down a career. He says,

“I’ve learned that it doesn’t matter how many times you’ve failed. You only have to be right once. I tried to sell powdered milk. I was an idiot lots of times and I learned from them all.”

By TechCrunch (509306865DH00026_TechCrunch) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)%5D, via Wikimedia Commons

The list goes on and on: Michael Jordan, Donald Trump, Richard Branson, Bill Gates, Oprah, etc. If you begin to investigate these successful people, you’ll discover their stories of struggle and the sometimes amazing details of the experiences they’ve individually had to overcome. There’s a quote by Jonathan Boyle, the founder of Guns & Oil Beer Co., on allowing failure to keep you humble and lead you to success. He says,

“An entrepreneur’s success is laced with failure. A first failure teaches us the humility we need to be successful. The sooner you fail, the sooner you realize you don’t have all of the answers. You get hungry and you work harder. You seek advice, you share stories, and you connect with people. It helps you control your emotions because you’ve been there before. And, ultimately, it keeps you humble.”

Understanding that failure is part of the process of starting a business, is the first step to moving past the fear of failure. You can reassure yourself that failing is not the end – quite the opposite, actually.

Here are some other tactics you can use to work through your fears of failing:

Identify Your Fear and Understand It

The enormity of the emotion can, itself, engender powerful negative feelings. If this happens, remember to take deep breaths and set aside time to sit with the feeling. Oftentimes, we are scared of unknown negative possibilities, and, by fearing them, create our own self-fulfilling prophecy.

It’s important to pinpoint your fears and understand why they’re present. Instead of backing down from a fear, investigate it. Discover its root cause and determine where the risk truly stands in reality.

Chris Hunter, founder of Phusion Projects, recommends allowing yourself to consider a worst case scenario, as this often is far less threatening when explored in detail than you imagined. By doing so, you’ll free yourself from the debilitating fear and be able to power forward with a sense of courage and control.

Visualize Obstacles and Think Positively About Them

Positive thinking only works if there is a realistic understanding of what might and might not happen in your future business venture. A recent study published by the Journal of Experimental Social Psychology demonstrates that positive thinking alone isn’t enough. There needs to be an element of mindfulness as to what the future might hold and how you will overcome any obstacles.

Think of a situation in business that scares you. Then, imagine the obstacle in detail and allow yourself to feel the fear. Visualize yourself moving forward from it in a number of creative ways. Watch yourself succeed by eliminating these barriers through a series of techniques. This will help you feel prepared for the reality of business and the obstacles that you will face.

Externalize Your Fear

Fear is an internal experience that can feel uncontrollable but it doesn’t have to be that way. Externalizing your fear means moving it from a mental space to a physical space. For example, you could set your fear up with an email address. That might sound a little odd, but giving your fear an identity and sending it emails is an activity that allows you to detach from it and address the feeling. The same can be said for talking to a business coach, writing a ‘fear journal’, or making lists of your fears on a piece of paper and addressing them individually.

Internalizing fear can lead to loneliness and an inability to move forward. It can be difficult in business to express fear due to the expectation that you must be optimistic and positive at all times. Martina Welke, founder of Zealyst, advises that it is important to have a few trusted confidants with whom you can be honest and upfront. Talking to these selected friends or colleagues can take a weight off your mind.

Break Your Goals into Smaller Steps

The prospect of starting a business can seem overwhelming when looking at the big picture and can intensify any fears being felt. This is why breaking your goals down into small steps can result in the process seeming much less daunting. For example, you can take a pen and paper and make a plan, much in the same way you would when writing an essay. This plan might include registering the company, reducing your hours from your previous job to focus more on your new business, approaching particular investors/customers, etc. Doing this will help you see how it is realistically possible to achieve your goal. Once you’ve accomplished the first goal, it’ll build momentum for you to continue making incremental achievements.

Embrace Your Fear

Being uncomfortable is a natural feeling when starting a new business. It is a scary endeavor and beset with uncertainty. Remember, though, that fear can lead to success and fear of failure is commonplace. It’s best to wear your fear as a badge of courage. Corey Blake, CEO of Round Table Companies, says that by wearing your fear with pride you will dismantle its power over you. So, the message here is to get comfortable with your discomfort, accept that running your own business does hold risk and uncertainty, and know that your journey down this path is a brave one.

Know What You Lose By Not Trying

If you don’t make the attempt in the first place, you will never achieve your dreams or discover your true limits. Could you have done it? The lessons you might learn from failure, such as new ways of addressing a business venture or networking with others, will never be known. These are, in themselves, things to fear! Failing is not failure but a steppingstone to success. Not trying at all is the only path which guarantees that you will completely fail.

I have encountered many fears throughout my business ventures and have learned how to navigate through them. Let me tell you, what is on the other side of your fears will amaze you. Take it from those who have gone before you and found success. Walt Disney…Mark Cuban… There are ways you can overcome your fears and be successful. I don’t think anyone would say it’s easy, but I think all would agree that it’s ultimately worthwhile.

References:

Bizjournals.com (2015) 11 ways to overcome your fear of failure. Online. Available at http://www.bizjournals.com/bizjournals/how-to/growth-strategies/2015/01/11-ways-to-overcome-your-fear-of-failure.html

Brinkmann, J. REPORT OF THE FACE PROJECT DELPHI RESULTS . FACE Entrepreneurship Failure Aversion Change in Europe. PDF, http://www.face-entrepreneurship.eu/images/Face/knowledge/8/DELPHI_Study.pdf

Cope, J (2016) Entrepreneurial learning from failure: An interpretative phenomenal analysis. The Hunter Centre for Entrepreneurship. University of Strathclyde. Pp1.

Estonianworld.com (2016) Project aims to help overcome fear of failure in entrepreneurship in Estonia. Online. Available at http://estonianworld.com/business/project-aims-help-overcome-fear-failure-entrepreneurship-estonia/

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.

SMART Goals for Today’s Entrepreneurs

Joe Johnson, Ph.D.
Entrepreneur. Investor. Startup Expert.

The importance of SMART goals cannot be overstated. SMART goals can help to make the impossible possible. They help by creating a roadmap for your vision.

Not everyone is a fan of SMART goals. Some people will tell you that it’s better to aim for hard-to-reach goals and that having an uncommon goal is the only way to achieve change. Perhaps that’s how Richard Branson or Elon Musk work. According to a now-removed blog post, Richard Branson prefers to make lists, though it’s clear that both men tend to shoot for the stars.

For many business owners, however, that’s not a practical philosophy. While aiming to serve the largest possible customer segment with your amazing and unique value proposition is admirable (and utterly worthy of the effort), it’s just as important to set smaller, incremental goals along the way. This point is, I think, what the detractors of SMART goals don’t appreciate. Not all of your goals have to be SMART goals – you can still aim to be the first person to enable space tourism and dream big while utilizing SMART goals to facilitate your dreams.

For example, in the case of space tourism, the most essential element is a safe and reliable transportation system, whether it’s a shuttle, a capsule, or some other, more novel concept. Even the design and creation of such a vehicle could be divided into a single, overarching SMART goal supported by a number of SMART milestones. Whatever your vision, SMART goals allow you to break out its components and then plan and measure your progress. It’s a useful tool for everyone from high school students to the President of the United States.

What Are SMART Goals?

SMART is an easy-to-remember acronym that stands for:

• Specific
• Measurable
• Achievable (Attainable)
• Relevant
• Timely (Time-bound)

Its origins are murky, but it’s played a starring role in plenty of boardrooms and meetings. It’s taught in classes and recommended by HR and management teams alike.

S: Specific

“Increase revenue” is a generic goal which is pretty common across the board, as are “reduce costs” and “innovate”. In order to be considered a SMART goal, though, these ideas need to be more specific. For example, “Increase revenue by 5%”, while not completely SMART, is moving in the right direction by virtue of its specificity.

M: Measurable

In order to determine your success with respect to particular goals, they must be measurable. While increasing revenue is a measurable goal, it’s even SMARTer to track the increase over a specific period. Are we increasing revenue over the last year, the last month, or the last week? For the sake of our example, let’s say that we’re focusing on increasing revenue by 5% over the last month.

A: Achievable (also Attainable or Action-Oriented)

To determine whether our goal to increase revenue is achievable, we may want to examine traffic and conversion patterns for our online or brick-and-mortar shop to determine how many units of our product were sold in the last month. How much must we increase our sales to increase our revenue (remember the 5% goal?) and how will we achieve that increase? Will there be a PPC campaign or a coupon? How will we make our goal achievable?

While having a SMART goal sets the task of creating an achievable milestone, it isn’t necessarily easy to do. Putting an astronaut on the moon in a specified amount of time (“…before the decade was out…”) was an achievable goal. Though not everyone thought so at the time, thanks to intelligent and creative individuals who met the technical challenges, it was achieved. Don’t let precedent dictate your limits. These are your goals. In fact, goals that are more difficult to achieve (that others may view as unrealistic) are likely to be the ones with greater potential upsides. To make those goals achievable, be ready to learn and do more – more than you thought necessary, more than you thought possible, and more than your competitors are able or willing to do.

R: Realistic (also Relevant)

Similarly, “realistic” is a very subjective term. So long as you aren’t trying to fight the laws of physics or change customer opinion in a single day, there’s likely a realistic way to achieve your goal given enough time, effort, and research.

In our example, it’s entirely realistic to believe that we can increase revenue by focusing on increasing traffic and promoting our product more heavily.

T: Timely (also Time-Bound)

When do you expect to complete this goal? Depending on the degree of ambition inherent in your goal, it might be next week, next month, next year, or even 5-10 years in the future. While the scope of your goal certainly affects the length of time it will take to implement, it’s a necessary metric for measuring success.

With respect to our goal of increasing revenue, we’ll be working to do so by 5% over the previous month. We’ll focus on accomplishing this increase within the current month by boosting our traffic and visibility via PPC campaigns and coupons. At month’s end, we’ll readily see whether we were successful – though we don’t really have to wait that long. By dividing our goal into even smaller segments, we can determine whether we’re on track with sales on a daily and/or weekly basis and adjust our strategy as necessary.

SMART goals needn’t be rigid or small. They can be as flexible as you are and should grow with your business and desires.

SMART Goal Alternatives

If you aren’t a fan of SMART goals – which some people just aren’t – I’ve come across a few alternatives that have been created by entrepreneurs and educators as a response to SMART goals. While they attempt to differentiate themselves, they still maintain some similar components. Regardless, what’s most important is that you select a goal style that works with your brand and meets your needs.

HARD Goals

HARD goals were introduced by Mark Murphy, Founder of Leadership IQ, in his book Hard Goals: The Secret to Getting From Where You Are to Where You Want to Be (2010).

HARD stands for:

• Heartfelt
• Animated
• Required
• Difficult

Murphy argues that in order to achieve your goals, you must be passionate about them (heartfelt and animated), feel that achieving them is necessary (required), and make them sufficiently difficult that you feel a sense of achievement once you’ve completed them.

While these are useful points for goal making, unlike SMART goals, they don’t provide a timeline or a measurable outcome beyond success or failure.

CLEAR Goals

Adam Kreek, Olympic gold-medal rower and entrepreneur, introduced the world to CLEAR goals. This type of goal is meant to be more agile.

CLEAR stands for:

• Collaborative
• Limited
• Emotional
• Appreciable
• Refineable

Kreek believes that goals should be set to encourage collaboration and that they should be limited in scope, as well as in how long they’ll take to achieve. The emotional component of CLEAR goals relates to sparking passion and emotional connection with the goal. Additionally, large goals should be broken into smaller components that, when completed, comprise the large goal, making them appreciable. Plus, any CLEAR goal should be refineable with new information. After all, we aren’t working in a vacuum. In this Inc. article, Peter Economy explains why he prefers CLEAR goals to SMART goals.

QUEST, FABRIC, and PRAGMATIC

In his 2003 paper entitled “S.M.A.R.T., Q.U.E.S.T. and F.A.B.R.I.C: Are They More Than Just Acronyms?”, Paul Williams covers three goal-related acronyms and introduces another, PRAGMATIC. In addition to discussing SMART goals, he touches upon QUEST and FABRIC goals. Unfortunately, there isn’t too much information available on the latter, but some of the components may be useful for individuals in the financial (QUEST) or public (FABRIC) sectors.

QUEST stands for:

• Quantitative, Quantifiable
• Usable
• Economic sensitive/Capable
• Specific
• Timely

According to Williams, QUEST arose from the financial sector and therefore focuses on measurement (usually in terms of dollars) or results. QUEST implies a journey from one point to another, a goal that moves the company from one state of being (or progress) to another.

FABRIC stands for:

• Focused
• Appropriate
• Balanced
• Robust
• Integrated
• Cost-effective

As you can see, some of the words used here are essentially synonyms for components of SMART goals. The main difference, according to Williams, is the integrative aspect. FABRIC goals aim to highlight the goals’ interconnected nature. Williams specifically mentions law enforcement and that police goals are really part of the greater criminal justice system. Likewise, in a business environment, one department’s goals may be integrated throughout the company.

PRAGMATIC stands for:

• Proximate
• Relevant, reliable, reportable
• Achievable
• Game-proof
• Measurable
• Appropriate
• Timely
• Integrated
• Cost-effective

PRAGMATIC goals were introduced by Williams in his 2003 paper and were created as a means of enabling the criminal justice system to set appropriate, measurable goals. It uses different components of SMART, QUEST, and FABRIC. He doesn’t provide much information in his paper with respect to its methodology, though it’s essentially an integration of synonyms for the other goal making processes.

Though initially created for the criminal justice system, by nature of its focus on relevant, achievable, and cost-effective proximate goals, PRAGMATIC goals could definitely be applied in the entrepreneurial arena. It’s unfortunate that more has not yet been written about this goal model.

Which is the Right Goal Acronym?

The right acronym is the one that works best for you. It’s the one that you can easily remember and which helps you to shape achievable goals. No acronym will select the right goals or methods of measurement for you. They can only serve as a general outline to help you think about goal setting and to provide a framework to help ensure that you consider the various aspects of goal creation.

Each entrepreneur should absorb and apply the best parts of each method to help successfully plan their endeavors. After all, the only useful goal making technique is the one that you’ll actually use.

References:
Williams, Paul (2003, March). S.M.A.R.T., Q.U.E.S.T., and F.A.B.R.I.C: Are They More Than Just Acronyms? Paper presented at the Evaluation in Crime and Justice: Trends and Methods Conference convened by the Australian Institute of Criminology in conjunction with the Australian Bureau of Statistics and held in Canberra, Australia.

About the Author

Dr. Joe Johnson is an entrepreneur, investor, and startup expert. He is the founder and principal of GoodField Investments and the GoodField Foundation (www.GoodField.com).

Joe has a Ph.D. in Entrepreneurial Leadership and an MBA. He is the author of the upcoming book on The Science of Why Most Entrepreneurs Fail and Some Succeed.

Most importantly, he is the incredibly blessed husband of one amazing wife and father of six wonderful children. He resides in Bradenton, Florida. For more information on Dr. Johnson and his work, go to www.JoeJohnson.com.