7 Essential Rules For Setting Business Goals

Most CEOs obsess over product, sales, and fundraising, but miss what actually moves the organization forward: disciplined goal setting.

I’ve watched hundreds of companies spin their wheels for years, not because they lacked talent or capital, but because they couldn’t align their team around key priorities. They confuse motion with progress.

But when I ask CEOs about business goals, they panic. Most have tried and failed. The goal setting process created more work than it alleviated. More chaos than order.

This happened to me too. I made more mistakes than I can count building my company from $0 to $100M+. But I eventually figured it out. I learned these 7 rules for business goal setting and my company took off.

What are business goals?

Business goals are the short list of critical priorities your entire company commits to achieving in a specific timeframe. Usually a year.

They’re not a task list. Not everything you’ll work on. Business goals should be your top 3-5 strategic priorities for the year. Non-negotiables that, if achieved, will fundamentally move your business forward.

Real business goals force brutal prioritization. If everything is a priority, nothing is. Business goals help answer: “What are the top things we want to accomplish this year as an organization?”. The answer connects your long-term vision to your daily execution.

Why set business goals?

Simple: organizational alignment. As the legendary business author, Jim Collins, once said:

“Great performance is 1% vision and 99% alignment.”

Alignment is that important for every team. Unfortunately, most CEOs, founders, and leaders lack the discipline to properly align their team. Most organizations have too many goals (or none at all), which leads to everyone rowing in different directions. This is the least efficient way to grow a company.

If you want to drive business results, take goal setting seriously. Everything matters: from the framework, to how you track progress, to how you align incentives across the team. 

This article distills 20 years of my experience with goal setting into a simple set of rules you can use within your own organization. It doesn’t matter if you’re using OKRs, EOS Rocks or WhyGos. These 7 rules will make your goal system stronger.

Common Business Goal Systems

If you’re already setting business goals for your organization, you’re ahead of the pack. Any goal system beats no system. The most common business goal systems are:

• Objectives & Key Results (OKRs): created by Andy Grove in the 70’s at Intel (later popularized by Google in the early 2000’s).
  
• SMART Goals: created by George Doran in the early 80’s to improve Management by Objectives
  
• Rocks: created by Stephen Covey in his 1989 book The 7 Habits of Highly Effective People. Later used by Gino Wickman in his 2008 book Traction: Get a Grip on Your Business. 

I used all three extensively over 20 years leading teams. Each time we hit a wall (which happened frequently), we made improvements to the underlying system. Eventually a new system emerged we called WhyGos (why, goal, outcome). It’s now used by hundreds of companies through Highland Academy.

The 7 rules in this article capture every improvement we made so you can apply them to whatever goal system your company uses.

Aligning Vision & Business Goals

Before diving into the 7 rules, let’s clarify how vision, strategy and goals connect. Vision is where you’re headed long-term (3, 5, 10, 20 years). Strategy is your unique approach to get there. Annual goals are the top priorities that execute your strategy.

They must ladder up: Goals → Strategy → Vision.

If your goals don’t support your strategy, or your strategy doesn’t drive toward your vision, something’s broken. Fix the misalignment or your team will drift further from your company’s vision.

I use the Vision Ladder to map my 3, 5, 10, and 20-year vision on one slide. You can get the template from this free article. 

The 7 Rules of Business Goal Setting 

These rules fix the most common failures I’ve seen across hundreds of companies. It’s not theory. Each rule was battle-tested to fix real problems that kill organizational alignment.

Apply them to any goal framework you’re using. Or, use the Highland WhyGos. Your success rate will dramatically improve either way.

Here we go…

Rule 1. Focus (then focus again)

Simplicity scales.

Business goals represent your company’s top priorities. Not everything you’ll do throughout the year. They’re not a task or project list. They focus the organization around your top priorities. That’s it.

One of the biggest mistakes I made early on was setting too many goals. I quickly learned the more goals you set, the less focused your team will be. 

Think of it this way: if a 20-person company has 10 annual goals, and each person creates 10 individual goals, that’s 200 individual goals and at least 600 metrics across a small team!

That’s why I set a hard rule: no more than three goals per year. This applies at the company-level company, functional team level, and to each individual.

Each goal should be short, specific, and crystal clear. Just a couple words works perfectly. Here’s a real example from my past company:

“Successful launch into the enterprise.”

This hits all the right notes: short, specific, and crystal clear. I favor keeping the goal clean of numbers. As you’ll see in rule #3, we attach metrics underneath the goal to define what success looks like.

Rule 2. Always Be Measurable

“If you can’t measure it, you can’t improve it.”

After writing your three (or less) company goals, it’s time to define what success looks like. For each goal, pick 3 (or less) metrics underneath. Like this:

Goal: Successful launch into the enterprise.

• metric 1 
• metric 2 
• metric 3

Each metric should focus on outcomes, not tasks. On what success looks like (the “what”), not every task you’ll accomplish along the way (the “how”). In my example, each metric defines what a “successful launch” means. Like this: 

Goal: Successful launch into the enterprise.

• 10+ new enterprise customers
• $1M+ in new annual recurring revenue (ARR)
• Enterprise NPS score of 70+

Notice these metrics are outcome-based, not project-based. A project-based metric would be, “Update the enterprise sales deck”. This may seem harmless, but it embeds an assumption that a successful launch MEANS refreshing the sales deck. This is the “how,” not the “what”.

Avoid project-based metrics at the company-level. However, at the team or individual level, you can mix numerical and project-based metrics. For example, an individual on the sales enablement team might have the following goals and supporting metrics:

Goal: Update enterprise sales deck

• Final draft done by end of Q1
• Sales team fully trained by end of Q2
• Enterprise sales win rate exceeds 30%

These are less outcome-based, but still define what success looks like, and can be measured with certainty.

Rule 3. Challenging But Realistic 

Business goals should be hard, but not unrealistic within a 12-month period.

Ambition can get in the way of progress. We all want our businesses to thrive, but nothing is more demotivating than being set up to fail.

That doesn’t mean sandbagging (making your goals super easy to hit). Goals should still push you outside your comfort zone. 

When the CEO creates goals for the year, the Board of Directors (if they have one) should sign off. This helps calibrate difficulty. Similarly, when teams create goals, the CEO must sign off. When individuals create goals, their manager must sign off.

I call this the “handshake” – mutual agreement that the goals are aligned and challenging enough.

Rule 4. Never forget your ‘Why’

My team always asked me: why is this goal a priority?

This is a critical question that most goal frameworks don’t answer. The ‘why’ brings out the strategy behind the goal and provides business context to everyone that wasn’t involved in the initial decision.

Without a clear ‘why,’ you’ll leave your team guessing. The lack of context will de-motivate your leaders. They’ll think, “Why work my ass off when I don’t even know why we are doing this.” 

So, I learned to include the ‘why’ with every goal that we set. No more than a 1-2 sentence explanation of why you chose the goal in the first place. Like this: 

Goal: Successful launch into the enterprise.

Why: We identified moving up market as a core bet in our 3-year strategy. We’ve already gotten organic interest and the economics are better. Enterprise customers provide 10x the LTV (vs. SMB). It’s time to officially launch in a big way.

Outcomes:

• 10+ new enterprise customers
• $1M+ in new annual recurring revenue (ARR)
• Enterprise NPS score of 50+

Short & clear goal, a strong ‘why’ and measurable outcomes. Anyone reading this will immediately understand the company’s priority, its rationale and how it defines success.

Rule 5. Consistently Track Progress

Tracking progress against your business goals throughout the year is critical. This sounds simple, but most leaders don’t do it well.

First, I break the annual outcomes into quarterly and monthly targets. Then, I create a simple company dashboard using Google Sheets to track progress over the course of the year. 

I use a simple red, yellow, and green light approach to quickly see where we stand. Update this weekly so you and your team can take action when the goal or outcome is yellow or red. My grading system looks like this: 

🟢 = On pace (pacing to 100% achievement or above)
🟡 = Slightly behind (pacing to 80-100% achievement)
🔴 = Behind pace (pacing to under 80% achievement)

Update your status honestly. Sugar coating your ratings only hurts you. The company should adopt the internal mantra “Get to Green” — bring forward issues early, and work together to get every yellow or red goal back to green. This is how you stay proactive, not reactive.

Your company dashboard must stay updated. I’m very strict on this. An outdated dashboard means outdated information, and outdated information means your team is operating at a disadvantage. Never let this happen.

Rule 6. Create Accountability Checkpoints

You must get the team together to discuss progress, raise any issues and remove blockers as a team. I call this a recurring checkpoint, meant to keep your team accountable throughout the year.

My checkpoint: a recurring Leadership Team Meeting. I use the same structure every time, with progress against goals at the center of the agenda. We bring up every yellow and red goal, prioritize the most important ones, then dive in to get them back to green.

The leadership team meeting is also where you check progress against team-level goals (marketing goals, product goals, etc.). If you use cascading goals at your company, the top functional leaders attend, so it’s easy for them to report progress, and unblock any stuck goals.

The company and team dashboards must be updated before each leadership team meeting. The CEO owns the company dashboard (with help from finance, ops or chief of staff). Then each functional leader owns their own team dashboard.

I just did a Masterclass on leadership team meetings for my Highland community - if you're a founder or CEO and want access to this Masterclass, the accompanying presentation, and the training guide (with agenda), reach out to us here. 

Rule 7. Align Team Incentives

One of my biggest pet peeves about OKRs is the die-hard belief that goals shouldn’t be tied compensation. Here’s the argument: it’ll cause people to sandbag, to hold back. But if you have proper checks and balances in place (see rule #3), this won’t happen. 

Aligning financial incentives to goals is one of the most powerful tools you have as a leader. It’s a mistake to tie compensation to anything else! 

I recommend creating a company-wide bonus program that gives each person a bonus for:

1. The company achieving its goals (50% of bonus)
2. The individual achieving her goals (50% of bonus)

Don’t lie to yourself. Money motivates. This simple structure will keep people dialed in all year long. Layer in rules #1-6, and you’ll have the most aligned team you’ve ever seen. 

The company bonus plan is our most popular Highland Masterclass. For a limited time, we made this one available to anyone (not just members). You’ll get access to a 1-hour masterclass, step-by-step guide, implementation plan, bonus plan calculator, and more. Try the Highland Bonus plan right NOW.

Most companies fail at goal setting because they overcomplicate it. They create elaborate frameworks with 20 goals, 60 metrics, and no accountability.

Don’t be that leader.

These 7 rules create a powerful formula that works every time. Set clear and measurable business goals. Make them challenging but realistic. Never forget your ‘why’. Track them religiously. Keep accountability high. And reward people for achieving them.

Keep it simple, and success will follow.

How I can help you… 

Are you a founder, executive, or manager? I’d love to support your professional growth. 

Here are three ways: 

1. Connect on LinkedIn and Instagram – where I post practical tips about leadership and startups every day.

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