Thoughts on Growth and Its Causes
Part 2 – Aiming High
Publicly traded companies often face the wrath of Wall Street analysts for two things – aiming too high and falling short, or not aiming high enough. The analysts’ disappointment leads to lower stock value, and this, in turn, leads to reactionary actions focused on short-term results, based on the common misconception that shareholders are owners who have the right to have their needs prioritized above that of other constituents.
Pendant Automation, free from the scrutiny of Wall Street, believes in aiming high. What does that mean and why do we believe in it?
Aiming high starts with a vision of the future that is very different from the current situation. The vision can be long-term, with an imagined set of milestones along the way. For example, in 2012, Pendant’s founder, Rob Ward, decided he wanted to substantially grow his business and created a plan to make it happen. Rob’s vision included the kinds of projects Pendant would do, the kinds of clients Pendant would attract, and the kinds of people Pendant would hire. In all cases, Rob aimed high. By the end of 2018, Pendant sales will be about ten times what they were in 2012.
There are risks in aiming too high. Some people may think the target is impossible. Missing a goal discourages some people. Some people do not believe in setting targets at all.
Setting the Target
“Can we really pull this off?”
That’s the question we were asking ourselves during the creation of our 2018 budget. We had built the financial part of the budget on a client by client basis, estimating the projects we would do with our list of clients and potential new clients. We decided we could pull it off. And guess what? Halfway through 2018, we were wrong about our list.
But for new project bookings, we’re running well ahead of the rate required to beat our target, and we are set up for an outstanding 2018. It turns out that the mindest you cultivate by aiming high leads to actions that succeed, even if you can’t predict exactly how it will all turn out. You still get to the goal.
Pendant creates a budget prior to the beginning of each new year. That’s not novel or unique. We think of the budget as the story of our business, written in words and numbers. That story is created by and shared with the entire team.
What may be a little different is that we are very open about our intent to budget aggressively and aim high, recognizing that there is a significant probability that we will fall short of the goal. We also recognize and relish the possibility that we will meet or exceed the target.
The Value of Aiming High.
What’s the point?
- The team clearly understands the gaps between where we are and where we want to be. Each team member knows what he or she has to do to hold up their end.
- The process can make the impossible seem possible, even probable.
- The team prepares for the growth and is ready when it comes.
- The company prepares for the growth by investing in the required resources. This becomes especially important with regards to being able to live up to promises made to clients.
- Falling short of a high target can still leave you way ahead of where you were.
- Everyone is challenged to learn and grow personally.
- It’s way more fun to hit a high target than a low one. It’s also more fun to just miss hitting a stretch target than to barely exceed an easy one.
- Achieving high goals breeds confidence and builds momentum.
We will sit down late this year to talk about 2019. We’ll probably ask ourselves the same question. “Can we really pull this off?” And then the conversation will shift from “if” to “how” we can pull it off. We’ll be wrong about how it will play out. But we’ll have a lot of fun doing it.
Maybe you’ll find yourself part of that conversation…