In recent months, one of the most common questions I've been asked by my clients is "How can we set attainable goals in this 'down' economy?" The truth is I don't think the economic cycle makes any difference in setting realistic goals as the core principles remain the same:
1. Hire people who have a track record in achieving their goals
It may seem inappropriate - or downright weird - to be talking about hiring in the current climate. But you've hired before, and you'll hire again. Through seven recessions, I've seen organizations again and again miss the single biggest opportunity inherent in any downturn - the opportunity to rebuild your team stronger than it ever was before.
Keep your hiring processes in place, and well honed. When you do start hiring again, don't just take the "first live pulse" that comes along, or settle for the "least worst" candidate - instead, commit to using the opportunity to raise the average competency level of your team. (Savvy managers know to start re-hiring just ahead of an economic recovery, when there is a good pool of candidates and less competition.)
Perennial under-achievers don't change - as you start rebuilding, hire people you can trust will always give their best and who have a demonstrable track record of consistent goal achievement.
2. Set goals early, then revise the goals regularly in the light of hard data on actual performance
Sales goals should be reviewed monthly and reviewed (up or down) in the light of whatever new information you have.
The (very common) alternative of setting goals as a fixed line in the sand, then "turning up the volume" in an attempt to bully your sales people to deliver those goals, is a road to nowhere. Stubborn refusal to revise goals in the face of reality - worse, a belief that revising goals is weakness, is simply airheaded. (See recent developments in the financial markets for examples.)
This works both ways of course - your goals should be reviewed at least monthly, and you should be keeping a rolling 90-forecast which should always be reviewed and reviewed in the light of the previous 30 days performance. You do it with your inventory, with your purchasing, with your labor cost, with just about everything else - you change and flex according to the needs of the real world. Why not do it with your forecasts?
3. Use data for 70% of the goal-setting process, intuition/judgement for the remaining 30%
You need data more than you think. You grew your business in the early days based on your intuition and past experience, but now, your business is more complicated. If you genuinely want Predictable Success, you need data. Not lots of it - just enough.
Learn what your industry trends are, poll colleagues and peers for their experiences. Ask your managers and your team members for their input. Goal-setting done in a vacuum - with just you, a spreadsheet and a magic eight-ball isn't going to cut it this year (or any year - but you'll feel way dumber doing it this year).
Conversely - and particularly in a down economy - your team members need access to your judgment more than you think. That's what you're there for - to use your expertise and experience not to make every decision yourself, but to help your managers or team members bring some sense to that data and reach attainable conclusions. That's why you get the big bucks.
4. Build goals from the bottom up, not the top down
Your people on the front line know more than anyone else what is achievable. If they don't, or if you think you can't trust them, or that they'll sandbag you, then you're doing a lousy job of hiring (see point 1)
If you do go to the trouble of hiring good people, then why not trust them to build their own goals? It has the advantage not only of producing goals based on a more detailed knowledge of facts and market realities (believe me, as your organization grows, the quality of information that gets to the corner office rapidly declines), it also build the "forecasting muscle" in the organization - over time, good forecasting will become a part of your organizational DNA.