How to approach goal setting
Why the "70%" rule is over used and how you can set smarter targets
Howdy y’all, welcome back to another rendition of Rough Terrain. Today’s article is a continuation of my thoughts on how to set effective goals for your organization. Please comment with your thoughts and share it with anyone you think could use the advice!
Rapid Fire
I guess I was on to something in my article bemoaning the failure of most wealth portfolios to properly capture all the new assets a modern investor can use. Apparently I’m not alone and there are new companies who recognize that the Cambrian explosion of new types of securities also calls for new tools for the retail investor. I was pointed to a new company, Compound, that pulls in all my public assets but also links to crypto, real estate, and private assets, giving me a far more holistic view of my portfolio. They offer a bunch of wealth management services that I’ve yet to check out but look interesting.
It’s always the big things that get celebrated when it comes to women serving in the military (first female Ranger School graduate, first female commander of whatever) but it’s the smaller things like this that really help normalize a just military
This article by Brie Wolfson blows my article about better business writing out of the water. It’s a love letter to the culture of writing that helps Stripe and Amazon be the titans of industry they are. My article was tactical - how to make your writing more effective. Brie’s work is all about the why behind writing and how it’s a superpower to those companies that do it well.
Speaking of writing well:
Recently, I’ve been feeling low on energy at work, which is why I started booking some Fridays off in-advance. Remember folks - you don’t need an explicit reason to take time off. And you need to take time off BEFORE you realize you need to take time off. So go now (like RIGHT NOW) and block off some days over the coming months as a forcing function to relax a bit. Inspired by:
Did you block time off from work? No? Go back to the previous bullet point. Otherwise, proceed.
Ending on a lighter note, may I introduce Combat Juggling:
How to Set Better Goals
In my last article, I talked about how all goals aren’t created equal. I use the 3 types of goals that Marty Cagan identifies (Moonshot, Rooftshot, High Integrity Commitment aka HIC) as my framework for bucketing goals. As a quick refresher, the differences between the three types are:
Moonshots are high reward goals with a lower likelihood of success because they are either crazy aggressive or experimental. It’s that old saying of “shoot for the moon, because even if you fall short, you’ll be amongst the stars”.
Roofshoots are the most common types of goals. Tough-but-doable, they are the goals most teams work on, advancing the organization to reach new heights.
HICs are cannot-miss goals with little margin for error. Typically reserved for compliance, financial, and other domains were there are serious consequences for not being dialed tight.
Whether you accept this framework of three types or use a different one, the key takeaway point is that are more than type. Therefore, there needs to be more than one type of goal setting process. You wouldn’t set a goal for a Moonshot the same way you would for a HIC.
Which then begs the question, “what’s the right target to set for those goals?”
Note - I use the word target to indicate the desired endstate of a goal.
The most common advice thrown around the interwebz is the 70% rule. This rule (more a heuristic) states that getting to 70% of a goal’s target is the sweet spot. This is because if the goal is set to an appropriately aggressive, getting to 70% of that target is a good result. You go much higher than 70% and you probably set too easy of a target. Too low and you set too hard a target. Simple enough rule to understand, gives everyone an easy way way to grokk how they should set their goals.
This is, to use a highly technical term, bullshit.
Look, I get it. Goal setting can get complex. People are busy and companies need to scale guidance so the goal setting process doesn’t get bogged down. So you tell everyone to try and hit around 70% because that’s a good enough heuristic for most goals.
The key word here is most.
Remember above how I said most goals are Roofshots? Those tough-but-doable goals that make up the majority of your organization’s goals? The 70% rule works well enough for those types. We’ll come back to these types of goals in a bit.
But for those other two types, Moonshots and HIC, the 70% rule ain’t gunna work, no sir.
For Moonshots, 70% is wayyyyyy too optimistic. Some moonshots may never even launch, let alone deliver results. Chance of success is low, but that’s okay. We’re doing the Moonshot because it’s inspirational. Or if it works out, it will be revolutionary. Or because we want to encourage a culture of experimentation. Goaling a Moonshot shouldn’t be about trying to measure a business outcome but rather assessing the potential for future outcomes.
Gimli is a Moonshot kind of guy
Think about how many rockets failed before the first one that successfully delivered an astronaut to space. If we only considered the success of each individual rocket, it would look like a long list of goals that were not met. Getting 70% of the way to space ain’t going to cut it. But if you pan out, it’s a different story. It’s a series of tactical failures whose learnings influenced the ultimate success of later launches. That’s how Moonshots stack and help organizations drive radical advancement.
If you have a Moonshot-like goal, my advice for setting a target is to decouple it from any sort of business impact or outcome. Promise nothing and set expectations that it’s primarily about learning. The goal should be something like “conduct 17 tests” or something like that. 17 tests could be 17 failures or 17 successes, who knows? The point here is the framing of a Moonshot goal’s target as intentionally divorced from anything beyond learning.
Granted, you could slip the 70% rule back in there if you really wanted to. If you end up conducting 12 experiments against of target of 17, is that good? Who knows, totally depends on the context. It may be more than enough or not nearly enough. That’s the agony and beauty of Moonshots. Adhering to the 70% rule seems unnecessary in this sort of situation.
HICs are the other side of the spectrum. We don’t mess around with those. By definition, the target for a HIC should be at 90% or above and may be highly precise like 99.99%. Imagine being in charge of maintaining a hospital’s server infrastructure. You going to set a goal of 70% uptime? You're going to find yourself a new job if you do, I’ll tell ya what.
Back to those Roofshots that should make up most of your organization’s goals. For these, the 70% rules works fine, imo. Yes, I know I just called it bullshit, thank you. It’s okay to maintain conflicting opinions in one’s mind at the same time.
But seriously, because Roofshots are “tough-but-doable” by nature, arriving at 70% to the target fits. Sure, some will only reach 50% will others get to 100%, but in aggregate, if all your Roofshots average out to around 70%, that’s great. You’re setting aggressive goals that push the team to deliver excellence, which means that falling a bit short is still pretty good.
Something to Watch Out For
A nasty little habit I notice is the shifting of the goal line so that 70% becomes the new 100%. This is typically the result of psychological issues that folks have from previous managers who tied their performance against goals with compensation or reviews. When you’ve been conditioned that not reaching your goals results in punishment, what are you naturally going to do? You’ll make sure you always hit your goals. You’ll set your goals in a way that makes it seem like you’re going along with the 70% rule but you’re for sure going to reach that 70%.
It’s a fake 70%. Which is a betrayal of the original intent of the 70% rule. You’re supposed to set a goal that is aggressive enough that failing to get the last 30% is considered GOOD. But if you’ve got people who simply cannot tolerate NOT getting to 100% because they are traumatized from previous managers, they will set their goals so they will for sure reach the fake version of 70%. This is a toxic behavior that you must stop.
Healthy organizations are based on cultures where failure is accepted because it’s a valuable learning experiences and leads to better future efforts. And it tells employees they won’t get punished for failing to hit goals. If you’ve got people hedging their bets with fake 70% goals, you need to help them get over the mental blockers they have, which are likely the result of previous managers you DID punish them for failing to reach goals.
And if you have managers who are teaching people to act like this in your organization, you have to stomp that out ASAP. Correct the manager quickly and do not tolerate regression. Exit those who are unable to let go of this kind of goaling, as they are doing significant damage to your employees.
What kind of distribution across the 3 types should an organization have?
Ballpark answer here. I’d say 80% Roofshot, 10% HIC, 10% Moonshot. That’s if you have the type of organization that isn’t inherently weighted towards one type of goal. But some organizations may have to accept more Moonshots or HICs because of what they are responsible for.
If you’re in Site Reliability or InfoSec, you may have more than 10% of goals be HICs.
If you’re in Data Science or brand new org with an unestablished business goal, you may have more Moonshots.
But for most of us, we have to keep the lights on (HIC), make some experiments (Moonshots), but largely keep driving the business we’re responsible for forward (Roofshots).
Good luck with goal setting, and let me know what you think of the article!