In May 1961, President Kennedy told Congress the United States should commit itself, before the decade was out, to landing a man on the Moon and returning him safely to the Earth. The technology to do it did not exist. That was deliberate.
Most business goals fail the opposite way round. They are achievable with the current method, which means they change nothing, and they are vague enough that nobody could ever prove they were missed. A moon goal is specific, verifiable, dated and beyond what you know how to do today.
What makes a goal a moon goal?
It needs all four of these.
- Specific — everybody pictures the same thing when they hear it.
- Verifiable — on the day, you either did it or you did not, and no amount of narrative changes the answer.
- Dated — a real date, written down, that other people know.
- Beyond the current method — you cannot get there by doing more of what you do now.
Then there is the clause almost everybody drops: and returning him safely to the Earth. Kennedy did not set a goal of reaching the Moon. He set a goal of reaching it without killing the crew, which is a materially harder problem and rules out a whole category of solutions that would otherwise have looked efficient.
Your version of that clause is the constraint that stops you hitting the number in a way that wrecks something you care about. Ten million in revenue is not a moon goal. Ten million with the margin intact, the founding team still here and you not in the building five days a week is a moon goal, because it closes off the shortcuts.
Why does an owner need one?
A moon goal makes hundreds of small decisions obvious, and those decisions are where the year is spent.
Without a destination, every opportunity looks roughly as attractive as every other one. A profitable job that pulls you into a market you do not want to be in scores the same as a job that builds the thing you are trying to build. So you take both, and three years later you have a busy business with no shape to it and no story a buyer would pay for.
With a destination, most opportunities answer themselves quickly, including for people who are not in the room with you.
It is also the only honest way to size the gap. Owners who have never fixed a destination tend to describe the business as roughly on track. Put a number and a date on the wall and the gap becomes arithmetic.
A worked example
The figures are illustrative. A manufacturer turns over £4.2m at about seven per cent net, so roughly £294,000, and the owner works fifty-five hour weeks and signs off every quote.
The moon goal, written with a real date on the wall — call it year five here: £10m of revenue at twelve per cent net, with the business running four days a week without me. That is roughly nineteen per cent compound growth for five years, and twelve per cent of £10m is £1.2m — four times today’s profit.
Now back-cast it. To be at £10m in year five you need to be near £6m by the end of year three. Six million does not come out of one shift on the current plant, so the second shift or the second site is a decision made in year one, not discovered in year four. Twelve per cent net at that scale needs gross margin somewhere near thirty-eight per cent against today’s thirty-two, which means the pricing work starts now. And “without me” means an operations director hired and properly bedded in by the middle of year three — which means recruiting in year two, which means affording it in year two.
In March, a £180,000 one-off contract appears at eighteen per cent gross margin that would occupy the main line for five months. Without the moon goal it is a good month. With it, it is an obvious no: it consumes the capacity you need for margin work, teaches the team that low-margin volume is welcome, and moves you no closer to anything.
A destination makes attractive, profitable, off-strategy work easy to turn down.
How to set one this week
- Pick the date first. Far enough out that the current method cannot deliver it, close enough that you will personally still be running the business. Three to five years is usually the range.
- Write it in one sentence with a number and a date. If it needs a paragraph, it is a strategy document, not a destination. If it has no number, nobody will ever know whether you arrived.
- Add your “returning him safely” clause. The condition that rules out winning ugly: margin, the team, your health, the ownership — whatever you are not prepared to spend.
- Back-cast to three checkpoints. Where the business must be at year one, at the midpoint and at the finish. They prove the arithmetic works.
- Name the thing that has to be true and is not. A capability, a person, a system, a market. Usually there are two or three. Those are your projects; everything else is maintenance.
- Say it out loud every month. It only filters decisions if the team can repeat it without looking it up.
Common mistakes
They set a big round number and think the job is done. A number with no constraint attached invites the fastest route, which is nearly always the one that damages the business: buy revenue, discount hard, hire in a panic, take on clients you will resent.
The second mistake is the private moon goal. The owner has one, has had it for years, and has never said it out loud to the people who would have to build it — then is quietly disappointed that nobody is pulling in that direction. Nobody is pulling in that direction because nobody knows what it is.
The third is picking a destination that is somebody else’s. Ten million because ten million sounds like a proper business. If the goal does not survive the question “and what would that change about your life?”, it will not survive year two either.
Questions to ask yourself
- Out of 10, how clearly could your senior people state where this business is trying to get to, and by when?
- What is the constraint you are not prepared to breach on the way there? Have you ever said it out loud?
- Which of last year’s decisions would you have made differently if the destination had been fixed in January?
- If you arrived exactly where you say you want to be, what would be different about a Tuesday in your life?
This is the starting point of strategy, and it is where Business Coaching begins.