Balancing Ambitious Goals and Building Trust with the TAG Principle
Setting ambitious long-term goals can be exhilarating. It fuels our drive to tackle significant challenges and provides the motivation needed to overcome challenging obstacles along the way. However, there's a delicate balance to strike. If all your goals are overly ambitious and consistently unattainable, it can erode trust within your team, among shareholders, and even within yourself.
When it comes to long-term goals, I often find myself leaning towards setting a highly audacious goal but supporting it with ambitious yet achievable short-term milestones.
Building Trust through Short-Term Goals
John Doerr is well known for introducing OKRs to Google. The OKR method in goal-setting advocates for setting the threshold of OKR (Objectives and Key Results) completion at a level where achieving 70% of the OKRs is considered excellent. This philosophy is based on the belief that if a team consistently achieves 100% of their OKRs, it may indicate a tendency to set goals that are not sufficiently challenging or visionary. Note that to avoid misalignment, OKRs are typically disconnected to individual or team performance reviews.
Setting the right threshold of attainment for OKRs can vary depending on the context and what’s going on in the company. The Threshold Attainment of Goal (TAG) principle is a structured framework designed to align business objectives with different operational modes: growth, business as usual, and turnaround.
TAG Thresholds
TAG in Turnaround Mode (90% Threshold) - This mode is geared towards businesses in need of significant restructuring or improvement. The objective here is to prioritise immediate, critical changes with a high probability of success. The 90% threshold is set higher here as the tasks are crucial for survival and generally more attainable in the short term.
TAG in Sustainable Growth - Business as Usual Mode (80% Threshold) - When a business operates under stable conditions and is growing well, TAG sets a goal achievement target of around 80%. This fosters consistent progress and sustainable growth without overstretching resources.
TAG in High Growth Mode (70% Threshold, sometimes <70%) - In scenarios of rapid expansion, the TAG framework encourages ambitious and innovative strategies. Attaining approximately 70% of these challenging goals is deemed a success, recognising the higher risks and opportunities in evolving markets.
The TAG principle is useful around setting expectations, particularly between CEOs, leadership teams, and boards or shareholders about what mode the company is in and the level of ambition and confidence for the current targets.
More Resources
To further explore the concepts discussed and their practical applications, consider these recommended readings:
High Growth Handbook by Elad Gil
Measure what matters by John Doerr
Scaling People: Tactics for Management and Company Building by Claire Hughes Johnson