52 Weeks of FOS

Step #3: Define Metrics and Targets (Your WHERE) – Week #6 of The Financial Operating System®

Step #3: Define Metrics and Targets for Business Success.
March 17, 2025 by Calvin Wilder in Articles

The first 2 steps of The Financial Operating System focused on clarifying your financial objectives and your current financial performance. This next step #3 focuses on establishing specific financial metrics and targets to guide your business toward its longer-term goals. It builds on the understanding of your “WHY” (Step #1) and “WHAT” (Step #2) to define “WHERE” you want to go. Before we get into specific metrics, this week we will review keys to structure and organizing metrics to make the process effective for your business.

Key Points:

SMART Goals

  • Goals should be Specific, Measurable, Attainable, Relevant, and Timely (SMART).
  • By making them clear and measurable, businesses can focus on what truly matters.

Metric Timeframes

Metrics should cascade from long-term goals to shorter-term objectives that measure progress:

  • 3-Year Goals: Define strategic aspirations for long-term growth.
  • 1-Year Goals: Tactical steps aligned with the 3-year goals.
  • Quarterly, Monthly, and Weekly Goals: Manageable increments that track progress, including leading indicators that drive financial results.

Structuring goals this way ensures accountability and measurable progress over time.

Alignment Across Teams

  • Ensure financial metrics and targets align across all departments, teams, and individuals.
  • Metrics should be actionable and relevant to those responsible for achieving them.
  • A well-structured system ensures that every team member works toward the same objectives.

Weekly Scorecards for Tracking Progress

  • Track weekly financial metrics and targets to monitor performance and make timely adjustments.
  • These activity-based metrics act as leading indicators of long-term goals.
  • Employees should focus on meeting standards based on effort and skill, even if long-term goals depend on external factors.

Iterative Process

  • Be flexible and adjust financial metrics and targets based on new insights or changing business conditions.
  • Refining metrics over time keeps your strategy aligned with business goals.

This step ensures that your financial strategy is actionable, measurable, and aligned with long-term business objectives, providing a clear roadmap for success.

Next Step:

Business owners can self-implement The Financial Operating System. Chapters are available to download at smartbooks.com/resources or you can buy the whole book from Amazon (the marketing firm version or the general business version).

If you would like assistance with implementation or would like to accelerate results for your business, please contact author Cal Wilder at cwilder@smartbooks.com or book a free consultation with our team directly using this calendar link.