Business Philosophy | Startup

Framework for Aligning Company’s Aspirational Goals to KRAs with a focus on Value Creation

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I believe the key question that needs to be addressed for value creation is
how do we set aspirational goals and meet the expectations of our investors, stakeholders and ensure no negative surprises?

I am highlighting below the framework for aligning company’s aspirational goals to KRAs with a focus on value creation.

1. Process

  • Founder sets high level aspiration goals in terms of top line, profitability, market share and value creation potential for next 3/4 years
  • CXOs discuss feasibility of achieving the aspirational goals and agree to create Stretch ++ goals

2. Agree on Interim Goals next 12/24 months both financial and qualitative goals:

a) Financial metrics

  • Consistent higher Growth rates and quality of revenues
  • Increase in Market Share
  • Profitable [ Unit economics,]
  • Efficiency of Capital [Return On Investment]

b) Qualitative metrics

  • Capability- Linked to Goals and distinctive value proposition.
  • Culture- Empowered and learning culture.
  • Customer, Ecosystem and people experience.
  • Ethics and Governance

3. Philosophy –PSPD Model – Important ingredient for Business Building resulting into higher value creation.

  • Predictable (2 quarters) Short Term target
  • Sustainable (6-24 months) Long Term Goals
  • Profitable (Unit economics, ROCE (ROI),
  • De-Risk (Revenue streams, supply chain, drivers , succession , tech , regulation , business continuity etc)

D. Performance measurement linked to Goals

Company goals to be broken down to quarters and rolled down to CXO which are then rolled down to operating level.

This process creates a consensus amongst the teams and helps creating focus on aligning priorities and resources in achieving these goals.

It is important to review monthly performance to ensure business is on track and take corrective actions. It is also important to define consequences of over/under performance.

Conduct least half yearly review around major beliefs, assumptions in the fast changing and dynamic business and economic environment, tech, regulations etc.

In summary we need to build an empowered, learning, performance driven, team based culture Define core human values, business values and operating philosophy to get everyone on same page and define responsibilities for achieving the highly stretch goals.

December 2023