The 10 Step Goal Setting, Planning and Execution Strategy for Hedge Funds

If you are leading a hedge fund or family office, the current market volatility might be making you weary. Your mindset could get in the way of making bold decisions and following through on the execution of your plans. Take advantage of the information and skills you already have by setting clear goals, designing effective plans and having an execution strategy to optimize your performance.

The 10 Step MVP Plan

Comprehensive goal setting and effective plans can unlock peak performance among the investment and operations teams of a hedge fund. With over 25 years of experience, our CEO Rich Bello has seen many approaches and has distilled both the goal setting and planning processes down into 10 easy “MVP” steps to support any strategy.

1. Mission: Decide which areas and then the categories within those areas that you want your firm to focus on. For instance, on the investment side of the firm, “sourcing investment ideas” could be one area and a category of focus within this area could be “idea dinners.”

2. Prioritize: Prioritize these “area/category” combinations so that you know which to focus on first and where to invest both your intrinsic (i.e., time) and extrinsic resources (i.e., capital). For instance, goals that involve acquiring key talent should usually be prioritized first because without talent, not much else can be done well.

3. Measurement: Create measurement criteria for these “area/category” combinations so that when you set your goals, you will have a basis upon which to evaluate your progress on them. In this step, you would also decide upon the frequency that they are to be measured. For instance, they could be measured daily, weekly, or monthly. Measuring the fund’s performance daily is the obvious example here.

4. Goal Statement: State your goal affirmatively. Include the measurement. Be sure to make your goal specific. It should also be challenging but not too difficult. If it isn’t challenging, you won’t be excited about it but if it is too difficult you might give up. An example of a goal statement could be: Hire and onboard a Chief Investment Officer that scores the highest on the firm’s tests for our new fund within six months.

5. Purpose Statement: State the reason why you must achieve this goal. This is a crucial part of the process. If you don’t have a good reason why, when the going gets even a little bit challenging you will give up…and that’s if you’ve even started. The purpose statement should have an element of pain and pleasure. These are known better as consequences and rewards in the business world. Why is this important? Pain and pleasure (consequences and rewards) are the greatest motivators for you to complete your goals. They provide the inspiration to get started and the motivation to follow through when the going gets more difficult.

6. Action Plan: A goal without a plan is just a dream and won’t become reality. Plans are crucial. They must be written. There are various elements of a planning process to consider. The first is key and also the most fun. That’s brainstorming. Start by dumping all of the ideas you can come up with for any given goal out of your head and “on to paper.”

7. Prioritization (Part 2): Once you have the action items for the plan, you can prioritize those which will make the greatest impact towards achieving the goal. Feel free to use the Pareto Principle, also known as the 80/20 Rule for this exercise. The Pareto Principle states that in general, 80% of the progress towards achieving a goal comes from 20% of the actions taken from a given action plan. The idea is to pick out the top 2 action items that will have the greatest impact on achieving your goal from the 10 you have brainstormed.

8. Deadlines: Without a deadline, goals will rarely be achieved. Further, without consequences for missing the deadline, the deadline will rarely be met. Finally, many goals do not have “apparent” deadlines so they must be created thoughtfully and with consequences. For example, if a goal is to complete a mock SEC exam for your firm, there is no apparent deadline. The real deadline is when the SEC shows up on your doorstep and if you haven’t done the mock exam by that time…that’s not good.

9. Start Line: Starting, or “scheduling,” is equally if not more important than setting deadlines. Why? Nothing will get done unless you start. If you start too late, it won’t be done well and will add a tremendous amount of stress. If you start too soon, you might miss out on the creative energy that comes with getting closer to the deadline. Start lines can be created after setting deadlines so that you know when to actually start if you have an idea about how long it will take. For instance, if you want to hire a key executive for your firm, schedule a meeting with the key stakeholders to do a gap analysis and job description.

10. Accountability Strategy: It is crucial to have some form of accountability strategy so that you are ensured of both executing and following through on your plan until completion. My favorite strategy is to hire a qualified coach. Coaches have various tools at their fingertips to hold you accountable for achieving your goals. A good coach will do whatever it takes to ensure that their client executes the plan that they designed. For instance, if a client sets a goal to raise 100 mm in six months, the coach could suggest after brainstorming with the client that they sign up for a capital intro panel to discuss the topic that they have expertise in. The strategy here is the fear of public humiliation. You better be prepared, or you will injure your reputation.

The Bottom Line

While comprehensive goal setting can unlock peak performance among investment and operational teams, it is effective for any business model. Use the 10 step MVP plan to set and achieve goals. We specialize in supporting hedge fund executives to achieve peak performance. Our team of coaches and consultants have founded and built some of the world’s leading hedge funds. Led by our CEO Rich Bello, his more than 25 years of Hedge Fund experience have shaped his approach to advisory and coaching. Whether you are just starting a hedge fund or want to enhance your performance at an established firm, we are here to advise you and your team.

To get started, check out our Hedge Fund / Family Office Advisory services to achieve peak performance with our process-driven approach.

Capturing the culmination of his experience in the hedge fund industry, read Rich Bello’s book, The 10 Step Arootah Success Formula.The 10 Step Arootah Success Formula.