Goal Setting for Success
Grey Glacier in Torres del Paine National Park, Chile
The beginning of the year for many of us is goal setting season. So let’s discuss the process for setting goals as well as the bottom line for effective goals.
Let’s start with our objective in goal setting. What is it we are trying to achieve? Are we simply looking for incremental improvements or are we faced with existential threats that we must overcome? What do your stakeholders need? What are your competitors doing? What must you deliver to grow? Determining the target areas is critical. While many goals might deal with ‘simple’ incremental improvements, we must identify correctly the needs of the business.
Once the topic of the objective is determined - the next step is to look at the potential consequences of different levels of achievement. Too often this is skipped and we set goals where we are comfortable - or perhaps at the edge of our comfort zone, congratulating ourselves for being assertive by establishing a ‘stretch goal’. This is a major mistake and a watch out. The goal level must be set to address the business need, not on our currently perceived ability.
Most teams and team leaders under estimate what they can achieve, and don’t consider the potential value of different levels of performance. When there is a critical objective topic, we must evaluate the consequences and set the goal where the business need is addressed. If a performance level of 95% on a metric is needed to prevent a steep loss in revenue, it would be self defeating to set the goal at 90%. That is planning to lose! While this example seems obvious, I see this issue in goal setting frequently and need to ask the Manager to go back and figure out how to address the business need.
We’ve all heard for years that goals need to be SMART - specific, measurable, achievable, relevant, and time-bound. While this is true, the trap is in evaluating what is relevant and in under-estimating what can be accomplished. If the business will experience severe consequences at performance level less than 95%, then >95% must be the relevant goal! Conversely, if a goal doesn’t deliver meaningful results, it is not relevant and a waste of resources - drop it!
By setting the goal where it is needed, and then rallying our team to achieve the difficult (perhaps seemingly impossible) level of accomplishment, we will unlock creativity and innovation. We will also create organizational pride and team spirit. Most importantly, we avoid the trap of default failure which occurs when we set the goal below what is needed.
While setting a tough goal may be unpopular with the team at the time of goal setting, just imagine how difficult the conversations will be later if they work hard all year to achieve a goal that doesn’t actually matter or achieve the business need, and the negative consequences of underperforming to the true need become reality!
Once a goal is set, the initial communication and mobilization around the goal become critical. For truly challenging goals, the communication plan and initial deployment stages must be clearly thought through and implemented. All parties involved need to hear the message. They need to know how critical achievement is, and the potential consequences of failure. They need to be fully aware of the high level of organizational focus that will occur. Most importantly, they need to know how their actions personally contribute to the accomplishment and how to know if they are winning or losing on a daily basis.
An example might be achievement of a certain cost per unit in a manufacturing plant. It’s easy to see how a big change in cost might be necessary to stay competitive and that we might need to set an aggressive goal in this area. However, most employees don’t really understand how they contribute to ‘cost per unit’. They cannot answer the question - ‘am I winning?’ - in the middle of their shift. Yet this is necessary to create the organizational energy for accomplishment. When deploying the ‘cost per unit’ goal, the manager might need a proxy goal that contributes to cost per unit, can be measured in real time, and employees can relate to. On a filling line, for example, this measure might be units filled per shift. A simple counter with a digital display would inform everyone if they are winning - and then they will be contributing to the cost per unit goal.
Once the goals are deployed, there should be a cadence - frequent and predictable- to measure and communicate progress. The consistency of focus on the goal is critical. Do not let the crisis of the day side track work towards the goal or the progress tracking activity. As milestones are reached, recognition and celebration is important to continue to build momentum.
Teams can deliver more than they think they can if the leader has the courage to set the goal where it needs to be and then effectively orchestrate the effort and build the momentum through consistent focus!
