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Best Practices: Goal Setting

How and Why Goal Setting Works

It’s official: we can accomplish more and go farther if we dedicate ourselves to written goals, keep the goals on our corporate and personal radar screens and follow through on the steps required to make them happen.

Organizations enjoyed productivity gains as a result of management by objectives. Goal setting is the first step in management by objectives.

“Research on goal setting shows that it’s a very powerful technique to improve individual productivity and organizational effectiveness,”

Goals give us focus, get us going, add to our resolve and lead to actions.

Setting Achievable Corporate Goals

Before you can begin goal setting, it’s essential to create a blueprint for how the process will unfold

Recommends five points in the company plan:

  1. Mission statement
  2. Vision statement
  3. Fiscal year priorities
  4. Strategies
  5. Monthly monitoring and managing meetings.

Beginning with a mission statement, each step flows into the next — and goal setting begins after the mission and vision statements are finished. The process needs to be simple. “The more complex it is, the less people are enjoying it,” To be effective, goals should follow the “SMART” format. That means they should meet these criteria:

Specific
Measurable
Achievable
Results oriented
Time sensitive

As goals are set within the organization, finding the right amount of “stretch” — for growth — is crucial.

“Too easy” goals do not boost performance, so they are of little value, but studies show it is best to challenge employees, expect them to challenge themselves, with goals that are attainable, but with considerable effort.

Overdoing Financial Goals? — Often, CEOs fall prey to the allure of setting only financial goals. that compromises the other reasons they are in business — such as employing people and contributing to their communities.

Corporate Goal Categories — Goals in four areas — financial, customer service, employee-based (centering on learning and innovation) and internal business process, other categories, including image and reputation, community relations/philanthropy, sales and marketing.

Whichever categories you choose — or if you customize them for your own organization — the final product should reflect your corporate purpose and path.

Setting Employee Goals — In his work for the textbook “Organizational Behavior,” whether it’s better for employees to set goals in a particular environment, or for them to set goals by themselves, or whether they do best with assigned goals. No one method seems to be better than the other, in terms of outcome and performance.

The more closely a manager can match the employees’ wishes with the goal-setting style, the better the chances for an outcome everyone seeks.

Linking Monetary Incentives to Goals — Bonuses and other pay-for-performance incentives are gaining in popularity, but they work only under certain conditions.

Studies show that pay should not be linked to achieving goals unless:

  • The performance goals are actually under the employees’ sphere of influence
  • The goals can be quantified, then measured and
  • Frequent, relatively large payments are made for achieving goals

If these three conditions aren’t met, undesirable outcomes are possible, Other studies have shown that quality suffers when quantitative goals are given highest priority.

Leadership in Goal Setting — Goals are only worth the paper they’re written on if leaders don’t bring them to life for the organization.

“In the 25 years I’ve been working in this field, I am constantly reminded that it is the CEO’s responsibility to bring passion to the mission. When I see CEOs who are passionate about the mission statement, it lights everybody up. If the CEO’s not, neither are they.”

Cascading Goals in the Organization

There is a “disconnect” between what an executive staff understands about an organization’s goals, and what the CEO believes they understand. In many cases, the staff will tell they don’t even know what the goals are.

“Cascading goals” to describe the process of adopting goals at different levels in a company. Like water over a cliff, goals must spill over and “cascade” throughout an organization to be implemented.

“Cascading creates horizontal alignment in a company,” All the executives at the same level need to gain agreement about what they will do to support the CEO’s vision and minimize conflict.

A dramatic example: Over two years, a technology division of American Express was able to cascade goals from a senior vice president to the 800 people in that area. The end result: the costs of developing a software system were cut in half over a two-year period.

How Cascading Works — Once the vision and main categorical goals are set at the CEO and managerial level, select a person who will champion the process of cascading goals. He or she works to ensure that each department will create goals and action plans that support the goals of the company’s leadership.

Communicating Goals — Updating people on their progress is critical. Goals must be visible and repeated to keep the commitment alive. Besides scheduled meetings, goals may be touted in: monthly e-mail messages, company newsletters, bulletin boards, and “surprise” coffee breaks, among others.
Ensuring Goal Implementation

Action Plans — When everyone returns to their jobs after goal setting exercises, enthusiasm for the goals can be buried by the demands of day-to-day business. The first step is to develop action plans based on the goals-complete with incentives and consequences for non-performance.

Accountability — Discussing consequences is critical in any goals-to-action plan. Often, the consequences are determined as the team works on the goals in the earliest planning stages.

Peer pressure creates such an intense expectation of performance that it causes action. “The perceived humiliation of removal from the team is so great that most people act,”

Monthly Management Meetings — Once your goals and action plans are set, scheduling monthly management meetings to monitor progress. The original planning group should meet for a 90-minute session to recap the previous month; acknowledge progress and examine shortfalls; amend the plan if it needs to be changed; and, clarify the action plan for the next 30 days.

Coaching for Goals — Implementing goals that were set months ago requires discipline. The planning group has to follow through with their direct reports. The managers need the discipline to make the goals a priority over day-to-day firefighting in a business.


When Goal Setting Goes Wrong

How often have you set goals that are then set aside? Examine roadblocks if you have a pattern of abandoning organizational or corporate goals.

Commit Goals to Paper — This may seem obvious. But how often goals are stated but not written down.

Stumbling Blocks for the CEO — Goal setting is not for the faint of heart. It’s not for the passionless, either, He suggests that the CEO spend some time weighing vision, goals and priorities alone — or with an advisor — before inviting trusted managers and employees into the goal setting process. And if a working group goes off-site to do visioning, goal setting and planning, don’t forget to allow for resting and relaxing as well.


Ten Organizational Roadblocks

  1. Lack of clear-cut responsibilities around the goals
  2. Lack of a tracking system
  3. Lack of an accountability system
  4. Lack of commitment
  5. Lack of buy-in from people who are expected to fulfill the goals
  6. Ineffective communication
  7. Lack of time or resources
  8. Too many goals are financially driven
  9. Focusing on too many or too few goals
  10. Goals aren’t tied to a longer-term vision

Personal Obstacles in Goal Setting — When we fail to meet personal goals, many factors may be at play. Houcek, in his studies of high achievers and his experiences with thousands of executives, finds the following common denominators: CEOs with no passion for the goals they have set; the goals are not precise; the personal goal is at cross-purposes with the CEO’s self-image.

Fearing Failure, Commitment — Fears can play a role in our failure to make-or realize – goals. “Goal setting is basically making a commitment,” “Fear of commitment is prevalent in the world. If I don’t set a goal, then I’m not accountable for it. That’s a subconscious tactic for avoiding goal setting.”

Fear of failure is more of a reckoning with the “cost of success.” After all, he points out, we fail every day. In fact, we’re experts at failure.

“Once I’m a winner, I have to continue to win or I’ll be a bigger loser in everyone’s eyes. That’s an unconscious thought, but it’s a very real one,”


Improving Your Life with Personal Goals

Lead a life filled with passion. Believe it’s because you mastered the art of goal setting and realizing those goals.

“It makes for a very fulfilling life. Spend virtually 100 percent of time in four areas.” They are: family, personal health and fitness; business and playing.

Start with “Master Want List” — If living that kind of life sounds appealing, it all begins with a little list called the “Master Want List.”

Questions to prompt you: What do you want to do with your life? Who do you want to meet? What new activities do you want to try? What experiences do you want to have again? Where do you want to go? What do you want to learn? What do you want to improve? Who do you want to spend more time with?

How Will You Benefit? — Choose from the “Master Want List” the goals you would like to pursue and give yourself a timeframe. Next to each goal, indicate how you will benefit from completing it. That’s a prime motivator.

Framework for Personal Goal Setting — Personal goal setting in a way that mirrors business goal setting. Start with a personal mission statement, a personal vision statement, the goals for the next 12 months, annual goals, and an action plan with strategies for success. Use your birthday as the date that you review your goals and set new ones.


The Quantum Factor: Beginning With Yourself

Many of us have achieved success based on an external focus — an ability to accomplish what we want outside of ourselves. We can make quantum leaps simply by focusing on ourselves first.

If you want to have a better business, become a better person. If you want to create new markets, become a better person. If you aspire to greater spheres of influence, become a better person.

Creating Quantum Goals — A quantum goal is reachable, achievable, but beyond your current expectations. “Quantum goals aren’t unrealistic — like I want to be President of the United States in 18 months — but they do involve taking risks,”

Reviewing Goals for Focus — “I believe in reading your goals out loud at least twice a day. Carry them with you, put them on your computer screen. By repeating them, they’re in your subconscious all the time,”.

Goals are a moving target. As things change, as new opportunities arise and new people come into your life, you will want to adjust your goals.

Developing the Discipline — Doing what you need to do, until it becomes habit, is a matter of discipline. “Eating less and exercising more isn’t a matter of willpower. It’s discipline,”

“Discipline will help you keep the 18-month commitments to get to the next level,” “I estimate that it takes about six years to reach the perfect state, the ideal world, from working on your goals.”

Finding Supporters For Your Quantum Goals — Focusing on your personal development can pay remarkable dividends. For example, becoming a better “you” can influence who wants to be on your board, who wants to be your COO, who wants to be around you in social settings.

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