Monday, September 9, 2013

Assuming Leadership in Goal-Setting

Beyond the SMART Goal

By Laura Iles - Sr. Consultant, Integrated Insight

Setting SMART goals is a cliché by now. The lure of a Specific, Measurable, Attainable, Relevant Goal  - so easy to check off when  accomplished! – is great.  As companies engage in annual goal-setting exercises for each employee, the SMART Goal is a simple method of providing direction and evaluating performance.

SMART is a good start, but it isn’t enough. For leaders setting goals on behalf of their team, or guiding employees in their own goal setting exercises, adding four other considerations to the mix will improve engagement and performance, in turn driving company success.

As goals are developed, it is tempting to fill our schedules with these delightfully quantifiable targets. Yet, time and energy are finite resources, and there will always be unanticipated challenges or opportunities requiring our attention.

We achieve success by defining only the most critical goals and sharpening our focus. By limiting the sheer quantity, you increase the likelihood of succeeding in the objectives you do set, while leaving space to address the unexpected.

Before defining the crucial goals for individual employees, it is imperative that executive leadership provide direction by performing the same task for the company as a whole. When management does not prioritize, employees and departments are faced with the impossible mission of “doing it all."

This scattershot approach leads to overwhelming and wasted efforts as teams diffuse their energy across too many objectives. Conversely, a firm that selects a few specific targets enhances the likelihood of success by allowing departments to concentrate their resources where they are most needed.

On a company-wide and an individual level, this exercise in clarity forces leaders to precisely define success. When you strip away the extraneous, what does success truly look like? People and companies both succeed by limiting their focus and executing on core competencies. Always ask yourself, is this the best use of time?

Respect the law of diminishing returns.
One approach to enhancing focus is to think about potential goals within the context of diminishing marginal returns. While a goal may be relevant, think strategically about its position within the context of the overarching business strategy. What is the relative importance to the business, and what opportunity costs will you incur as a result?

Given the length of time it will take your employee to achieve that goal, and the resources required to achieve and maintain that higher level of performance, ask yourself honestly:  is it worth it?

There comes a point when the returns from your improvements begin to diminish. If you consistently reach 97% customer satisfaction, the next 0.5% may drive less value than the resources your team will expend to achieve it.

We all know this intellectually, yet it’s so enticing to seize the opportunity to improve the values on the dashboard, rather than taking on the more useful, but less easily-quantified project. Bragging rights over continuous improvement aside, is this goal worth your team’s time, or is there a greater use for their focus?

If you don’t know the answer to that question, consider moving forward with a set date to review resource investment and assess relative benefits. Leave yourself open to letting go of goals that prove to embody diminishing marginal returns.   

Which brings us to the third criterion for goal setting:

Be Flexible
Flexibility includes opportunities for course corrections throughout the year, as well as recognizing accomplishments that occur outside the rigid framework of established goals.

Do you have a procedure in place for restructuring goals after the initial development process? If not, why not? Existing projects take longer than expected, new projects are brought to life, critical projects become less so as customers shift their goals. As a leader, it is your responsibility to guide your employees in reprioritizing their goals.

Further, if a previous objective is dropped, or an employee takes on an additional project, have you developed a method for acknowledging the work accomplished? Achievement of set goals is one method for evaluation, but strong leaders are flexible enough to recognize and reward achievements  attained outside of these goals.  To do otherwise is to risk creating a culture where employees are discouraged from going the extra mile.

Align Objectives
The fourth stumbling block is incompatibility of objectives from one individual or department to the next. 

When employee goals are in opposition to one another, progress stalls. If one department’s “success” depends primarily on cutting costs, the other department’s on improving performance, a project that spans the two departments is doomed to mediocrity at best.

Eventually a leader will step in and make an executive decision regarding the direction the project will take, but this often requires one team to sacrifice their goals. The company loses the benefits that true collaboration might have brought, the employees feel penalized for circumstances outside their control, and the relationship between departments sours.

Achieving an individual goal at the expense of a project’s success is a small-scale version of what happens when firms chase quarterly goals to appease shareholders, at the expense of the long-term health of the company.

As a leader, it is your responsibility to ensure you are not placing your employees in the position of choosing between a good performance review and doing what’s right for the company. Proactive communication to negotiate differences and ensure aligned objectives can mitigate these all too common situations.

Achieve Success
Goal setting is a critical method to cultivate focus and drive improvements, but simply setting SMART goals isn’t sufficient. For the employee and the company to thrive, individual goals must be considered within the broader context of the company culture and objectives, and flexible enough to respond to changing situations.

No comments :

Post a Comment