One of the most challenging aspects of
goals is selecting them. Where do you
start? Sometimes, it’s pretty easy to spot
a goal that makes sense for the
organization. For instance, the
organization might set a goal of an
increase in total revenue of 10% over
If the market conditions and overall economy are reasonably sound, and the internal capabilities of the company
are in place, such a goal might even be on the conservative side. It’s the total context in which the organization
sets the goal that is crucial. So if the goal is wise, it’s a goal that the organization could use to build cascading
goals to other departments, teams and individuals.
But what if the economy isn’t doing very well? And to make things even more challenging, let’s assume
the market we are in is more distressed than the broader economy. Under these circumstances, does a
goal of increasing overall revenue of 10% over the prior year seem wise? If the organization went ahead
and set that goal, would we be able to set realistic and attainable department, team and individual
goals? Would we encourage risky behaviors and even riskier decision making?
The selection of goals is crucial. We have to get the process started on the right foot, or we can end up with
goals that might sound great (“Let’s increase revenue by 10% over last year!”), but actually hurt the
organization, because we end up encouraging risky decision making and counterproductive behaviors. Setting
goals should achieve exactly the opposite results. Goal setting should make the organization more focused,
provide a framework for sound decision-making and provide the basis for employee motivation
The problem arises when organizations assume that because a goal fits the SMART criteria, it’s a well-chosen goal. That’s not
always the case. We came across a great illustration of this point in our research related to President Kennedy’s 1961 promise to
put an American on the moon by the end of the decade.
There were many benefits to the project, and the benefits are not disputed. But at its core – was the goal of placing a man on the
moon by the end of the decade a wise goal? Perhaps. Perhaps not. But this is the difficulty of measuring every goal we set for our
organization by using SMART. We can easily skip the more fundamental question of whether or not the goal itself is a wise one. We
could end up shooting for the moon and miss opportunities to select goals aimed at building more foundational elements of a
Sometimes we can find wise goals by looking carefully inside our own
organizations and asking ourselves can we do something
better/cheaper/faster? These types of introspective goals related to
improved productivity almost always fit into the “wise” goal category.
The real test of wisdom in this area is to honestly evaluate your
organization’s internal capabilities to deliver on the goal and the
incremental improvements needed to achieve the stated goal.
The organization’s mission, vision values statement can sometimes provide inspiration for effective goal
selection. Some organizations state they want to be “The Number One Provider of Widgets to XYZ Market” as a
corporate mission. The organization might be number five in its market today, so this might serve as an excellent
goal for the coming year to improve to number four. Many organizations have missions that are similar in terms
of client or customer retention or service, product service or quality, etc.
• Goals from previous review period – can these goals be updated or improved upon?
• Job description and critical job responsibilities – what are key job responsibilities? What are the key indicators of
success in the job role, and how is that success measured?
• Comments and suggestions from previous performance appraisals – have employees and managers added or
discussed new ideas for the job that could serve as goals?
• Managers’ objectives and items listed on executives’ Balanced Scorecards – how can employee goals support the
broader goals and objectives of the department or team?
• Division/department plans and strategies – can employee goals cascade effectively from department or
• Discussions with colleagues/more senior managers/internal clients/customers – what do other stakeholders
suggest or say about goals or objectives?
Look at your organization’s customers and clients! Asking clients for ideas and
suggestions could lead to goals that include things like:
• New products
• Improved service standards
• Customer retention rates
The problem is – you won’t know unless you ask them.
Now that we’ve made wise decisions and selected
our organizational, department, team and individual
goals, we’re ready to test these goals to ensure we
can measure and effectively manage their
successful completion. This is where SMART goals
come into play.
There are many articles written about SMART goals,
and a lot of the literature represents substantial and
important contributions to the whole area of
performance management. We need goals.
Think about how human nature works related to goals and aspirations. Let’s say we want to lose weight.
Research proves fairly conclusively that setting broad, general goals are not effective at motivating people. So if
the goal, “I want to lose weight” is what we are working towards, how do we know we’ve been successful? The
answer is, we don’t. On the other hand, if we set a fitness goal that says we want to lose 10 pounds in six
months, we can track our monthly and weekly progress towards that goal. Additionally, we can look at other
fitness related goals around specific activity we know will promote success of reaching our primary goal.
So we can track things like:
The number of steps we walk per day
Our calorie intake per day
The minutes per week of aerobic exercise we get
Each of these supporting activities helps us achieve our
overall goal of losing 10 pounds in 6 months.
Look carefully at the overall goal we used in our example above. It is a good illustration of a SMART goal.
• Specific – 10 pounds
• Measureable – yes, by our weight on a scale using our current weight as a benchmark
• Attainable – yes (with a doctor’s supervision, of course!)
• Relevant – if we are trying to improve our fitness, yes
• Time-bound – yes – we’ve set a six-month target
So we have set a wise fitness goal, used SMART to ensure it can be measured and we can work effectively
towards it. We are now good to go!
Maintain an 85% Client
retention rate for 2013.
Department Goal: Improve
performance in handling of
customer complaints within
Success Criteria: Transfer of knowledge and/or skill back to job.
Measurement: Positive feedback on applicability of learning to job
responsibilities with greater than 70% approval rating.
Cascading goals, like the example on the previous page, will work. But simply setting up cascading goals only
gets you started. There is some data beginning to emerge suggesting organizations that use cascading goals
are not seeing the results this approach promises.
The most current research by David Norton and Robert
Kaplan of the Balanced Scorecard Consortium from the
Harvard Business Review shows that nine out of 10
companies fail to execute their strategy. The reasons for
this significant disconnect between execution and
strategy are likely going to prove to be very complex, but
Norton and Kaplan’s preliminary findings offers a glimpse
into some explanations that show the employees in many organizations do not understand their organization’s
It’s not that alignment of goals from the organization through departments, teams and then to individuals is a bad
thing. In fact, it’s quite the opposite. But it turns out that the key to making alignment work for your organization
does not end with creating a cascade goal structure. That is simply the beginning. What is required next is a
relentless commitment to effective communication from senior leaders directly to employees. The chart below
reproduces “The Trouble with Cascades” from the Galunic/Hermreck article with suggested solutions to each of
the three “troubles.”
Trouble Proposed Solution
Only top leaders can give strategic communications the Set regularly scheduled meetings for the entire staff where
appropriate weight. senior leaders address strategy, progress towards strategic
goals, and organizational plans to achieve them.
Strategy involves trade-offs, which are more easily accepted Set strategic objectives with broad input from multiple
when put into a broad perspective, without parochial filters. members of leadership team and employees. But ensure
that decisions are explained in the context of high level goals
and long term objectives.
As in the game of “telephone,” messages passed from Use multiple channels for direct communication from senior
person to person seldom arrive intact. leaders to employees. Social media inspired tools offer great
promise for much more direct connections, questions and
answers and engagement.
Performance management is the
process by which we gauge, encourage
and facilitate the success of employees
and the organization towards the
achievement of predetermined set
We’ve already covered the first two elements as stand alone sections of this brief e-
book. Performance management is the day-to-day, tactical step where so many
organizations fail to fully execute well developed strategies.
If we think of performance management as a process designed to help us hit
predetermined goals, many of the more theoretical and confusing aspects of the
entire process simply melt away. We are left with a process that helps us focus on
results and gives us practical guidance in improving the performance of our
organization and our employees’ performance.
The key for our conversation here is to learn a little more about how to effectively manage to the goals we
selected. That means we have to make the performance measurement of our employees tied directly to the
achievement of goals. That also means we have to do a better job with our performance reviews. Here are the
touchstones of effective goal management (performance reviews) once we’ve made wise selections and tested
the goals using SMART.
None of these steps are simple, easy or can be accomplished overnight. But each of these steps can be
achieved by those organizations that are committed to success and willing to embrace change.
Setting clear goals actually has two equally important components. The first is to make sure the goals you are
working towards meet the SMART criteria. If the goal is specific and measureable, there is a very strong
likelihood that it is reasonably clear. But the other part of clarity is the need for high level, persistent and
consistent communication. We mentioned the great research being conducted and reported from the Harvard
Business School about how employees come to understand strategy, and we know that simply having well-
aligned goals is not enough.
Think of it this way. If your senior leaders rely upon layers of management to effectively communicate
organizational goals to employees, it is inevitable that something will be lost in the next level of communication.
It’s like the old party game where you start with a short story at one end of the room. By the time the story gets
to the other end, it’s completely different. Senior leaders are far more invested in the organizational level goals
than anyone else. So they are going to be the best at communicating with enthusiasm, urgency and
accuracy to employees about these goals. Take advantage of regular staff meetings, make short
videos, use newsletters or any other form of communication that will reach your employees. But no matter how
you do it, make the communication come directly from senior leaders. We strongly advocate for personal
communications as the best way to engage employees so employees can ask questions and express concerns.
One of the most commonly cited issues with employee performance appraisals is they are not frequent enough.
The old-fashioned annual performance review does not work in today’s marketplace. The pace of change is
simply too fast and we need to adopt our performance management thinking to this new market reality. One of
the reasons organizations that manage to goals on at least a quarterly basis are so much more successful is
they are meeting this new market reality head on. They aren’t waiting a year to review progress towards goals.
We need to look at how we are doing every day, each week, each month and compare our progress to the
benchmarks we’ve established that help show us if we are on track or off track. It’s this type of performance
review that creates the type of agility organizations need in this new, rapidly changing market to be competitive.
If we know in February we are trending behind to hit our year-end sales goal, we have 10 months to make
adjustments to get back on track. That’s how successful organizations beat their competition today. They are not
waiting and reacting. They are getting ahead, and they are getting their employees ahead so they can anticipate
the need to make changes to impact results in the future.
Here at BizLibrary we are big believers in the value and power of “crowd wisdom.” Automated tools
inspired by Web 2.0 and social media and social networking allow organizations to tap into the knowledge
and information widely dispersed among the entire workforce about everyone’s performance and
contributions. For instance, if an organization uses such a tool, supervisor and employee both could make
social media styled journal entries about events as they unfold and projects, successes and changes
during the course of the year. This sort of “real-time” data and information substantially reduces the need
to rely on memory at the end of the year (a common problem with annual reviews). Further, these types of
tools can also facilitate other employees offering praise, support and positive feedback about an
employee’s contributions as they occur.
The logical extension of more frequent reviews of performance
is that we are evaluating progress towards goals using reliable
data. We know employees get frustrated, and justifiably so,
when they believe the performance is reviewed subjectively or
unfairly. Further, as an organization we want to make sure we
are making decisions based upon good information. This is
another place where SMART goals help us make sure we’ve
set our goals well. If the goal is measureable, this is generally a
good indicator that we have or will have data to use to look at
progress during the course of the year.
Don’t make the mistake of thinking objective means 100%, completely filled in with data, no gaps. It doesn’t. As
managers, we are expected to make decisions with the best information at our disposal, and many times this
means we are working with incomplete information. This is when we are expected to apply our professional
judgment. These types of decisions are still “objective.”
In the world of performance appraisals, our employees likewise expect objectivity. Sometimes this means we
can’t always measure – exactly – how an employee’s skills and talents contribute to the organization’s bottom
line. In this knowledge-based economy the contributions of knowledge-based employees are not always easy to
“measure” in the traditional sense. That’s okay. Objective means “fair.” Try and use as much data as possible,
and make sure your managers understand that the exercise of their professional judgment is expected when
data isn’t available.
Every employee’s job description has numerous “key competencies” or “critical job roles” listed. Which ones
really support the achievement of the goals that have been identified for the employee? Is it all 22 or are there
three to five that really matter? The answer is much more likely there are three to five that really matter. So use
only those competencies and job roles for the purposes of evaluating performance and employee development.
By tying the employee’s performance to these key areas, you’ve taken important steps to
Cultural or organizational
Sales, operations, administrative functions, customer service
Perform a particular job at a successful level
Effectively managing to goals is a proven strategy to improve your organization’s overall performance. But it takes more than
simply setting goals. What is emerging in the research about organizational success in today’s market are some fairly clear
indicators of what it takes to effectively manage goals. The three steps are not mysterious, nor are they theoretical. The three
practical, actionable steps any organization can take to effectively manage to goals are:
- All of the great results you can expect from managing to goal, however, fall flat if the goals are not selected
wisely at the beginning. So, selection of goals is a foundational and critical first step. Once goals are wisely selected, you
need to ensure that you can, in fact, manage toward them and you can use the SMART goals test to ensure your chosen
goals will be effective.
– Most organizations fail to execute on strategic initiatives. It’s not because most organizations are failures,
or that they don’t want to succeed. The failures are almost always attributed to a failure to effectively communicate a strategic
vision to all of the employees. Communicating the strategic goals to employees so they understand them helps provide the
necessary framework for their own goals, gives them context and creates a decision-making point of reference. Effective
communication then sets the stage for the final step.
- Your organization has to make management of performance tied to goals for the entire
organization a routine part of the day-to-day work culture. Those organizations that are looking at goals, measuring progress
at least quarterly and adjusting their performance to stay on target are more profitable, more sustainable and have more
engaged employees. Performance management can no longer be left to a one-time-a-year meeting. When our employees
understand what we expect, can see on an ongoing basis how they are doing and can quickly find information and data about
their performance they can make informed choices and decisions to either stay or get back on track to hit their goals. It is that
type of agility in this rapidly changing market that will ultimately separate sustainable long-term success from flashes of short
term success and then failure.
According to Bersin by Deloitte, Predictions for 2013
Effective goal management requires organizations to incorporate goals into the day-to-day work flow and culture
of the entire organization. BizLibrary’s cloud-based Performance Solution provides a systematic way of
evaluating performance based upon goals supported by data and aligned
across the organization.
As managers and employees work together on goals, employees can get the
development they need when gaps arise or managers can add resources to
ensure teams hit targets. This sort of real-time access to data and information
creates agility and forms the basis of goal management and achievement in
this fast-paced market.
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