Does goal setting in your organization resemble the old game of telephone? The goals at the top of the organization are completely disconnected from those that reach the lowest levels. Here is how these disconnections start:
“Increase profits by 5%!” the CEO declares and points at the Customer Service VP. “How will your organization help us reach that goal?” The VP replies immediately, “By decreasing inventory and increasing quality!” The CEO is happy with that, so the VP tells the Organization to decrease inventory by $5M and increase production quality by 15%.
When the quality goal funnels down the organizational pipeline, the supervisor tells the production associate, “Your goal for the year is reducing production errors by 15.25%, enter it into the performance management system.” Burdened with a goal that he/she had no part in creating but with the goal-setting box checked, the production associate goes back to business as usual.
This is the first chapter of vertical goal setting in corporations. Fast forward to year end, when that supervisor tells the production associate if he/she made their goal and what number to plug into the performance management system to close out the year. This system is clean and easy, but at what cost?
Whose Goals are They Anyway?
With a vertical goal-setting model, whose goals are they anyway? Employees caught at the bottom have no understanding, buy-in, or ownership of their goals, feel disconnected from the business, and discouraged at not being part of the conversation. At performance reviews, employees do not understand what they are measured against nor how raises are determined.
In this model, there is little incentive for departments to work in harmony and, in fact, their lack of coordination and cooperation interferes with each other’s goal achievement. Most associates have no idea how to set goals and with the pressure of meeting production requirements, managers and supervisors are reluctant to take hourly employees off the production floor for training and goal development.
The 3 Keys to Effective Goal Setting
In my experience, transforming goal setting from a singular top down event into a collaborative process results in higher goal attainment because it gets everyone engaged in the conversation, fosters understanding and strong commitment to goal achievement, and opens a dialogue on partnering and resource allocation. When collaboration becomes the norm, the entire goal setting and goal attainment process is more productive and successful. According to Dan Prosser in his book, Thirteeners, “When people are aligned, they understand business goals for the year and the role each goal plays. They recognize that there must be alignment for their efforts to affect the bottom-line success of the company (Prosser, 2015).”
The three keys to effective goal setting are:
- Start at the top – Starting with strategic organizational initiatives, the leadership team develops shared goals. Shared goals align and intersect both vertically and horizontally through the organization creating a framework on which to build and breaking down inter-departmental barriers to eliminate silo behaviors (where a team or department acts for their own good rather than for the good of the organization).
- Cascade goals down – Cascade the leadership team’s goals down through the organization and then challenge associates to craft supporting goals.
- Provide training and time – Invite participation in the goal setting process by teaching everyone how to write goals using the SMART goals model. Challenge associates and teams to create at least one individual goal and one team goal. SMART goals meet these criteria:
Specific – Design a goal that is focused and well-defined
Measurable – Create measurements that enable you to track your progress
Attainable – Identify a goal that can be realistically achieved
Realistic – Choose a goal that you are willing and able to work towards
Time-bound – Set a time line that creates a sense of urgency
The benefits of this three step goal-setting process are:
- Full participation of all employees in creating goals that they understand and support
- Development of supporting goals that facilitate full goal achievement
- Getting everyone on the “same page” which bolsters the organization’s strategic initiatives
- Greater goal achievement strenthened by the specificity embedded in SMART goals
Using a collaborative goal-setting model, the question of whose goals are they anyway, has a new answer; every employee will say these are my goals.
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Prosser, D. F. (2015). Thirteeners. Austin, TX: Greenleaf Book Group Press.