Top 10 Ways to Improve Your Goal Setting Practice

‘Tis the Season for Goal-Setting (…Fa La La La La La La La La). Many of our clients are either finishing, working on, or preparing for goal setting. Some do this constantly, others quarterly, some annually. Some do this very well, others less so. The good part is that organizations are getting better at working with goals, managing performance, and developing their people. Below are some observations and lessons that may help you and your organization improve how to do this and, ultimately, help the organization perform better and achieve the overarching goals.

It Depends

How goal setting is approached depends on the culture and leadership in your organization.  Not all organizations are the same (I know, duh). Not all leaders–and, here, I’m talking about positional authority in the form of supervisors, managers, directors, and executives–are the same (double duh). Those differences drive a great deal in how direct reports and teams approach goal setting.

• Leaders who are punitive will create a defensive approach to goal setting. “Don’t set the bar too high because you will get PIP’ed if you miss any one of the goals.” (PIP – Performance Improvement Plan)
• Leaders who see it as administrivia will do just enough to check the box and get it done. “Look, you just need to write something measurable in each box. This won’t effect your rating or compensation, so just get it done by the deadline.”
• Leaders who use this to align individual, team, and organization performance, will create an approach that helps everyone align on priorities and decision criteria. “My goal is to help the team achieve its objectives which will help the organization retain customers and drive new revenue growth.”

Unfortunately, we see a number of organizations where the former two are more prevalent that the latter one.

People are Maximizers

Almost everyone wants to make the best of their situation. One person will likely define ‘best’ differently than someone else. But few people come to work looking to make the worst of their situation. For some, the ‘best’ is simply getting through the day without getting yelled at. For some, it’s having contributed to some recognizable difference. For some, it’s achieving a major task or goal every day.

Depending on the context, people will try to make the best of the situation. As we look at goal setting, the question is how do we help our people make the best of this process, so they can make the best of their situation?

The Top 10 Ways to Improve Your Goal Setting Practice

Here is a top 10 list of the ways we’ve seen goal setting go from administrivia and drudgery to something useful in aligning, enabling, and accelerating individual and organizational performance.

1. Connect to Something Bigger – Goal setting, at its best, is used to align the individual goals to those of the organization, in support of executing on a competitive strategy in service of the organization’s mission. Make sure the individual goals are consistent with, aligned to, and enable the organizational strategy or that they are relevant to the organization’s mission. The natural flow is: Mission >> strategy >> objectives >> plans (budgets) >> capabilities >> performance >> behaviors. A great check to see if the behaviors enable better performance to achieve the strategy is to ask: “If this person delivers 1000% above their set goal, what difference will that make to the organization achieving its strategic goals?” If the answer is “nothing” or “not much” then you are either measuring the wrong goal or you may have to look at how that job is designed.
2. Manage the Downside Risk – The riskier we make goal setting and performance reviews, the more defensive the activity will become. This risk is where people will maximize their outcomes. If you have a risky environment where people who fail to meet their goals get fired then that will drive a defensive approach to goal setting (e.g., sandbagging or under-promising to then over-deliver). First, risk mitigation is to de-couple goal setting and performance reviews from compensation discussions. Yes, performance and compensation should be aligned. But we all recognize that more goes into compensation than just goal setting. The more tied to compensation, the more likely you are to see ‘gaming the system’ or other manipulation for personal maximization.
3. Fewer, Simpler, More Meaningful Metrics – We have a growing capability to measure a lot of things. That data can become overwhelming. Some of the best people who are measuring performance boil it down to one, two, or three key things. Too many metrics, too many goals and they will invariably come into conflict with one another or get so complicated in tracking that the marginal utility turns negative. Even people who measure a lot of things, over time will tend to simplify things into a primary measure with a few supporting measures. For example, Apple Watch uses 10,000 steps as a proxy for activity. It is not complete or definitive, but it is directionally correct, easy to remember, easy to monitor, and easy to action. There are hundreds of other metrics they could use.
4. Focus on Outcomes, not Activity – Goals should reflect the outcome we are trying to create. I ask clients which they would prefer: the person who accomplishes a task in 2 hours or the person who accomplishes an outcome in 20 hours? Let’s not reward activity. The goal should be SMART, but also reflect the outcome. SMART goals are specific, measurable, are attainable, relevant, and timely. Avoid counting hours or number of times attempted or other work-in-process indicators. What is the result you are looking for?
5. Contributions in Context – One of the most important elements in a goal setting conversation is the discussion to understand how well the person setting their goals really understands their context. How well is the company doing? What is their contribution to key processes? Are they part of a cost center or a profit center? What are the key things the organization competes on in the marketplace and what is their contribution to achieving that. Be sure to ask a number of questions to check their level of understanding. If they don’t understand the business, then that could be one of their goals.
6. Build Up vs. Beat Down – Goal setting and performance management is an opportunity to build the capabilities of the people in the organization. Only in a few cases does being critical to a person become motivating to them. Those people tend to do well in athletics or the military. Most people work better from encouragement, mentoring, and guidance on what to do. Often simply stating the impact their actions or inactions have had are enough to motivate a desire to improve, then the focus can shift on helping them to improve. That help should start with building on what they are already doing well.
7. The J-Curve is Real – Goal setting usually involves doing something more or different or new. If it’s a case of doing something different or differently or new, as the reviewer you need to expect performance to drop initially. This effect – where performance degrades as the person tries new skills or behaviors, but eventually returns to baseline then improves – is called the J-curve. Putting in new systems in warehouses or data processing, we knew it would take 13 weeks of practicing the new way to get back to baseline and within 6 months there would be significant year-over-year improvement. So, build that learning time into the goal setting.
8. Behaviors are more Important than Numbers – When you are trying to adopt new ways of working or achieving higher performance, focus more on the demonstration of new behaviors and less on the actual performance metrics. When Harley-Davidson moved to a new production method in their York plant in 2009, the focus was on the behaviors, not on the metrics. They knew that if they focused on recognizing and acknowledging their team members doing the right things, then the performance metrics would eventually show that improvement. Simon Sinek has a great example about working out and eating healthy – if you look in the mirror every day after working out, you won’t see much progress, and you’d be tempted to say after a few days that it’s not working, even though there is long-term data that exercise and good diets promote health.
9. Vertical Accountability – Goal setting is as much about the person setting the goals as it is about the person they report to. Goal setting for the manager and executives should be aligned throughout the vertical reporting chain. Meaning, as a manager, one of my goals should be that my team members achieve their goals. Getting the boss invested in helping their team members succeed is an important way to gain alignment and support. If a manager has a team where no one meets their goals, chances are good that it’s not entirely the fault of the staff. Michael Abrashoff in his book It’s Your Ship, talks about the importance of knowing what your boss’s boss’s boss’s priorities are. Even better is to hold the leaders accountable for their teams achieving their goals.
10. Increase the Frequency – Employees entering the workforce today are digital natives. They are used to getting things on-demand (e.g., Amazon, Google, YouTube, etc.). They are feedback intensive. They want to know if they are doing a good job – and they want to succeed. If they are working for you, and you are still reading this, chances are they (and you) did well in school. Digital natives had instant feedback and constant pressure to get an A in school. So, the more you can move goal setting and performance feedback from annual to quarterly to monthly to constant, the more they will benefit from those short conversations where you check in on their progress, ask them what help they want from you, and offer some suggestions. They will love the feedback and strive to achieve their goals and, in doing so, achieve your objectives, and in doing so, help the organization deliver on the strategy and serve their mission.

So What? Now What?

We are living in interesting times. Unemployment is low. Talent is back at a premium. Regrettable turnover is increasing as recruiters and employers are getting more generous with compensation. We need to make our organizations places where our good talent (not only top talent, that’s too narrow a field) wants to stay, wants to recruit their friends to work with them, wants to develop their individual skills, and wants to make a difference. The more we can take goal setting from annual, weaponized, risky, administrative drudgery and turn it into a series of ongoing conversations about purpose, contribution, growth, performance, progress and impact, the more likely you are to win at work.