Chapter 2
Setting Goals
IN THIS CHAPTER
Linking goals to your vision
Creating SMART goals
Concentrating on fewer goals
Publicizing your goals
Following through with your employees
Determining sources of power
If you created a list of the most important duties of management, “setting goals” would likely be near the top of the list. In most small and start-up companies, the owner sets the overall purpose — the vision — of the organization. The owner then has the job of developing goals and plans for achieving that vision. Owners and employees work together to set goals and develop schedules for attaining them.
As a business owner, you’re probably immersed in goals — not only for yourself, but also for your employees and your organization. This flood of goals can cause stress and frustration as you try to balance the relative importance of each one:
Should I tackle my goal of improving turnaround time first, or should I get to work on finishing the budget? Or maybe the goal of improving customer service is more important. Well, I think I’ll just try to achieve my own personal goal of setting aside some time to eat lunch today.
Sometimes having too many goals is as bad as not having any goals. This chapter helps you understand why setting strong, focused goals is essential to your success and that of your employees. It also guides you in communicating visions and goals and keeping both you and your employees on track to meet established goals.
Goals provide direction and purpose. Don’t forget, if you can see it, you can achieve it. Goals help you see where you’re going and how you can get there. And the way you set goals can impact how motivating they are to others.
Knowing Where You’re Going
Believe it or not, Lewis Carroll’s classic book Alice’s Adventures in Wonderland offers lessons that can enhance your business relationships. Consider the following passage, in which Alice asks the Cheshire Cat for advice on which direction to go.
- “Would you tell me, please, which way I ought to go from here?”
- “That depends a good deal on where you want to go,” said the Cat.
- “I don’t much care where —,” said Alice.
- “Then it doesn’t matter which way you go,” said the Cat.
- “ — so long as I get somewhere,” Alice added as an explanation.
- “Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”
It takes no effort at all to get somewhere. Just do nothing, and you’re there. (In fact, everywhere you go, there you are.) However, if you want to get somewhere meaningful and succeed as a business owner, you first have to know where you want to go. And after you decide where you want to go, you need to make plans for how to get there. This practice is as true in business as in your everyday life.
For example, suppose that you have a vision of starting up a second dry cleaning store in a nearby suburb so that you can grow your business. How do you go about achieving this vision? You have three choices:
- An unplanned, non-goal-oriented approach
- A planned, goal-oriented approach
- A hope and a prayer
Which choice do you think is most likely to get you to your goal? Go ahead, take a wild guess. If you guessed the unplanned, non-goal-oriented approach to reaching your vision, shame on you. Please report to study hall. Your assignment is to write 500 times: A goal is a dream with a deadline.
If you guessed the planned, goal-oriented approach, you’ve earned a big gold star.
Why should you set goals?
Following are the main reasons to set goals whenever you want to accomplish something significant:
- Goals provide direction. To get something done, you have to set a definite vision — a target to aim for and to guide the efforts of you and your organization. You can then translate this vision into goals that take you where you want to go. Without goals, you’re doomed to waste countless hours going nowhere. With goals, you can focus your efforts and your team’s efforts on only the activities that move you toward where you’re going — in this case, opening another dry cleaning location.
- Goals tell you how far you’ve traveled. Goals provide milestones to measure how effectively you’re working toward accomplishing your vision. If you determine that you must accomplish several specific milestones to reach your final destination and you complete a few of them, you know exactly how many remain. You know right where you stand and how far you have yet to go.
- Goals help make your overall vision attainable. You can’t reach your vision in one big step — you need many small steps to get there. If, again, your vision is to open a second dry cleaning location, you can’t expect to proclaim your vision on Friday and walk into a fully staffed and functioning store on Monday. You must accomplish many goals — from shopping for business space, to hiring staff, to getting the word out via advertising — before you can attain your vision. Goals enable you to achieve your overall vision by dividing your efforts into smaller pieces that, when accomplished individually, add up to big results.
- Goals clarify everyone’s role. When you discuss your vision with your employees, they may have some idea of where you want to go but no idea of how to go about getting there. As your well-intentioned employees head off to help you achieve your vision, some employees may duplicate the efforts of others, some employees may focus on the wrong strategies and ignore more important tasks, and some employees may simply do something else altogether (and hope that you don’t notice the difference). Setting goals with your team clarifies what the tasks are, who handles which tasks, and what is expected from each employee and, ultimately, from the entire team.
- Goals give people something to strive for. People are typically more motivated when challenged to attain a goal that’s beyond their normal level of performance — this is known as a stretch goal. Not only do goals give people a sense of purpose, but they also relieve the boredom that can come from performing a routine job day after day. Be sure to discuss the goal with them and seek feedback where appropriate to gain their commitment and buy-in.
What makes goals effective?
For goals to be effective, they have to link directly to the owner’s final vision. To stay ahead of the competition — or simply to maintain their current position in business — business owners create compelling visions, and then they and their employees work together to set and achieve the goals to reach those visions.
When it comes to goals, the best ones
- Are few in number but very specific and clear in purpose.
- Are stretch goals. They’re attainable, but they aren’t too easy or too hard.
- Involve people. When you involve others in a collaborative, team-based process, you get buy-in so it becomes their goal, not just yours.
Identifying SMART Goals
You can find all kinds of goals in all types of organizations. Some goals are short term and specific (“Starting next month, we will increase production by two units per employee per hour”); others are long term and vague (“Within the next five years, we will become a learning organization”). Employees easily understand some goals (“Line employees will have no more than 20 rejects per month”), but other goals can be difficult to measure and subject to much interpretation (“All employees are expected to show more respect to each other in the next fiscal year”). Still other goals can be accomplished relatively easily (“Reception staff will always answer the phone by the third ring”), whereas others are virtually impossible to attain (“All employees will master the five languages that our customers speak before the end of the fiscal year”).
How do you know what kind of goals to set? The whole point of setting goals, after all, is to achieve them. It does you no good to go to the trouble of calling meetings, hacking through the needs of your organization, and burning up precious time only to end up with goals that aren’t acted on or completed. Unfortunately, this scenario describes what far too many business owners do with their time.
Breaking down the meaning of SMART
The best goals are smart goals — actually, SMART goals is the acronym to help you remember them. SMART refers to a handy checklist for the five characteristics of well-designed goals:
- Specific: Goals must be clear and unambiguous; broad and fuzzy thinking has no place in goal setting. When goals are specific, they tell employees exactly what’s expected, when, and how much. Because the goals are specific, you can easily measure your employees’ progress toward their completion.
- Measurable: What good is a goal that you can’t measure? If your goals aren’t measurable, you never know whether your employees are making progress toward their successful completion. Not only that, but your employees may have a tough time staying motivated to complete their goals when they have no milestones to indicate their progress.
- Attainable: Goals must be realistic and attainable by average employees. The best goals require employees to stretch a bit to achieve them, but they aren’t extreme. That is, the goals are neither out of reach nor set too low. Goals that are set too high or too low become meaningless, and employees naturally come to ignore them.
- Relevant: Goals must be an important tool in the grand scheme of reaching your company’s vision and mission. You may have heard that 80 percent of workers’ productivity comes from only 20 percent of their activities. You can guess where the other 80 percent of work activity ends up. This relationship comes from Italian economist Vilfredo Pareto’s 80/20 rule. This rule, which states that roughly 80 percent of effects come from 20 percent of causes, has been applied to many other fields. Relevant goals address the 20 percent of workers’ activities that has such a great impact on performance and brings your organization closer to its vision, thereby making it, and you, a success.
- Time-bound: Goals must have starting points, ending points, and fixed durations. Commitment to deadlines helps employees focus their efforts on completing the goal on or before the due date. Goals without deadlines or schedules for completion tend to be overtaken by the day-to-day crises that invariably arise in the workplace.
SMART goals make for smart businesses. Many owners and managers neglect to work with their employees to set goals together. And for the ones that do, goals are often unclear, ambiguous, unrealistic, immeasurable, uninspiring, and unrelated to the organization’s vision. By developing SMART goals with your employees, you can avoid these traps while ensuring the progress of your business and your team.
Developing SMART goals
Although the SMART system of goal setting provides guidelines to help you frame effective goals, you have additional considerations to keep in mind. The following considerations help you ensure that anyone in your organization can easily understand and act on the goals you and your employees agree on:
- Ensure that goals are related to your employees’ role in the business. Pursuing an organization’s goals is far easier for employees when those goals are a regular part of their jobs and they can see how their contributions support the company. For example, suppose that you set a goal for employees who solder circuit boards to raise production by 2 percent per quarter. These employees spend almost every working moment pursuing this goal, because the goal is an integral part of their job. However, if you give the same employees a goal of “improving the diversity of the organization,” what exactly does that have to do with your line employees’ role? Nothing. The goal may sound lofty and may be important to your business, but because your line employees don’t make the hiring decisions, you’re wasting both your time and theirs with that particular goal.
- Whenever possible, use values to guide behavior. What’s the most important value in your organization? Honesty? Fairness? Respect? Whatever it is, ensure that you and any other leaders in the business model this behavior and reward employees who live it.
Simple goals are better goals. The easier your goals are to understand, the more likely the employees are to work to achieve them. Goals should be no longer than one sentence; make them concise, compelling, and easy to read and understand.
Goals that take more than a sentence to describe are actually multiple goals. When you find multiple-goal statements, break them into several individual, one-sentence goals. Goals that take a page or more to describe aren’t really goals; they’re books. File them away and try again.
Setting Goals: Less Is More
Big businesses love to plan. When the last planning meetings are over, the managers often congratulate each other over their collective accomplishment and go back to their regular office routines. Before long, the goals they hammered out together are forgotten, and the pages they were recorded on are neatly folded and stored away in someone’s file cabinet. Meanwhile, business goes on as usual, and the long-range planning effort goes into long-term hibernation. You probably don’t have this problem, but the lesson is there for you to learn all the same, because even in a small business, it can be tempting to create goals and then let them slide as you resume your normal day-to-day work.
Don’t let all your hard work be in vain. When you go through the exercise of setting goals, keep them to a manageable number that can realistically be followed up on. And when you finish one goal, move on to the next.
The following guidelines can help you select the right goals — and the right number of goals — for your business:
- Pick two to three goals to focus on. You can’t do everything at once — at least not well — and you can’t expect your employees to, either. Attempt to complete only a few goals at any one time. Setting too many goals dilutes the efforts of you and your staff and can result in a complete breakdown in the process.
- Pick the goals with the greatest relevance. Certain goals bring you a lot closer to attaining your vision than do other goals. Because you have only so many hours in your workday, it clearly makes sense to concentrate your efforts on a few goals that have the biggest payoff rather than on a boatload of goals with relatively less impact to the business.
- Focus on the goals that tie most closely to your organization’s mission. You may be tempted to take on goals that are challenging, interesting, and fun to accomplish but that are far removed from your organization’s mission. Don’t do it.
- Regularly revisit the goals and update them as necessary. Business is anything but static, and regularly assessing your goals is important in making sure that they’re still relevant to the vision you want to achieve. Put in quarterly or midyear review schedules. If the goals remain important, great — carry on. If not, meet with your employees to revise the goals and the schedules for attaining them.
Avoid creating too many goals in your zeal to get as many things done as quickly as you can. Too many goals can overwhelm you — and they can overwhelm your employees, too. You’re far better off setting a few significant goals and then concentrating your efforts on attaining them. Don’t forget that your management skill isn’t measured by one huge success after another. Instead, it involves successfully meeting daily challenges and opportunities — gradually but inevitably improving the business in the process.
Communicating Your Vision and Goals to Your Team
Having goals is great, but how do you get the word out to your employees? As you know, goals should align with your vision for your business. Establishing goals helps you ensure that employees focus on achieving the vision in the desired time frame and with the desired results. You have many possible ways to communicate goals to your employees, but some ways are better than others. In every case, you must communicate goals clearly, the receiver must understand the goals, and the relevant parties must follow through on achieving the goals.
Communicating your organization’s vision is as important as communicating specific goals. You can communicate the vision in every way possible, as often as possible, throughout your organization and to significant others such as clients, customers, suppliers, and so forth.
When you communicate vision and goals, do it with energy and a sense of urgency and importance. You’re talking about the future of your business and your employees, not the score of last night’s game. If your team doesn’t think that you care about the vision, why should they? Simply put, they won’t.
Announcing your vision
Companies usually announce their visions to employees — and the public — in ways that are designed to maximize the impact. Companies commonly communicate their vision in these ways:
- By conducting employee rallies where the vision is unveiled in an inspirational presentation
- By branding their vision on anything possible — business cards, letterhead stationery, posters hung in the break room, employee name tags, and more
- By proudly emblazoning their vision statements within company websites; on Facebook fan pages; and via electronic media campaigns, Twitter tweets, and other Internet-enabled methods of communication
- By mentioning the corporate vision in newspaper, radio, television, and other media advertising
- By encouraging managers to “talk up” the vision in staff meetings or other verbal interactions with employees and during recruiting
To avoid a cynical “fad” reaction from employees who may be suspicious of management’s motives when unveiling a new initiative, making consistent, casual, and genuine reference to it is much more effective than hosting a huge, impersonal event. Again, in this case, less is often better.
Communicating goals
Unlike visions, goals are much more personalized to the department or individual employees, and you must use more formal and direct methods to communicate them. The following guidelines can help:
- Write down your goals. Putting them down on paper or in a Word document makes them alive and real. They are no longer abstract, in-your-head ideas.
- Conduct one-on-one, face-to-face meetings with your employees to introduce, discuss, and assign goals. If you can’t conduct a face-to-face meeting, conduct your meeting over the phone. The point is to make sure that your employees hear the goals, understand them and your expectations, and have the opportunity to ask for clarifications.
- Call your team together to introduce team-related goals. You can assign goals to teams instead of solely to individuals. Get the team together and explain the role of the team and each individual in the successful completion of the goal. Make sure that all team members understand exactly what they are to do and whether a leader or co-leaders are ultimately responsible for the goals’ completion. Get employee buy-in and try to make the goals resonate with each person. (Book 4, Chapter 5 discusses teams in more detail.)
- Gain the commitment of your employees, whether individually or on teams, to work toward the successful accomplishment of their goals. Ask your employees to prepare and present plans and milestone schedules explaining how they can accomplish the assigned goals in the agreed-upon timeline. After your employees begin working on their goals, regularly monitor their progress to ensure that they’re on track, and collaborate with them to resolve any problems.
Juggling Priorities: Keeping Your Eye on the Ball
After you’ve decided what goals are important to you and your organization, you come to the difficult part. How do you, the owner, maintain the focus of your employees — and yourself, for that matter — on achieving the goals you’ve set?
The process of goal setting can generate excitement and engage employees in the inner workings of the business, whether the goals are set individually or by function. This excitement can quickly evaporate, though, when employees return to their desks. You, the owner, must take steps to ensure that the organization’s focus remains centered on the agreed-upon goals, not on other matters (which are less important but momentarily more pressing). Of course, this task is much easier said than done.
Falling into the activity trap
Staying focused on goals can be extremely difficult — particularly when you’re a busy person and the goals compound your regular responsibilities. How often do you sit down at your desk in the morning to prioritize your day, only to have your priorities completely changed five minutes later when you get a call from an angry customer? How many times has an employee unexpectedly come to you with a problem? Have you ever gotten caught in a so-called quick meeting that lasts for hours?
In unlimited ways, you or your employees can get derailed and lose the focus you need to get your organization’s goals accomplished. One of the biggest problems employees face is confusing activity with tangible results. Do you know anyone who works incredibly long hours — late into the night and on weekends — but never seems to get anything done? These employees always seem busy, but they’re working on the wrong things. This is called the activity trap, and it’s easy for you and your employees to fall into.
Remember the 80/20 rule? The flip side is when you consider that only 20 percent of workers’ productivity comes from 80 percent of their activity. This statistic illustrates the activity trap at work. What do you do in an average day? More important, what do you do with the 80 percent of your time that produces so few clear results? You can get out of the activity trap and take control of your schedules and priorities. However, you have to be tough, and you have to single-mindedly pursue your goals.
Achieving your goals is all up to you. No one can make it any easier for you to concentrate on achieving your goals. You have to take charge and find an approach that works for you. If you aren’t controlling your own schedule, you’re simply letting everyone else control your schedule for you.
Getting out of the activity trap
Following are some tips to help you and your employees get out of the activity trap:
- Complete your top-priority task first. With all the distractions that compete for your attention, with the constant temptation to work on the easy stuff first and save the tough stuff for last, and with people dropping into your office just to chat or to unload their problems on you, concentrating on your top-priority task is always a challenge. However, if you don’t do your top priority first, you’re almost guaranteed to find yourself caught in the activity trap. That is, you’ll find the same priorities on your list of tasks to do day after day, week after week, and month after month. If your top-priority task is too large, divide it into smaller chunks and focus on the most important piece first.
- Get organized. Getting organized and managing your time effectively are both incredibly important pursuits for anyone in business. If you’re organized, you can spend less time trying to figure out what you should be doing and more time just doing it.
- Just say no. If someone tries to make his or her problems your problems, just say no. If you’re a small business owner, you probably like nothing more than taking on new challenges and solving problems. However, the conflict arises when solving somebody else’s problems interferes with your own work. You have to fight the temptation to lose control of your day. Always ask yourself, “How does this help me achieve my goals?”
Using Your Power for Good: Making Your Goals Reality
After you create a set of goals with your employees, how do you make sure they get done? How do you turn your priorities into your employees’ priorities? The best goals in the world mean nothing if they aren’t achieved. You can choose to leave this critical step to chance or you can choose to get involved.
You have the power to make your goals happen.
Power has gotten a bad rap lately. In reaction to the highly publicized leadership styles that signified greed and unethical behavior in American corporations, employees have increasingly demanded — and organizations are recognizing the need for — management that is principle centered and has a more compassionate, human face.
Nothing is inherently wrong with power — everyone has many sources of power within. Not only do you have power, but you also exercise power to control or influence people and events around you on a daily basis (hopefully in a positive way). Generally, well-placed power is a positive thing. However, power can be a negative thing when abused or when someone acts in only self-interest. Manipulation, exploitation, and coercion have no place in the modern workplace.
You can use your positive power and influence to your advantage — and to the advantage of the people you lead — by tapping into it to help achieve your organization’s goals. People and systems often fall into ruts or nonproductive patterns of behavior that are hard to break. Power properly applied can redirect people and systems and move them in the right direction — the direction that leads to the accomplishment of goals.
Everyone has five primary sources of power, as well as specific strengths and weaknesses related to these sources. Recognize your strengths and weaknesses and use them to your advantage. As you review the five sources of power that follow, consider your own personal strengths and weaknesses:
- Personal power: This is the power that comes from within your character. Your passion for greatness, the strength of your convictions, your ability to communicate and inspire, your personal charisma, and your leadership skills all add up to personal power.
- Relationship power: Everyone has relationships with people at work. These interactions contribute to the relationship power that you possess in your organization. Sources of relationship power include close friendships with top executives, partners, owners, people who owe you favors, and co-workers who provide you with information and insights that you wouldn’t normally receive.
- Knowledge power: To see knowledge power in action, just watch what happens the next time your organization’s computer network goes down. You’ll see who really has the power in your organization — in this case, your computer network administrator. Knowledge power comes from the special expertise and knowledge gained during the course of your career. Knowledge power also comes from obtaining academic degrees (think MBA) or special training.
- Task power: Task power is the power that comes from the job or process you perform at work. As you’ve probably witnessed, people can facilitate or impede the efforts of their co-workers and others by using their task power. For example, when you submit a claim for payment to your insurance company and months pass with no action (“Gee, we don’t seem to have your claim in our computer — are you sure you submitted one? Maybe you should send us another one just to be safe!”), you’re on the receiving end of task power.
- Position power: This kind of power derives strictly from your rank or title in the organization and is a function of the authority that you wield to command human and financial resources. Whereas the position power of the receptionist in your organization may be low, the position power of you, the owner, is at the top of the position power chart. But the best leaders seldom rely on position power to get things done today.
If you identify weakness in certain sources of power, you can strengthen them. For example, work on your weakness in relationship power by making a concerted effort to know your employees better. Instead of passing on the invitations to get together after work, join them once in a while — have fun and strengthen your relationship power at the same time. (Just never forget you’re the boss. Try to keep such social gatherings as low-key as you can. If things start getting a little loose and rowdy, it’s likely time for your departure.)
Be aware of the sources of your power and use your power in a positive way to help you and your employees accomplish the goals of your organization. For getting things done, a little power can go a long way.