Goal-setting is one of those hallowed practices that belong in every leader’s arsenal. We’ve all heard that people who set goals are far more successful than those who don’t. And every well-run business has a policy and a practice of setting annual goals for its various operational departments. It is a well-established, almost universally applied practice.
There are times and situations where it may be appropriate to do something else.
Let’s unpack this.
The practice of goal-setting involves a couple of separate, yet related, processes. First is the selection of the categories of the goals. And second is the creation of the actual number to be achieved.
Let me illustrate from the world of sales management. In our management system, we recommend that sales managers create no more than five categories of goals for the sales team. So, “increasing sales”, “selling more of X product,” “gaining new customers,” etc. would all be categories. They identify the type of performance that is important to the company. Once the categories are determined, the next step is to assign a number to each. So, “Increase sales by $100,000,” or “Sell 20% more of X product,” or “Gain 10 new customers,” are all steps toward the final, specifically delineated, measurable goal for the year.
Of those two separate and distinct steps, the first has more power to transform and focus the company than the second. In the first step, the executive is challenged to identify the five most important things the company can accomplish in the coming year. This is often difficult, tortuous work that forces the executive to confront several critically important elements.
For example, a company mission or vision statement can light the path ahead, and put borders around the possibilities. If your mission statement is that you are going to be the largest supplier to gas stations, for example, that would preclude use for creating a category that said, “increase sales to restaurants.” It just doesn’t fit the mission statement.
Determining these five key categories also requires a clear understanding of the strengths and weaknesses of the company, the opportunities in the market, and the intricacies and challenges of the market and economic situation in which the organization finds itself.
This annual, real-time SWOT analysis, coupled with an overriding vision and mission statement to guide the way forward, are the essentials that combine to pop up to the surface of those most important categories.
It’s tortuous, critical work because it forces the executive to sift through all the possible ‘good’ things to do, and instead, to determine the five ‘best’ things. In other words, to identify, and then legislate, “what to focus on first.”
In our economic environment, potential opportunities and ‘things to do’ continually confront us like a swarm of gnats in the middle of a field. Any half-way effective executive or sales professional is overwhelmed with too much to do and not enough time in which to do it. The issue isn’t identifying new opportunities, the issue is determining which of the opportunities that present themselves are worthy of the investment of our time.
Mindlessly chasing after every opportunity that presents itself and tackling every task on our ‘to do’ list is a recipe for exhaustion, burnout, and ineffectiveness. The effective executive and sales professional in today’s world understands the need for a set of guidelines to keep him and the company on the path to effectiveness and success. Ultimately, one of the purposes of a goal is not to meet the goal, but to focus behavior on the result. We all need a set of things to ‘Focus on First (FOFs).’
These ‘FOFs’ are produced by an annual exercise and can vary by the level, geography, and function of the group. The ‘FOFs’ for the sales department, for example, may be significantly different from those guiding Accounts Receivable. The ‘FOFs’ for one branch may differ from that of another branch.
Regardless, the function of the FOF is to provide guidance to each individual in the organization in making daily, maybe even hourly, decisions on how to invest his/her time. Given the choice of several possible things to do, the FOF-guided individual asks, “Which of these fits into one of FOFs,” and pursues that.
‘FOFs’, then, arise out of an annual SWOT analysis, are illuminated by the company’s vision and mission, and function to guide everyone in the most effective use of his/her time. FOFs guide the individual in determining the quality of his/her investment of time. There are times, places, and situations where that may be enough. New organizations, for example, will find it beneficial to create FOFs to guide the investment of time and assets, as will organizations in highly unstable environments.
The goal-setting process becomes more difficult when we layer the second step – articulating a number onto the FOF. So, when we proceed from “acquire new customers” to “Acquire 10 new customers” we turn the FOF into a goal. Now, we add an element that speaks to the quantity of performance.
There are times and places when achieving those numbers is essential. For example, with a new salesperson in a new territory, acquiring just one new customer is probably not going to guarantee continued employment. He/she needs a greater quantity of performance. When there are loan payments to be made, commitments to vendors to keep, and gross profit that must be achieved to keep the business viable, for example, the attainment of certain minimum numbers is essential.
The difficulty is that, while FOFs arise out of strategic planning and time management planning on the part of the company, the numeric element of goal-setting rarely does. Rather, if often proceeds from a whole set of other variables that are far more subjective, aren’t nearly as well-founded as the FOF, and are just as likely to de-motivate a person as it is to motivate him.
While there are many situations where a numeric goal is called for, consider the possibility that, in your situation, the purpose of the goal is not to meet the goal. The purpose of the goal is to shape and influence behavior by determining what to focus on first.