Setting
effective and achievable business goals is at the heart of any good business
goal setting strategy. While many people say they want to achieve success in
business, not everyone has the wherewithal to follow through and do so.

Determining the
right direction for a business requires setting ambitious and inclusive—yet
attainable—goals. If a business’ leadership team aims too high, it’s likely to
create frustration, lost opportunities and unhappy clients, and if goals are
too narrow, lagging areas are likely to affect the entire company before long.

Setting
comprehensive yet achievable goals may not be easy, but it’s necessary if a
business is to grow. Here is my top 10 list of the ways I’ve seen goal setting
go from ordinary to something useful in aligning, enabling, and accelerating
individual and organizational performance.

1. Align to Company Mission – 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 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. Understand Your Contribution – 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. Motivate, Not Discourage – 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. Be Aware of Set Backs – 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.
   Know 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.

Exceptional
leaders understand that goal setting is not a one-time event; it is an ongoing
process that requires commitment, resilience, and adaptability. By setting
SMART goals, aligning personal and professional aspirations, developing action
plans, tracking progress, and staying motivated, leaders can unlock their
potential and achieve extraordinary success.