Goal setting is a powerful tool for business success. Here is why:
First, you and your employees engage in a great deal of activity. Without specific, short-term, measurable goals, this activity is unfocused. Add such goals, and you influence both your and your employee’s activity. You direct it. You channel it.
Second, people love competitions and games. By setting goals and measuring progress, you make work a competition. You make work a game. This will motivate your staff.
Third, you change what you measure. You want to change your and your employee’s habits, and motivate each of you to spend your activity on the things that matter. By choosing a goal and measuring progress toward that goal, you will change behavior.
Fourth, you provide a yardstick to measure choices against. Once you have specific, measurable goals, you give yourself a powerful mental tool for decision-making. When someone wants you to spend time or money on something, you can ask whether this will help you meet one of your current goals. If not, it is easier to say “no”.
How, then, does one go about setting goals?
Set Goals That Matter. If goals are going to change your and your behavior and channel your activity, the goals had better be ones that really matter. Many companies get into trouble because they set goals that do not matter, and then their activity is directed into channels that do not really help accomplish long term strategic objectives.
Therefore, goals must be things that, if accomplished, will move the company toward accomplishing its long-term strategic objectives.
When I was hired as Traffic Manager by McDevitt Street Company in Charlotte in 1989, part of my job was to manage the mail room. McDevitt Street’s headquarters in Charlotte took up two, four-story buildings off the Billy Graham Parkway. McDevitt Street also had permanent satellite offices all over the country – Orlando, Nashville, Dallas, several in California. About twenty satellites altogether. There was a lot of mail, both between the workers in the home office and among workers in the home office and workers in the satellite offices.
When I took over, one of the biggest problems with the mailroom was misrouted mail – every day, multiple items of mail when to the wrong satellite office and had to be re-routed, costing days that were, in some cases, valuable. I could have yelled and screamed and threatened and created an emergency, and that would have gotten the workers attention for a short time, and misrouted mail might have temporarily declined. I did not. Instead, I put a poster up in the mailroom. On one half, it said “Days With No Misrouted Mail”. On the other half, it said “Most Days with No Misrouted Mail”. I changed the numbers every day. I told the group that our goal was ten consecutive days of no misrouted mail. Once we hit that goal, I told them we should shoot for thirty. When we hit that, I asked them what the new goal should be.
A year and half later, when the “Consecutive Days Without Misrouted Mail” hit 250, the President of the Company came to the mailroom and personally thanked the mailroom workers for a job well done.
Set Goals That Are Achievable. To really be a goal, one needs to be able to achieve it within a determinable time period. Otherwise, it looses its immediacy and becomes a sort of long-term objective. Tom Mendoza of NetApp says 90 days is the right time frame. That’s a decent rule of thumb, but one can set thirty-day goals or even annual goals – the key is to cause the goal to be immediate enough that it affects daily decision-making,
Set Goals That Are Measurable. If it’s not a game, why are we keeping score? Goals are only goals if progress toward them can be measured, and you can objectively determine success. “Dress Better” is not a goal – it cannot be measured and success cannot be determined subjectively. “Sell more” is also not a goal – even though an increase may be measurable, one doubts if selling $0.01 “more” is really success. To create that competition/game excitement and really change behavior, your goals must be measurable.
Set Goals That Reward. Many people will tell you that every goal should not only be achievable and measurable, but also that each goal must have a specific, financial reward tied to success. This overstates the case. Napoleon said “A soldier will fight long and hard for a piece of colored ribbon”, and he was right. Often, recognition and appreciation are enough to create change. Rewards come in many flavors – financial is just one tool among many.
There is an old army saying “Inspect what you Expect”, meaning that only those things that are measured will change. Business owners will be amazed by the results if they can master the challenges of setting goals that matter and measuring progress toward those goals.
Have a goal-setting success story: share with the group by commenting. Need help setting goals and measuring progress? Give us a call!