If you don’t know where you are going, no route will take you there.
(Lewis Carroll, Alice in Wonderland, 1865)
Without defining what to be achieved, efforts can’t be coordinated and success becomes impossible, both for individuals and for organisations. As one of the most influential managers of Silicon Valley and the 1997 Time Magazine’s “Man of the Year”, former CEO of Intel Corporation Andy Grove puts it: “There are so many people working so hard and achieving so little.”
But why? Why are goals so important?
When approaching this topic with my students in class I usually start asking them why they are in my class.
Most often this leads to a bunch of quite irritated students who a) have no clue where I’m pointing to and b) who have often very surprising answers to this question.
Most students answer: “Because the course is compulsory.”
🙂 well, not really what I was looking for, but at least a starting point. Usually I continue: “OK and tell me why do you study at all?”
More irritated views, but now feedback usually comes a lot quicker: “I want a degree”, “I want to get a good job” or “I want to earn more money”.
Here I normally pause for some seconds. Is this true? Do you really want a degree? What is a good job? How much more do you expect to earn? And even more important what are you going to do with that money? After some minutes of conversation the students get the idea. It all boils down to: “What do you want to achieve?” or in other terms “What do you expect from your life?”
I’m not saying that I had this clear when being at the university. Things change over time and priorities vary. But I am convinced that if you don‘t know clearly what you want and if you don’t start putting things into action, then it doesn’t happen. Achievements don’t materialise in front of you without targeted action towards it.
Just think about it for a second.
Do you know your goals?
Do you even have a list of such goals?
Are you actively pursuing these goals?
Do you have a plan to get there?
If the answer is no, then why not. Most likely because you haven’t thought about it yet. Remember, having a full time job plus friends and family can easily eat up a lot of your time and energy. There are so many people whose life became completely passive. They run their routines and schedules, they take care about their beloved and they enjoy some entertainment – day by day.
Don’t get me wrong, if that’s what you want, completely fine, but then don’t look back somewhen and complain that you always wanted to do “X”. Netflix will not help you to get there.
Studies have proven that people who write down their individual goals are 42% more likely to achieve them. (Dr.Matthews, University of California, 2018).
So don‘t wait, once you’re through with this post, just sit down, think about what you want to achieve, take decision and write it down. Already by this you will have significantly improved your chances 🙂
Now that you understand now how important goals can be for any individual, the very same goes for companies. Well defined goals can do magic to a companies success.
The best book I ever read on goal setting is „Measure what matters“ from venture capital legend John Doerr. In this magnificent piece of management book Doerr explains the fundamentals of goal setting and how they have helped companies like Google to become the technology behemoth they are today.
As Doerr points out in his book, a rigorous goal setting muscle will improve any company’s ability to execute: “Ideas are easy, execution is everything.” (Doerr, Measure what matters, 1998)
Many companies, especially big corporations, often suffer from a lack of good goal setting. But it‘s not like in the case of individuals described above. I strongly believe that every company on earth defines goals on a regular basis.
But companies often face two other fundamental „goal-problems“. Either they define just way too many goals, without any consistent alignment throughout the whole company, or they suffer from weak goals, being unable to measure precisely the level of achievement and progress towards them.
Problem 1 – Lack of overall priority and alignment
Company goals are often spread over various teams, areas, divisions, profit centres, subsidiaries, etc…, without being well aligned and without being overall congruent.
Example: Division A, Division B and Division C all define their own goals.
They define yearly/quarterly goals for their area of responsibilities but they do it without any alignment between them. In this scenario there is no overall agreement on what is the overall highest priority for the company. Is the prio1 goal of Division A more important than the prio1 goal of Division B or C?
Many companies run yearly goal and budget definition processes on senior executive level, but still fail to decide on this important final piece of prioritisation. Board members and senior executives sometimes tend to „live alongside each other.“ (Nadler, HBR, 2004) They can develop a spirit like „as long as the other doesn‘t try to tell me how I organise my area, I‘m not going to tell him neither”.
This kind of corporate „non-aggression pact“ is super dangerous. Without clarity on overall priority, the different teams will immediately start competing for resources, especially for the best people and size of funding. Maybe they don’t actively work against each other – which is already a good achievement – but by the nature of this management style, they will do all they can to reach and push individual unit goals and by this jeopardising or at least impacting the goal achievements of their colleagues.
As resources are always limited, the teams will always reach a point in time when the scarcity of the resources becomes a problem and decisions are to be made. Now a difficult battle begins and a lot of corporate politics gets into action.
When things get complicated
Which project to be stopped? Who gets the best resources? Whose funding gets cut?
– 1. Division: Yes no problem, but if you stop my project than we are not able to achieve our sales targets.
– 2. Division: But if you stop my project we are not fulfilling regulatory requirements which can result in personal liability of our board.
– 3. Division: But my project is defined as strategic thus you can’t even think on reducing our budget. And so on, and so on…
These kind of decisions are always difficult, but they are even more difficult in the middle of a heated debate, at a point of time when significant moneys have already been spent in the different activities.
Clarity on overall company’s priorities and objectives can help to get these different teams aligned and allow easier decision making.
If you become a senior executive someday please make sure that you and your executive team define clear priorities, they will work as a compass for your teams, giving them orientation when they on their own need to take decisions.
Goals work only well when being aligned from top to bottom and from left to right, with all teams on the boat rowing in the same direction.
Problem 2 – Have we actually reached our target?
The second typical problem in corporate goal setting is not being able to measure achievements. Pointing here to Peter Drucker, one of the most famous management thinkers of all time „if you can’t measure it, you can’t manage it“. (Drucker, The effective executive, 1966)
In my own experience many people and teams have a natural tendency to dislike clear and tough measuring of their results. Having the goals formulated in an open way with some room for interpretation seems to be more preferred, especially when these results are bound to financials and bonus systems (Anteby & Chan, HBR, 2018).
If you need to debate and negotiate at the end of the year whether a person or a team has achieved the target, you didn’t do your job well as a manager.
Be like the sales guys
Usually the function doing this best and who can serve as role-models on precise goal setting are our sales people. Have you even seen a sales-guy who was not 100% clear on his numbers? Any sales-organisation where goal achievement couldn’t be measured in a 100% precise way? In goal setting you need to be like the sales-guys.
Clearly defined and quantifiable targets are essentially important to steer team behaviour and to learn. Understanding where and why your teams underperformed is the fundamental basis for understanding opportunities of improvements and how to get better.
If your goal definition is crisp and clear, avoiding wishy washy definitions, then you are already half way through. Only thing left to ensure is you don’t fall into the trap of “let’s not be too aggressive”.
Putting deadlines with more time for project completion or pushing for lower number targets in order to get an easier 100% achievement is something you can’t tolerate as a manager.
Of course goals can be very aggressive and sometimes they seem even overwhelming at first look. Nobody likes to start an endeavour not being sure if you make it. And being in the middle of the journey, seeing that you and your team have fallen behind plan and might not reach the set targets is tough. But defining ambitious and measurable targets is a must, it’s what you owe to your company, it‘s what let‘s your team stretch and become creative, it’s what will make your company better at the end. It‘s what will let you succeed against your competitors.
Or how the racing sports legend Mario Andretti points it: “if everything seems under control, you are just not going fast enough”