Goal Setting as a Driver for Excellence

There are no favorable winds for those who do not know where to go” Seneca

According to the 2013 Global Performance Management Survey Report by MERCER, “Setting SMART Goals” is the third skill that would have the most impact on an organization’s overall performance, only preceded by “having candid dialogue” and “linking performance to development planning”.

The MERCER report also found that 62% of company’s managers are only “moderately skilled” in setting SMART goals, 29% are marginally skilled and only 9% are “highly skilled”. According to the report, “setting SMART goals” is the second most important “driver of organizational impact”, only preceded by “linking performance to development planning” suggesting that goal planning is intrinsically linked to the ability to drive organization impact and excellence.

If we accept this premise, how can organizations and leaders improve the way they use SMART methodology? How can SMART goals be connected to the higher level planning methodology, the Planning Conversation? What happens after goals have been set and planned? What is the connection between Goals and Excellence?

Looking at the Goal Setting process from a broader perspective than methodology in order to define and describe the goals is key in understanding that setting goals is not just a tool-oriented process. Rather, Goal Setting is a comprehensive agreement and understanding between the organization, leaders and people around purpose and the ways to achieve that purpose.

A basic and purposeful performance cycle looks like Figure 1. This shows a basic three-phases cycle that revolves around an organizational purpose. Planning means defining and establishing goals that translate the long-term aspiration of the organization (purpose) into short and medium term deliverables (oftentimes, one to three years goals). Once the Plan has been defined, then comes a period for implementation and evaluation. The important thing to consider is that when the organization has a clear purpose and communicates it to its people, planning becomes a more straight-forward process of defining the actionable elements of that purpose.

FIGURE 1

Within the “Plan” phase of the basic Performance Cycle, Figure 2 shows how the Plan Phase looks in a highly productive Planning Cycle. It is comprised of three stages:

FIGURE 2

The Goal Planning Conversation

This is one of the most critical components of Goal Setting. This conversation occurs between leaders and people. The significance of this conversation is that it allows the organization, through its leaders, to set clear expectations of the desired results (actionable purpose) and the ways to achieve those results. These are two basic components in a comprehensive and well-designed performance management system: the “what” people will do (goals) and how they are going to it (competencies).

When Goals are defined without having this Goal Planning Conversation there is a disconnect between what employees are doing and what the organization expects them to do. Also, this disconnect creates a lack of alignment, making individuals’ contributions to the purpose of the organization more difficult to measure.

The most important element of the entire Planning Phase is not the use of SMART methodology per se, but the actual conversation between people and leaders. This is the place where employees may clarify what is expected of them, the resources they will have available and the opportunities for them to stretch their current level of skills. One interesting result of the Goal Planning Conversation is that it creates clear accountability between people and leaders. People better understand what they have to deliver, and the leaders provide the tools, knowledge and opportunities for people to use their potential to deliver results.

Organizations, leaders and people are busy. However, the benefits of having an early planning conversation absolutely outweigh the costs of investing few hours in doing so.

The Goal Planning Setting

Once the Conversation has taken place, it is necessary to transform the conversation into achievable Goals using the SMART methodology. Below are the basic guidelines to accomplish this:

1. S – Specific:

Goals need to be very focused and specific. They are specific because they need to convey at least two main ideas: 1) the specific contribution of the employee defined using an action verb and 2) the expected results to which these actions will contribute.

1. M – Measurable:

Goals should be written in such a way that they allow defining indicators and target for their measurement. Not only that, but they should include indicators and targets that allow continuous monitoring of results, timely decision-making and final evaluation of results.

1. Achievable:

Intimately related to the “R” of Realistic, employees need to take into account the possibility of achieving the Goals and not set themselves up for failure. It is critical to know the level of proficiency and capacities to perform certain tasks. This allows an understanding of what is feasible, but also allows individuals to be aware of the limits that could stretch their current level to bring them to new levels of learning.

1. R – Realistic:

Goals should be realistic. They should include indicators and targets that are possible to measure and provide enough information about accomplishment of the goal.

1. T – Time Bounded:

Goals need to include dates in which they will be accomplished. This allows ongoing monitoring to decide whether they are meeting their targets. If goals are not time bounded, people could not make decisions in order to implement timely changes that ensure successful accomplishment of the goals.

The Continuous Feedback and Monitoring

Feedback is one of the most important tools that one must utilize in order to achieve excellence. However, one must go beyond the feedback stage and include monitoring in their goal setting processes. Providing feedback to people is not a one-time opportunity. Rather, it is a continual process to positively reinforce the strengths and skills that are contributing to achieving the goals as well as to identify areas that need further development and improvement and a willingness to work on them.

Feedback allows leaders and employees to identify partial accomplishment of the goals through the performance year. It is easier to make decisions and take action in a timely manner than leave decisions for the end of the project when, most likely, it is already too late to make changes and correct the course.

Constant Feedback and Monitoring are key in maximizing the potential of employees and giving them the opportunities to explore and use their talents.

Final Notes

Goal Setting is not a standalone driver for excellence, but it is part of a system in which cogs are working together to productively deliver the results that will bring the organization to the accomplishment of its purpose. Leaders and people work together in a continuum of performance in which planning is a critical piece to clearly set expectations, rationales and ideas.

The dialogue that occurs between leaders and people is the foundation of the goal planning, and the SMART methodology provides a clear approach to define and structure those goals. Continuous Feedback and Monitoring support the process of constant learning, improvement and change, whenever necessary. If there is clear and continuous feedback (positive, constructive or negative), then it is possible to work in areas that require more attention and concentration. Hence, the final evaluation of performance becomes an easier process, because leaders and employees are already synced around the work that has been done throughout the year.

• Does your organization have a clear Goal Setting Cycle?
• Is your organization providing a clear environment that promotes planning conversations between leaders and people?
• What needs to be done in order to achieve a highly productive planning cycle?
• Do you have your goals clear to contribute to the purpose of the organization?

If you have any questions, leave them below and I am more than happy to help!

About the Author: Enrique Rubio is an HR Professional at the Inter-American Development Bank. He is an Electronic Engineer and a Fulbright scholar with an Executive Master’s Degree in Public Administration from Syracuse University. Enrique researches and writes about leadership and HR and seeks to explore the overlaps of productivity and leadership in the business and non-profit world. Enrique is also a competitive ultrarunner.

Twitter: @erubio_p