In Performance Management, “Well Begun Is Half Done”

Each year March to April, is an unusually busy time for organizations. Apart from year-end business activities, everyone is in a rush to complete the annual performance reviews. Of late, there have been debates on whether organizations should have these performance reviews at all.

I think we are debating the wrong end of the process. When it comes to performance management, it is what we do at the beginning of the year, that matters most. I am talking about the goal / objective setting process. 

Typically, goal setting for the new financial year happens right after the previous year’s performance review. While the latter seems to get over-whelming organizational focus, goal setting is more like a check-box exercise – “let us fill something in the goals sheets now, we have the entire year to edit it”. 

That is where it all goes wrong. A classic symptom of this problem is managers not being able to have objective conversations at the time of the review – because the goals and measures were never thought through in the first place. 

I think goal-setting is as important (or perhaps slightly more so) than performance reviews. 

Let me share an example.

This happened at two of the organizations I worked with. Both organizations wanted to diversify their product lines. This resulted in a goal for the product team to create new products. However, it completely slipped between the cracks that a commensurate goal had to be set for the sales team, to achieve their sales revenue across product lines. As an outcome of this, while the product teams created new products, the sales teams did not focus on selling the new products - which had not been established in the market yet. The business goal was never fulfilled because the goal-linkage between product and sales was missed.

We observe this in organizations all the time. Technology is given some goals, but they struggle to get the budgets cleared by finance in time for a smooth implementation. A service experience is promised to the customer but inter-departmental differences prevent the delivery of that experience to the customer. Often, we get this feeling of departments working in different directions within the same organization. All of these are outcomes of not putting in adequate effort in the goal setting process.

There are several reasons why goal-setting fails to get the attention it deserves:

1.     Leaders fail to realise the far-reaching consequencesof not focusing enough on the goals

2.     Leaders assume (mistakenly)that setting goals the right way, is avery time takingprocess

3.     Leaders assume that peopleare smart, and they “know what needs to be done”

Goal-setting can be managed realistically by defining the right timeframe for which goals need to be set and revised. This depends on the nature of business and stage of the organization; e.g. it can be quarterly or half-yearly. It is not necessary to set the entire year’s goals at once.

In my experience, the time required for an organization with 500-800 employees to complete the goal setting exercise, is approximately 5 days. It takes about 2 full days for the leadership team to define the business goals, their individual goals and calibrate interdependencies across functions. The cascade by the leadership team and managerial levels takes another 3 days. If done with planning and intent, that is all the time goal setting needs.

The other assumption about people automatically knowing their job, is often untrue. Start-ups are particularly prone to this. When the organization is small, the employees interact with each other frequently. Hence, they might know their goals and interdependencies without a formal process. But that is not true when the organization starts growing – and the line of sightblurs.

It was like what happened in a very fast-growing organization I worked with. At one point in time, the employee satisfaction scores were falling. We learnt that the reason was that people failed to see a connection between the work they were doing and the larger organization goal. It took a focused effort from the leadership team in creating a connection between individual goals and organizational goals, to address the situation.

This is what I mean when I say that we often fail to realise the far-reaching consequences of not giving adequate attention to goal setting.

While building organizations and businesses, we often focus on the end. Year-end business results, year-end performance, year-end numbers. We live by “all is well that ends well”. 

Unfortunately, that happy ending is very unlikely unless we focus on where and how we start. And when it comes to goal setting, it is all about “well begun is half done”.

#BuildingOrganizations #SaurabhSpeak