Tuesday, August 16, 2011

You Can Only Eat Just One...

We're heading into goal reviewing and goal-setting season. It's time to start asking questions and get the teams focused. If you're not heading into goal-setting season, I hope you realize that if you wait till November and December, the first 6 months of the new year are already determined; any new efforts will only affect the last 6 months and that's the results you're trying to plan.

In the goal reviewing, please ask these questions:

  • If we achieved our company goals, how well did we do on the subordinate (e.g. departmental) goals? 
  • If we didn't achieve our company goals, how well did we do on the subordinate goals?
  • If we achieved either the company goals or the subordinate goals, but not both, what made the disconnect between the two sets? What knowledge are we missing?
One thing that could be missing is the understanding that too many goals dilutes the efforts. What happens when you set 3 company goals? (In some companies that practice Balanced Scorecard, this would be a small number.) The next level--e.g. department managers or VP's--will create 3 goals or projects to support each of the company goals. In the graphic below, the company goals are yellow rectangles. The department goals are blue.
Can the department managers or VP's accomplish their goals by themselves? They'll need help from their peers and the rest of their departments. In this case, the department heads are trying to allocate their resources for 9, 18, 27 or more projects and goals. 

Take it to the next level and you now have an exponential growth in projects and goals. The person at the bottom of the organizational pyramid says, "I'd be glad to help with your project. I have time between 9 and 12 on October 23rd of next year." Is it any wonder that most companies don't achieve the success they're attempting?

It's even worse if you don't do any mid-year or quarterly reviews. People are so busy doing their normal work, they can forget to put much effort into achieving something new and different.

If you must have a goal, just have one. Keep everyone focused on it. Determine how everyone contributes to it and their line of sight by achieving one goal they can personally influence and that supports that company goal. At best, pick a customer-centric goal. If it's financial, I suggest one like Economic Value Added (EVA) that combines the income statement and the balance sheet. It's a metric that has strong correlation to the enterprise value (i.e. what the company is worth). It's a metric that everyone can influence.

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