Goals are a hot topic when people are setting their first performance measurement process. It is common to wonder when exactly is the right time to set goals? Let's look at some aspects of this problem.
Difference between Goal and Goal
The Objectives of a business are those written parts of a detailed long-term vision where we define the results we want to achieve and by what date. The Goals are similar but can be considered smaller steps aligned with the details and deadlines of the larger Goals. An organization advances towards its fundamental Goals, but that path is made up of different Goals that must first be achieved at both the individual and team levels.
Define Goals
Setting Goals is key to long-term achievements and provides a conceptual framework for the Goals design process. For example, "Talk to customers" can be a Goal as it is important as the first step for the organization to set the course of its strategy and its Objectives, which the business must achieve in a term of five years. Including employees in the Goal setting processes is also crucial to generating greater commitment on their part to achieve them. Strong but realistic goals force the company to achieve high standards.
Realism to set Goals
Goals can backfire under certain conditions. For example, people assigned to reach overly bold Goals may become lax, take shortcuts, or incur higher costs trying to meet them. Conversely, a Goal that is too easy may not generate enough enthusiasm to motivate people. A Goal that is too out of reach may overstretch the deadline and perhaps fail to meet it. The Goals set as milestones along the path to the Goals are crucial to increasing the chances of achievement.
Goals are quantitative
Achieving Goals is part of the activity and effort that moves a business forward. Some examples include
- Establish and achieve weekly or monthly sales quotas, Define the quarterly budget or What should be the number of production per unit in this month
Monthly Financial Goals, for example, are present in budgets and are shared to involve all sectors in reaching the company's Annual Goals, especially with regard to revenue, operating expenses, investment plans, projected profits, etc.
Settings
Some Goals may need to be routinely achieved to maintain progress towards the company's Goal. For example, each salesperson on the sales team must achieve a Goal consisting of a minimum of sales per day, week or month to meet the semester Goals. When sellers do not reach the Goals, an adjustment to the Budget Goals is necessary, which can be critical to maintaining a sense of reality.
In the performance measurement process you set your Goals. This fact alone has a critical impact because it mobilizes those responsible to do everything possible to achieve them. When you don't set Goals, that valuable impact is lost.
Let's describe a typical performance measurement process in the following steps:
- Set the Goals you want to achieve. Select the metrics to monitor those Goals. Report and interpret what the metrics are reporting. Decide what actions to take to respond to each metric.
At what step should the Goals be set? Most people fix them too early. And that's a problem, because some critical information that you may need to set the Goal doesn't exist yet.
Should You Set Goals when Goals are Set? Not.
At the time of setting Goals, we rarely know exactly how we are going to measure them. It is advisable to work with the Goals first so then the Goals are more easily determined. For example, if you have a difficult Objective to measure such as "Increase customer loyalty" you can break it down into short and quantifiable Goals such as "Average number of times the customer returns."
Should you set Goals when selecting metrics? Not.
Even when we have decided which metrics we will use, it is still a guessing game to set a Goal directly. Often we still do not have information about the current situation. If we don't know where we are starting from, we won't know what we can aim for.
Should You Define Objectives when reporting metrics? Not.
It is important to include Partial Goals in the graphs of our performance metrics, in order to visualize the gap between how business is doing and how we would like it to do. Creating a first graph on the evolution of the metrics is useful because it gives us an idea of where we stand. We need to see this first graph, where we start from and what are the partial Goals so that later we can decide on how to determine the Goal.
