Organizational Goal Setting: The Key to Inspired Performance and Growth

Strategic Partner Diane Janovsky re-starts our series on Management Development with an article about one of the most important responsibilities of management, which is to establish Organizational Goals. Read on to learn more about how you can supercharge your company’s performance and growth by effectively deploying Organizational Goals.

As organizations grow, it becomes more and more difficult to align the efforts of a larger and larger population of employees. During the start-up phase of a business, communications tend to be informal and it is easier for the owner to ensure expectations and plans are clear because there are fewer people. However, adding employees adds complexity, and it becomes critical to formalize goals to be sure everyone is on the same page and “singing from the same sheet music” in order to be successful.

Organizational goals act like the connective tissue that holds together all the various initiatives, processes and tasks that make up the complex systems inside of a business. Leadership teams that take the time to intentionally create and communicate goals and ensure that rewards are aligned appropriately will reap the benefits of engaged employees, lower turnover, shared accountability and greater financial success.

The two main types of organizational goals are “Official” and “Operative”:

• Official Goals form the foundation on which Operative Goals will later be developed and deployed. Official Goals are subjective in nature and are public statements about the purpose and culture of the company. These goals include strategic elements such as Vision, Mission and Values and they set the overall long-term direction of the organization.
• Operative Goals, on the other hand, are more execution-focused and they enable the translation of strategy into steps needed to achieve success. These goals are tactical and objective in nature, are more short-term and require the use of data and metrics to drive performance.

The process to set organizational goals is a cascading effort that should be executed in this order:

• Begin with setting Official Goals. This must be done by the business owner or senior leadership team and board of directors. This is a key element of the strategic planning process and should be done for 5 and 10 year increments, with annual updates and adjustments.
• The business owner or senior leadership team then establish the Operative Goals that support achievement of the strategic goals. These Operative Goals should be set annually, with progress reviews at least quarterly, and usually monthly.
• The next step is to identify interdepartmental dependencies. This reduces conflict up front and addresses the tendency for divisional or departmental leaders to create silos and maximize their own performance to the detriment of other divisions or departments.
• With clarity on shared accountability, the divisional or departmental leaders then create goals for their specific parts of the organization.
• Finally, managers and supervisors assign goals to their teams and individual employees.

Some key success factors include:

• Using “SMART” goals: Specific, Measurable, Achievable, Relevant and Time-Based.
• Ensuring financial, operational and key performance metrics are in place, along with a regular review process that enables feedback and course correction as needed.
• Establishing team and individual goals for all employees as part of a fair and transparent performance management process.
• Making sure that rewards and recognition for goal achievement, and consequences for non-performance, are timely and appropriate.

The highest performing organizations are clear on their strategy and culture, and they use a robust organizational goal setting model to engage their people at all levels to achieve their shared vision. The investment in time and effort to set goals will yield results that consistently meet or exceed expectations.

At HPISolutions, we believe in the unlimited potential of people and their organizations. To learn more about how you can create inspired performance and growth in your company, we invite you to contact us at info@hpisolutions.com for a free consultation.