It is not easy to agree on goals with employees in such a way that they are actually implemented and achieved. During my time as managing director, I also had to learn that the hard way.
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How most companies set goals with employees
Top-Management develops a strategy based on the company’s vision. Then goals are derived from the strategy: strategic, tactical and operational goals.
These goals are then broken down into divisions and departments. Then the managers of these divisions and departmens set these goals for their employees or – which is much better – agree on goals with their employees.
The idea behind
Goals help the company to ensure that everyone – the employees as well as the bosses – go in the same direction.
So talking about goals helps to clarify on where to go. However, they must be the right goals and it is also important how everyone deals with the goals.
Before defining goals, we need to know “why”. Therefore: It all starts with the corporate vision and corporate strategy.
If the “why” is not clear, if the corporate strategy is missing, then the goal is nothing you can grasp.
“Our goal for next year is to increase sales by 30%.”
“OK and why? Why is it 30%? “
“What do you mean “why”? Because I say so! “
Why should sales be increased by 30%? Or: Why should a new product be developed? The boss should be able to answer these questions before breaking down goals.
Goals bring focus, but…
Goals bring focus, but they must not restrict the big picture and flexibility too much. This is of course a balancing act.
I believe that if the achievement of a major goal is far ahead in the future, the goal should be formulated vaguely.
“John, how much money can we make with our biggest customer, Siemens AG in 5 years and especially with which product groups?”
“Uh, I don’t know, boss!”
“But I need the numbers. How else am I supposed to draw up a solid plan and budget for the next 5 years?”
Set goals with employees correctly
How detailled should the goal be?
That is nonsense! Why should anyone describe the exact achievement of goals in detail, which will arise sometime in 5 years. Until then, a lot can happen.
However, this does not mean that goals and measures should be formulated vaguely in principle. But on the contrary. The shorter the deadline for a goal, the clearer the goal must be formulated.
I really like the approach used for agile project management. This is characterized by adaptive planning.
So instead of making a comprehensive, detailed plan at the beginning of the project, regular planning meetings take place at short intervals. In this way, you can react flexibly to unforeseen or unpredictable changes.
So we need definitely a big goal, but it is not specified in detail. But the short-term goals and measures for the next 2-4 weeks: They should be clear, described in detail and agreed upon.
Similarly, you can deal with goals in a very volatile environment – even outside of project management.
Example for adaptive planning
You have defined an annual goal, e.g. the sales or net income of the company. Based on this you have roughly defined sub-goals and measures.
Once a month, you can discuss the sub-goals and measures for the next 30 days with your employees. This means: for 29 days, the boss and employees focus on short-term achievement of goals and on the measures to be implemented.
And one day a month, you take the time to talk extensively about setting and agreeing on goals. Have you and your team achieved your short-term goals?
If not – what was the problem? Did new things come up? Do the goals need to be adjusted? This one day is used to stay flexible, adjust the strategy, share a bird´s-eye view and to adjust the planning to achieve your big goal.
A monthly rhythm may not be the right time frame for a large car company, but for a small, medium-sized company for example in mechanical engineering it can make sense.
In this way, you have regular conversations with your employees, you can adjust goals together. You focus on short-term implementations, but you do not neglect new ideas, impressions and necessary goal adjustments.
Unfortunately, only very few companies do this. Many really think that it is enough to formulate the goals once a year and then check what you have achieved at the end of the year. In a volatile environment, this is not the way to go.
My 5 tips for how to set goals with employees
Here are my 5 most important tips for your goal setting with employees.
1. Goals must be agreed upon!
If you as the boss just simply set the goals for your team, is not a good idea. You wouldn’t get any commitment from your employees. Nothing will be gained from this. There will be no motivation to reach the goal.
M;uch better is: If you want to have actively thinking, independent employees, you have to discuss and get your team to agree on goals. You have to ask, discuss and convince, not just set goals.
2. Set verifiable goals
A goal always has a deadline. That’s a must. It is also beneficial if the goal is measurable. Then it’s easy. But often goals are not measurable. Nevertheless, the goal should be formulated in such a way that it is crystal clear for everyone involved whether the goal has been reached by the deadline or not.
3. Goals need space!
Those who lead with goals must not micromanage. Anyone who agrees on a goal with his or her team agrees on who and what and when, but not on how.
Well defined goals describe a desired outcome, but leave open how it can best be achieved. The employee decides which measures must be taken to achieve the goal. It should be their creative freedom.
4. Focus only on a few goals!
There is no point in agreeing on 20 goals with your employee. You get bogged down. Managers and employees should consider a maximum of three goals and agree on them.
5. Document goals and check them regularly!
If you have agreed on goals with your employee, document them and check them along with your employee regularly – for example, once a month or once a week. Goals only make sense if you check their achievement regularly.
How to deal with a demanding boss when goal setting
If you’d like to know how to deal with a demanding boss when agreeing on goals, watch this video or read the following post:
How to deal with a demanding boss
The inspiring quote
“You have to set goals that are almost out of reach. If you set a goal that is attainable without much work or thought, you are stuck with something below your true talent and potential.”