Editorial
At the beginning of every fiscal year, executives across the board spend countless hours setting goals and priorities for their organizations. Yet, role clarity, a fundamental driver of employee engagement and productivity, is declining. Only 45% of younger workers report that they clearly understand what is expected of them at work. In an environment where CEOs want to optimize every bit of productivity, it warrants a reassessment of goal setting. The following are some common goal setting mistakes and what to do instead.
Mistake 1: Treating Goal Setting as an Annual, Top-Down Exercise
Too often, leaders equate goal setting with telling employees at the beginning of the year what their goals will be. The likelihood of success is simply lower when goals are assigned downstream without employee input.
Effective goal setting is typically an iterative process which requires a two-way conversation — often a series of conversations — between teams and leaders. Employees are uniquely positioned to provide input given their intimate familiarity with clients, products and processes.
Another common mistake leaders make is adopting a “set it and forget it” approach. Research shows that more than half of employees formally review their goals with their managers only once a year or less. Frequent touchpoints are more important than ever in today’s ever-changing business environment where mercurial conditions often necessitate a revision of goals throughout the year.
Moreover, regularly reminding employees about and orienting their attention toward what’s truly important guides decision-making and prioritization at all levels. Use all hands meetings, team meetings, newsletters and other mechanisms to ensure the message sticks. Communications professionals recommend using the Rule of Seven – communicating information seven times, seven different ways for it to be heard.
Ongoing communication about goals also creates an opportunity for recognition. Celebrating wins, even if small, throughout the year drives engagement and is an especially important practice for long-term goals that include smaller milestones along the way. Recognition can be a powerful tool in helping people and teams know that they’re on track and giving them a sense of achievement along the journey. As we approach mid-year, now is a great opportunity to set aside some time to review goals and progress with your team.
Mistake 2: Taking on Too Many Priorities
When everything is important, nothing is. A lack of prioritization can lead to decreased productivity with teams spending time on low-priority tasks or getting bogged down by unimportant details. Poor prioritization can also lead to daily fire drills and a tendency to focus on what’s urgent rather than important.
A 2018 study published in the Journal of Consumer Research illustrates a phenomenon called the mere urgency effect — a cognitive bias that describes our tendency to prioritize tasks based solely on their urgency rather than their importance. In the context of work, this human tendency manifests as a bias toward focusing on tasks or deadlines that are urgent in the moment, even if they are not important or strategic in nature. Our innate hardwiring to focus on the here and now makes it even more important (and difficult) for leaders to provide clear direction about organizational priorities.
The answer is ruthless prioritization — a regular practice through which leaders help their teams identify and engage in the most important tasks and initiatives that will serve the business’s broader purpose. By making tough choices about time and resource allocation, leaders can ruthlessly prioritize what truly matters, resulting in responsible, sustainable growth.
To quote an old parable, leaders must ask: Are we hunting antelope or field mice? While a lion can easily hunt field mice, it would need to hunt and kill a lot of them to satisfy its hunger. An antelope, although harder to hunt, serves as a feast for the lion.
The best leaders understand that their teams must do a few things well instead of being mediocre at many things. Laura Mae Martin, Google’s Executive Productivity Advisor, calls it “the importance of saying no to good things to make room for great things.”
Related Article: Prioritization Is a Skill It’s Time We Mastered
Mistake 3: Failing to Effectively Budget
It’s easy to get ambitious and set stretch goals at the beginning of the year, but the best leaders pause to consider: Do we have the right resources and expertise? Do we have enough people? The right kind of people? Can the organization handle the speed at which the executives want to move? Are we overlying on hiring as a source of growth?
To ensure these questions are addressed, the budgeting process must involve multiple functions, including the People function, which is equipped to advise the CFO and CEO on hidden people costs (ex: cost of turnover or cost of onboarding new employees) that are often overlooked in a traditional P&L.
Moreover, executives engaging in budgeting exercises must consider stretch vs. strain. Rapidly evolving worker expectations mean that while employees might be willing to go above and beyond from time to time, normalizing a burnout culture is no longer acceptable. Thus, executives must endeavor to foster balance; if you’re counting on employees to consistently pull hero hours to deliver on goals, then the sustainability of the desired results must be revisited. The link between wellbeing and the bottom line is clear; therefore, accounting for employee wellbeing is as important as accounting for dollars.
Finally, a thoughtful budget is often one that accounts for unexpected headwinds. In a world of uncertainty, incorporating some budgetary buffer is simply the prudent and fiscally responsible thing to do. If budgets and timelines are too tight and every penny and resource is spoken for, the organization may find itself in a bind when things inevitably don’t go to plan.
It’s not sandbagging; it’s sensible leadership. A buffer that is agreed upon between the CEO and Board and managed and reported on throughout the year can be a powerful risk mitigation tool for both organizations and shareholders.
Mistake 4: Neglecting to Effectively Cascade Goals and Communicate Rewards
When I work with a new executive team and ask what their strategic objectives are, most of them can rattle off the top three to five organizational priorities. When I ask them how many of their front-line employees will be able to answer that question, I am invariably met with uncomfortable silence. If only executives or a handful of senior employees can articulate what the business is trying to achieve, then they’re not goals. They’re pet projects that live at the executive and board level.
Barring some exceptions like a top-secret M&A deal, organizational goals must be thoughtfully cascaded, and leaders must help every employee make the connection between their work and the enterprise strategy. People need to feel a connection to a broader purpose, and goal setting is a great time to activate that connection; this is especially true for Millennials and Generation Z’ers who prioritize purpose and meaningful work.
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Effective communication also includes providing clarity about the connection between effort and reward. If employees don’t know what’s in it for them and how the reward structure ties to the outcomes they’re driving, then leaders can expect apathy or even resentment. The best leaders ensure that employees understand how their performance will be assessed at year-end and how the attainment of company, team and individual goals will affect their performance review and their pocketbooks.
Related Article: Does Your Employee Recognition Program Need a Reboot?
Disciplined Goal Setting as a Business Driver
In a world where investors are increasingly looking for businesses that deliver value through profitable growth, not just growth at any cost, developing process rigor and discipline around goal setting is not only a fruitful exercise in improving productivity and employee engagement, but also a necessary business imperative.
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