A commit goal gives your team a clear target to aim for, while a stretch goal gives your team an incentive to go above and beyond.
A goal setting technique designed to provide predictability and generate excitement and upside potential is setting commit and stretch goals. The commit goal is a promise of what will be delivered. It’s non-negotiable. Missing it has big consequences. The stretch goal is something for the team to aspire to. If they reach it, the rewards can be really large.
Let me walk through an example of what this can look like. Let’s say we have a corporate profit target of $150 million. Each business unit is given a portion of that target. And when you add those up, it’s $155 million because we want to have a hedge in this situation. Those are commit numbers. One business unit has a $40 million commit and a $45 million stretch. Let’s say at the end of the year they come in at $41 million. Well, they get 20% of the extra bonus that’s available because they got one million of the five million possible.
Let’s say another business unit had a goal of $50 million as their commit. They come in at 45 million. It’s a bad year. No bonuses and poor reviews are going to follow in the performance management process. Another business unit has a $27 million commit and a $30 million stretch. They come in at $32 million through some really good luck and a lot of hard work. That team should get 166% of the possible bonus if it’s an uncapped bonus structure.
The final business unit has a commit of $38 million and a stretch of 45 million. They come in at 40 million and they get a 28% of the available bonus. The corporate result of this entire goal-setting structure is coming in at $158 million on a corporate commit of 155 from this business unit.
When you look at setting these commits and these stretches, it’s pretty clear that the team knows what they have to hit with the commit. They understand what the consequences are. Having the stretch gives them that incentive to work even harder and deliver above and beyond.
One thing I invite you to do is to create a commit and a stretch for all major metrics for your organization. Ensure there are consequences for missing the commit. Make sure there are rewards commensurate with hitting the stretch. By laying out these goals and letting people know broadly across the organization what the commit and stretch are, as well as the consequences and rewards, you can drive exactly the behaviors you want to hit your higher level goals.
Want to learn more about setting business unit goals? How about taking an entire course on it? Check out the video below to learn more about the course and get started. Or you can go directly to the course and start learning how to set business unit goals. The entire course is available at LinkedIn Learning. Enjoy!
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Sitting on the balcony of our apartment in New Westminster, Canada, I hold my baby boy and reflect on the past few months. After everything that happened, I’m amazed that I made it through without breaking down mentally. I recall founding a new business while my girlfriend navigated a challenging pregnancy, and my father fought terminal cancer.
My emotions were erratic, and I felt pulled in different directions, trying to be present for my girlfriend, dad, mom, and clients all at the same time. Things spiraled downward, and my father passed away shortly before the birth of my son. I was overcome by a mix of grief and joy, and at the same time, we relocated from Germany to Canada amidst the start of a global pandemic.
This was in the Spring of 2020, and I realized that a few mindset shifts helped me navigate these challenging months. Adjusting your mindset allows you to focus on thinking smarter, more complex, with more ingenuity, and finding multiple paths to success. Let’s explore four mindset shifts that will help you succeed.
Embrace JOMO, because YOLO
The first shift is from FOMO to JOMO. The fear of missing out is that feeling when everyone around you is raving about a new artist, and you feel like the only one who hasn’t heard of them. But you buy tickets, just in case, because everyone else is doing it, and you don’t want to miss out.
If we allow fear to drive our decisions, we waste our biggest asset, our attention, on things that don’t matter. In business, this can lead to poor job performance, lack of career advancement, or even job loss. On a corporate level, FOMO can lead to “me-too” strategies, with companies copying whatever their competition does first. However, success comes from clarity, direction, and differentiation, not copying others.
To shift from FOMO to JOMO, the joy of missing out, we need to define our priorities in life and business. Writing them down helps us crystallize our thinking, understand what matters to us, and how we can achieve our goals. This becomes our go-to resource for decision-making, as we evaluate opportunities based on whether they help us reach our goals.
Overcoming Perfectionism with Speed and Agility
The second mindset shift is moving away from perfectionism and towards speed and agility. As a strategy facilitator, my role is to assist businesses in achieving their future goals. When clients ask me how long it takes to create the perfect business strategy, I tell them the truth: it’s impossible to achieve perfection. We can align a business around an 80 percent strategy and leave the remaining 20 percent for uncertainty. This gives us enough direction to get started and make progress.
In business and personal situations, we must be able to adapt quickly when unexpected events occur. When COVID-19 first hit, we had to decide: wait it out, or pull our relocation to Canada forward, and move within days. Our perfectly planned relocation had to make space for a new reality: we acted swiftly and learned as we navigated the uncertainty of moving to a new continent under lockdown conditions. Prioritizing speed and agility over perfectionism will help you move forward, learn from mistakes, and succeed over time.
From Scarcity to Abundance Thinking
The third mindset shift is from scarcity to abundance. In business, an abundance mindset is crucial for creating a winning strategy. It’s about exploring possibilities, curiosity, and daring to dream. It’s about creating hope. Allowing ourselves to be in an abundance mindset will bring about new perspectives, thoughts, and discussions that were previously unclear to us because we listen deeply and build on each other’s creativity.
Abundance also helped me deal with the emotional rollercoaster in 2020. While I traditionally dealt with my emotions by myself, I wanted to seek out additional resources this time. It might sound obvious, but my next move was a sign that I was starting to embrace an abundance mindset. I reached out to a psychologist. As an additional resource in my life, she helped me sort the emotions and embrace both joy of being a dad, while still mourning the loss of my own father.
From Fixed to Growth Mindset
The last shift is from a fixed to a growth mindset. Instead of thinking in limited terms and absolutes, a growth mindset allows us to see mistakes as learning opportunities. Instead of thinking “I failed” or “I’ll never make it,” we can find new ways of doing things and try something different without giving up. When I was younger, I had a fixed mindset, and I struggled with understanding many things. However, I realized I could do something about it and became an avid reader and embraced learning to overcome my fixed mindset.
Instead of making statements and trying to fit things into what we already know, we should ask questions like “What am I missing?” or “How could I use this negative experience and turn it into something positive?” In a growth mindset, we understand that nothing is too hard. By adding perspective and time, we can figure things out, even if we don’t know how at first.
Making Mindset Shifts Happen
How can we implement these mindset shifts in our lives and where would they be most useful? Adam Grant, a leading organizational psychologist, suggests two concepts: challenge networks and confident humility.
A challenge network is a group of people around us who can disagree with us in a constructive way, providing honest feedback without being aggressive. They help us question our assumptions, identify blind spots, and counterbalance potential weaknesses in our thinking. By building a reliable challenge network, we can tackle speed and agility in execution and learning.
Confident humility is having faith in our capabilities while appreciating that we may not have the right solution or may not be addressing the right problem. It involves having enough doubt to re-examine our old knowledge and enough confidence to pursue new insights.
Implementing these mindset shifts can have a significant impact on our lives. Embracing JOMO helped me avoid distractions in business and prioritize what mattered, resulting in more quality time with my family. Adopting an abundance mindset allowed me to see options that would have otherwise been invisible when starting a new business. A growth mindset helped me rise to the challenge of being a first-time dad in my mid-40s. Finally, speed and agility helped us avoid overthinking and instead move to Canada, even under the most challenging circumstances.
To implement these mindset shifts, we need to have faith in our capabilities while being open to new insights. By doing so, we can transform hopes and dreams into reality and create winning strategies in both business and our personal lives.
Alex Brueckmann is the founder and CEO of Brueckmann Executive Consulting, and the author of “Secrets of Next-Level Entrepreneurs” and “The Strategy Legacy” (Fall 2023). He is a keynote speaker at the intersection of business strategy, leadership, and empowerment. Brueckmann is an alumnus of EBS European Business School (Germany), and holds certificates in change management, leadership, finance, organizational development, and strategy from INSEAD (France), and Harvard Business School (USA).
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Our reader poll today asks: When you have to deliver a tough message, what best describes your approach?
I deliver it directly and without apology or cushioning: 32.15%
I strike a balance between tough news and positive news: 62.15%
I soft-pedal the message and risk it not being received: 4.28%
I avoid delivering the message and hope they’ll figure it out on their own: 1.42%
Beware the “But” Sandwich. 62% of you report delivering tough news but trying to balance it with positive news. Another 6% soft-pedal the feedback message or don’t deliver it at all. That’s not fair to the person who needs to get the message. For the 6%, you’ve deprived them of an opportunity to improve. They are likely unaware of the issue (which is why it’s happening) and would probably like to rectify it if they know about it. For those who are balancing a tough message with a positive one, it probably sounds like “You’re great, but… here’s some tough news… but, here’s why you’re great.” The risk is they hear everything before the first but and everything after the second but and the part in the middle that’s the tough message gets minimized or missed. While this approach might make you feel better and make it easier to deliver the tough message, you’re risking them not getting the message and the behavior recurring. Step up. Deliver the tough message and instead of soft-pedaling, talk about how you’ll help them correct the behavior and improve their performance.
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Setting goals for supporting functions helps link people’s roles and the work they do every day to your department’s larger goals.
It’s easy to focus on big departmental goals, but not everyone on the team can directly affect those numbers. Setting goals for supporting functions helps link people’s roles and the work they do every day to that broader departmental goal.
To do this, it requires you to break those big goals down into component parts. Assess which supporting activities make that big goal possible. With those activities identified, you can proceed to set goals for those supporting groups. That will help them drive departmental alignment around that bigger goal.
For example, I know one organization that was trying to reduce their costs by $100 million over a two-year period. Now, not everyone in the organization owned a budget, and they were asking, “How can I contribute to hitting that big number?” Everyone in the organization had to contribute something. They looked at those supporting functions and tried to understand what activities does that function do that drives that higher-level cost number?
The supply chain group understood that if they increased their inventory turns and improved their truck fill rate, it would make their operation more efficient, which would then allow the broader organization to take some costs out. The manufacturing team looked at their processes, and they understood that if they cut the line changeover time, it would make their process more efficient, again, contributing to reducing costs. The real estate team even chipped in. They looked at space utilization, and they deferred some new expenses to future years. Every group had a smart goal that linked their work to that higher-level $100 million cost reduction goal.
Something I encourage you to do is to take a big goal for your department or your business unit and think about the support teams that contribute to hitting that goal. Build out a process map and understand how the support teams’ work impacts that big number. Then be sure that their individual and team goals are tied to those drivers of hitting your larger goal.
When you pull everybody together and understand how they contribute, then make it clear to them how their goals drive that business unit goal, you’re going to get more alignment and excitement around the work they do and hopefully help you hit that goal more easily.
Want to learn more about setting business unit goals? How about taking an entire course on it? Check out the video below to learn more about the course and get started. Or you can go directly to the course and start learning how to set business unit goals. The entire course is available at LinkedIn Learning. Enjoy!
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Jay Jung explains how small businesses can prepare for a recession by investing in finance and creating a restructuring plan.
Today’s guest post is by Jay Jung, Founder and Managing Partner at Embarc Advisors.
While Treasury Secretary Janet Yellen has recently dismissed fears of a recession, other economists disagree. Whether or not the US is on the verge of a recession today, wise business leaders are always prepared for one.
Toward this end, a thorough understanding of your small business’s finances becomes critical. Below, I outline ways small businesses can best prepare to weather the storms of recessions.
Mastering your business’s finances
For starters, a proactive approach is better than a reactive one, so get a handle on your small business’s finances long before a recession threatens to arrive. Investing in finance gives you the ability to perceive financial difficulties in advance, which positions you best to overcome the challenges that are likely to emerge.
To gain control of your business’s finances, track your budget closely on a monthly basis. In addition, measure your cash flow carefully and develop a reliable 13-week cash-flow forecast. Make sure you can generate predictions with 95% accuracy one to two weeks in advance. That way, if your company starts not being profitable, you will understand your runway. In other words, you will know how long your current cash is likely to last.
While having a line of credit or revolver can inspire confidence, be aware that banks can change these agreements at any time. They may even “call the loan,” forcing you to unexpectedly repay the debt immediately. Make sure your corporate credit card has sufficient capacity. If your spending increases, the credit card company may request some financial due diligence, so be ready for that. Finally, have a healthy reserve of “safety cash” stashed away.
Creating a self-help restructuring plan
Before a recession hits is also the time to assemble a self-help restructuring plan. What options for economizing does your business have?
While developing this plan, keep in mind that, during a recession, additional challenges can arise for small businesses. For instance, the cost of borrowing may increase further. As the economic pain spreads, customers may pay late, vendors may require earlier payments, and inventory can be tied up for longer. This means your working capital will deteriorate. You may also see lower revenue due to lower volume or prices.
Depending on your projected runway and cash needs, consider external investment (e.g., mezzanine debt, equity injection, etc). Don’t bank on external funding, however.
I recommend keeping your marketing and sales efforts strong since these outlays allow you to control your own destiny in a recessionary environment. Relying only on word-of-mouth and referrals means you don’t know when or where your next customer is coming from.
That said, make sure you track the efficacy of these campaigns. Otherwise, you may pour valuable cash into a black box.
Don’t forget to consider the upside — your plan should include strategies for pivoting if the business environment rebounds quickly. Think of ways how can you emerge as a winner from this positive scenario.
Finally, decide on the threshold your business would hit in order to trigger various cost-saving measures. If you try to figure it out when a crisis is at your doorstep, it may be too late.
Implementing the strategy
In my experience, small businesses often take action too late. If you ever find yourself going over budget on certain items, then implement remedial measures as soon as possible. After all, a budget isn’t just wishful thinking, it’s a plan of accountability that you made and now need to adhere to.
Toward that end, review all major vendor contracts and renegotiate rates wherever and whenever possible, and cancel where applicable. Similarly, review your headcount and actual staffing needs. Avoid aggressive hiring, and don’t pursue a mentality of “growth at all costs.”
At the end of the day, strong customer relationships are what will get you through the recession, so be sure to demonstrate flexibility and work with your customers. After all, it’s better to give some concessions than lose a loyal customer.
If you do hit the threshold that your restructuring plan specifies, then rip the bandaid off and take those cost-cutting measures. As painful as this may be, it will help you avoid the death spiral.
Recessions are challenging times for every business. Position yours for success by taking control of your finances, creating a restructuring plan, and being prepared to use it.
Jay Jung, a small business thought leader, is the founder and managing partner at Embarc Advisors and has nearly 20 years of experience in strategic finance. Jay is former Goldman Sachs Investment Banking Vice President and McKinsey & Company Engagement Manager. He currently works with startups as a fractional CFO or advises them as a consultant. Most recently, he has successfully advised on capital raises for several startups – including during the COVID-19 crisis. He also co-founded a technology startup that raised capital from Softbank and other VCs.
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Our reader poll today asks: How willing are you to change your decisions when presented information that could be counter to the original decision you made?
Very willing: new information means new decisions even after I’ve made them: 59.24%
Somewhat willing: I have strong beliefs and it takes concrete new information to get me to change: 35.54%
Not very willing: I have a hard time changing direction even in the face of new information: 3.48%
Not at all willing: I want to see my decisions through and not be seen as being “wrong”: 1.74%
New information, new decision. Decision making flexibility can be challenging. We make a decision and share it with our teams. We own that decision. It’s hard to say “I was wrong” and change course when new information is presented because no one wants to be seen as “wrong,” especially in front of their team. Here’s a different way to think about it. Instead of saying “I was wrong” or “I made a bad decision,” say “I made the best decision I could with the information that was available at that time. Since then, I’ve received new information that requires me to make a different and better decision.” It’s possible to be right and be right again. This is a mindset you can adopt that will make it easier for the 40% of you who say you have some challenges changing your decisions.
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Imposter Syndrome is the belief that we don’t believe we deserve the job we’re in or the success we achieve. To overcome it, become aware of what’s letting you down and allowing these intrusive thoughts into your mind. That awareness enables you to shift your perspective and start being kinder to, and more patient with, yourself.
Today’s post is by Ethan Lee of Inspiring Interns.
Imposter Syndrome is a term that was coined in the late 1970’s from research carried out by Pauline R. Clance and Suzanne A. Imes. Their researched showed that many high-achieving women tended to believe they were not intelligent enough and were being over-evaluated by others. Imposter Syndrome has therefore come to describe the feelings of people who, quite simply, don’t believe they deserve their job. Those exhibiting the syndrome believe that deep down they are frauds, and fear that sooner or later they’ll be exposed.
It’s thought that most of us will feel like an imposter at some point or another in our careers, with studies suggesting around 70% of us will experience the feeling sooner or later. While it’s not necessarily harmful in and of itself, the dangers arise when these feelings make you apprehensive, and hold you back from fulfilling the upper echelons of your potential.
Like all problems in both your personal and professional lives, understanding where they may be stemming from is a great place to start. There are myriad reasons that could be causing your imposter syndrome, but here are just some ideas:
You feel inexperienced
This is a likely scenario for younger workers, graduates, career changers and generally people who are prone to a weakened sense of self-worth or self-appreciation. The notion that you’re not automatically worthy of something can be a good thing in moderation, keeping you grounded, humble, and realistic about your goals and capabilities. When these thoughts are consistent and intrusive, however, they’ll certainly begin to be a distraction, and damage your performance in the long term.
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Our reader poll today asks: What kind of challenge do you find the most interesting or exciting?
Taking something that’s been successful and building on that success 9.10%
Taking something that’s failing and turning it around 49.67%
Building something new that no one has ever built before 41.23%
Give me a challenge! 90% of respondents want to take on big challenges – either fixing something that’s broken or building something entirely new. Obviously these approaches carry significant risk with them, but the rewards and satisfaction that come with success are clearly attractive. Be sure to go into these situations fully aware that your chances of failure are high. You might not achieve the impact you want to have. Manage expectations with your stakeholders accordingly. There’s no upside to an aggressive forecast of success. You’ll simply be putting undue pressure upon yourself and set people up for disappointment if you don’t achieve your lofty expectations. These situations are ones where you’re best off underpromising and overdelivering.
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There are two major types of goals you can set for your business unit: quantitative and qualitative goals.
When you set goals, there are commonly two types: quantitative and qualitative.
Quantitative Goals
When you set goals that are quantitative, they’re going to focus on things like financial results, operational metrics, customer dynamics, or quality. You can typically track these types of goals pretty easily. That doesn’t mean you don’t have to be thoughtful about these metrics. A focused set of critical driver metrics is more valuable than a broad set of less relevant metrics that your team can’t affect.
Let me share an example. Let’s imagine you have a sales team. The overall goal for the division is to grow revenue. The driver metrics that affect revenue are price and volume. Now, we’re talking about the sales team here. They have no control over product price. If you just give this team a revenue goal for their business unit, it won’t focus their efforts appropriately. It could lead them to argue or complain about pricing policy. That’s just not productive. The business unit also doesn’t control customer service. Using total revenue for this team’s goal isn’t fair because they don’t control all of it.
When you go to set the sales team’s goal, focus their goals on what they can control. In this case, it’s new sales volume. Think about that sales team going out and trying to get more customers. The driver metrics, for their ability to acquire customers, are things like the number of prospects they talk to, the number of sales calls they conduct, and the conversion rate from a prospect to a paying customer. By focusing on these driver metrics for this sales team and focusing it on what they can control, you’re going to get better results.
When you think through your metrics for your business unit, think through the drivers. Consider the team’s ability to control those drivers. And make sure the goals you allocate to them are only focused on that which they can control. If you build your goals this way, you’re going to get a more concrete set of goals that your team feels empowered to actually drive.
Qualitative Goals
In addition to setting quantitative goals, which are pretty easy to set, a lot of times you’ll have to set qualitative goals. You can look at things like major project completion or milestones in completing that project. Sometimes, you want to measure things that are difficult to measure. You’ll have to infer from indirect quantitative metrics whether you’re making progress on that desired outcome. Things like culture are hard to measure, but that doesn’t mean you don’t have to measure it. You can construct a set of indicators that let you know if you’re moving culture in the right direction. You can look at things that’ll tell you if you’re succeeding in reaching that higher-level end goal.
Let me offer a couple of examples. If we’re looking at culture, maybe we create a balance scorecard to measure our performance on cultural improvement. We want to be a top place to work. We want engaged associates. That’s hard to measure. But, we can look at quantitative metrics to tell us how we’re doing. We can look at associate retention, how many people stay in the organization. There are measures out there like a Gallup Q12 poll that can tell you which direction your culture is moving. You can look at things like absenteeism. I can measure if somebody’s not at work, and that’ll tell me if I have a good culture or a bad one. I can look at referral hires. Are people telling their friends, “Hey, you should come work here—it’s a great place to work?” Some organizations have kudos programs where associates reward one another for doing something great. How many people are using that program?
When I look at all of these quantitative metrics together, it gives me an indicator on whether my culture is strong or weak and if it’s going in the right direction. You may have situations where you’re doing a big project. And again, qualitative goals can matter here. Let’s look at implementing a large technology system. We may take an approach where we set goals based on milestones. We may set goals around use case completion, user acceptance testing, and training completion. Setting qualitative metrics is the same as setting quantitative ones. Understand the desired high-level outcome you’re trying to achieve. Think of drivers that point toward that outcome. For the ERP it’s things like “Are you hitting your milestones to get the project done?” For things like culture, maybe it’s several indicators that you tie together and say, “Does this picture tell me I’m going in the right direction?”
Qualitative goals can really help you understand how your organization is doing. Pay as much attention to them as you do to your quantitative goals.
Want to learn more about setting business unit goals? How about taking an entire course on it? Check out the video below to learn more about the course and get started. Or you can go directly to the course and start learning how to set business unit goals. The entire course is available at LinkedIn Learning. Enjoy!
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When it comes to making career decisions, we’ve all been to “the dark side.”
Endless pro-con lists. Sleepless nights. Emotional rollercoasters. Circular conversations. Worrying if this is our “one shot” while simultaneously wondering if we’re settling or worth more. Trying to balance the shiny components of the offer, maintain a level head, remember to negotiate, and keep every other generic piece of career advice front of mind.
Cue confusion, anxiety, doubt, and fear.
But what if there was a way to ensure that every decision you made in your career was in your best, long-term interest? What if you could wade through the emotions and momentary elation and get down to brass tacks: Will this work for me or is this just another distraction?
In the moment, it can be so difficult to separate what really matters from how we are currently feeling. After all, no matter if we’re being offered the CEO role or a part-time consulting position, there are so many emotions at play.
It’s human nature to feel compelled to pursue something that we’re offered. Even if the offer is coming from left field (hello, Mr. CMO, would you like to design a logo for me?) there’s something about an opportunity showing up on your doorstep that begs the question: Am I supposed to take this?
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Our reader poll today asks: How robust are the employee mental health resources in your organization?
Very: We have a significant number of high-quality resources available to our associates 33.34%
Kind of: We have some key resources available but we could do better 27.17%
Not very: We have a couple of critical mental health resources but that’s it 18.51%
Not at all: We have no mental health resources available whatsoever 20.98%
An absence of resources. Mental health issues impact a significant number of employees yet two-thirds of respondents say their company’s mental health resources are lacking. While mental health issues may be mostly invisible, their impact on employee wellbeing and productivity are substantial. Just because you can’t see it doesn’t mean it’s not there. If you’re a leader, see if you can lead the change on making these critical resources available. Your team members and colleagues could benefit greatly from them. Depression, anxiety, substance abuse, and other mental illnesses are no joke. Facing them alone is an incredible challenge for your team members. Show them you care about them as an entire person. Get them the resources they need. They’ll appreciate it and it’s simply the right thing to do.
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When you go to set your business unit goals, there are a few principles you should follow. Any goals you set should be SMART—specific, measurable, achievable, relevant, and time-bound.
Performance expectations in your organization are probably pretty high. A key to hitting those expectations is a solid goal-setting process. Setting department and business unit goals requires leaders to translate higher-level corporate goals down to the business unit and then break them down further into team and individual goals. This means defining goals, then linking them to strategy, financial results, and incentives.
Leaders must also sanity check goals to ensure there are no unintended consequences arising from goals that are improperly set. Going from corporate to business unit to individual goals helps drive alignment of activity with the company strategy. For more on team and individual goal setting, watch my course on that subject.
I have one client that was trying to grow internationally. They set a corporate goal for a portion of revenue coming from outside the United States. The business units were each given a target. Functions that supported those business units were given enabler targets, like building a pilot plant in India for the R&D group. If the R&D built that plant, then they could sell product in India, which would help drive the high-level goal of driving revenue outside the United States. Individuals on that project had milestones for their personal goals. By linking the corporate strategy to the business unit to functional goals down to individual goals, the organization had the alignment it needed.
When you’re thinking about the goals for your organization, make sure you’re making those clear linkages from the highest-level strategic goals all the way down through your business unit or function down to your teams and down to the individual level.
5 Goal-Setting Principles
When you go to set your business unit goals, there are a few principles you should follow. Any goals you set should be SMART—specific, measurable, achievable, relevant, and time-bound. These principles improve the team’s understanding of what they need to deliver. These principles also help you ensure you’re able to track performance against the achievement of the goal and gain the team’s commitment to achieving it. There are multiple versions of SMART, but they all get to the same thing—creating clear and actionable goals that matter.
Specific
Specific gets to spelling out the behavior or outcome that you desire. It lets people know what to focus on and what actions are expected.
Measurable
If you can’t measure it, you don’t know if you succeeded. Setting measurable goals also ensures you’re driving the right outcome, like profits versus sales. You’ll get very different behaviors depending on how you measure.
Achievable
Your goals should be achievable. If it’s not realistic, people are going to give up and not even try. They’ll get halfway through the year and say, “We’re off course, so you know what? Forget it.”
Relevant
Goals need to be relevant. This drives the activity that’s tied to a broader organizational goal. If I set a cost-cutting goal for the company, but we’re trying to grow sales, that cost-cutting goal is not going to be relevant or helpful in achieving the broader goal of hitting sales.
Time-Bound
Your goal should also be time-bound. People need a sense of urgency. Specifying time also enables better work and better project planning.
I worked in an organization where we were trying to increase the number of dollars that we were getting back from consumers who owed us money. The goal was specific. We said, “Here is the metric that matters. We need to achieve 100 million dollars of incremental dollars collected.” It was also measurable. We knew exactly what data to get and how we would track it. The 100 million dollars was achievable. Sure, it was a big number, but we looked at last year and we said, “We think we can hit 100 million this year.” That goal was absolutely relevant—one of the bigger goals for the company was driving down our losses. It was really dependent upon bringing in these incremental dollars collected. Finally, it was time-bound. We said, “By December 31st, we need to collect these incremental 100 million dollars.”
By setting that SMART goal, everyone in the organization knew exactly where we were going and why it mattered. When you’re setting your business unit or department goals, take the time to think through every goal and make sure that those goals are SMART.
Want to learn more about setting business unit goals? How about taking an entire course on it? Check out the video below to learn more about the course and get started. Or you can go directly to the course and start learning how to set business unit goals. The entire course is available at LinkedIn Learning. Enjoy!
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