One of the most important responsibilities of management 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 difficult to align the efforts of an increasing 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 that expectations and plans are clear because there are fewer people. However, adding employees adds complexity, and it becomes critical to formalize goals to ensure that everyone is on the same page.
Organizational goals act like the connective tissue that holds together all the various initiatives, processes, and tasks that make up the complex systems of a business. Leadership teams that take the time to intentionally create and communicate goals and to 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 Core 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 (official) goals. These Operative Goals should be set annually, with progress reviews at least 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 to maximize their own performance…often 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 goals that are "SMART": Specific, Measurable, Achievable, Relevant and Time-Based.
- Ensuring that 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.
Thanks to Diane Janovsky of HPI Solutions for her insights.