Leadership and Unconventional Wisdom: Setting Objectives
I’ve been in a lead or management role since 1980, so as you might imagine, after all that time I have some opinions about how to lead an organization. For much of that time I was a student of conventional business thinking and wisdom, but for the last decade or so, I’ve been able to put much of that conventional wisdom to the test (working with more than 100 companies in a consultative, turnaround, role) and found it wasn’t the actual wise guidance most companies needed.
This is the first in a series of posts I’ll be doing discussing “unconventional wisdom.” You may or may not agree with what I write, but—at the very least—I hope it makes you think.
Here’s Part One:
It’s the middle of the quarter—do you know where your quarterly objectives are? If you’re like most people, leaders included, you don’t. And now that you’re thinking about them, are you almost finished with them (unlikely), and ready to define next quarter’s objectives? What? You don’t have next quarter’s goals set, nor have you even started thinking about them? And oh—how do your goals, not to mention the goals of those reporting to you, align with the overall annual business objectives and the vision and mission of the company?
Not so easy, is it? For most companies, not only is it not easy, but it’s a pain in the rear.
Setting and accomplishing quarterly objectives (or goals, or rocks, or [fill in the blank]) is clearly something we, as leaders, are supposed to do throughout our enterprises. And to align all of these various goals to the company’s overall objectives—often referred to as cascading goals. This sounds good in theory, but do you get the feeling that the effort soon turns into a tedious exercise that most people do because they are told to, especially if they have a bonus tied to the outcome?
And if the quarterly goals get established and accomplished do you ever feel like:
- There are a lot of “last-ditch” efforts to accomplish them before the quarter ends
- There is “fudging” on what the definition of “done” is, and
- Even if all objectives are actually completed and done well, do the important key performance indicators (KPIs) or objectives and key results (OKRs) move?
And by important KPIs and OKRs, I mean: did your profit improve, did your clients feel they had a better experience and did your staff feel empowered to deliver that better client experience? Probably some, but also probably not. A lot of “stuff” got done, but was it worth the effort compared to what your staff could have/should have been working on?
Even if you are disciplined about this in terms of cadence, and focus and tracking and reporting (e.g. using Rockefeller Habits or EOS or other methods) are you getting done what needs to be done? Every quarter? I’d bet quite a bit of money you’re not.
And when it’s time to establish next quarter’s goals, does it happen smoothly, with all of the objectives in alignment? Are said objectives well-defined and achievable (what’s described as SMART objectives)? Or is it a tedious exercise during which a lot of busy-work-type initiatives are defined, and reviewed, and edited, and sent back for rework? Once again, I’d bet so.
And why? Because that’s what conventional wisdom tells us to do. To paraphrase what I used to tell my kids: using a disciplined approach to objective-setting doesn’t mean you aren’t still heading for the cliff.
And that’s the challenge. Most goals, once achieved, don’t show up on the bottom line, the feedback about client experience, or indemonstrably improving culture and developing your people. A good portion of the resources spent on achieving many of your goals takes you away from the aforementioned KPIs, like profit, client satisfaction, and staff satisfaction. If the effort is improving one of the above, then that’s worth focusing on; if not, perhaps quit wasting your valuable time, money, and other limited resources.
So. What would unconventional wisdom suggest you do, rather than setting quarterly goals?
How about setting expectations for the business overall and then each of the functional areas of the business? And then—get out of the way. Maybe the improvements happen in days and weeks, instead of quarterly. Maybe in a month or two, instead of three. Or perhaps a particular effort will take the better part of a year. But each effort will be tied to the expectations you’ve set, as a leader.
Here are some examples. Overall expectations are set that:
- We will be increasingly profitable each year
- Our client satisfaction exceeds industry norms
- We will be considered a top place to work for our current and future employees, and
- All staff strives to become better next year (pick a timeframe) at what they do than they are today
That’s the context for setting expectations for functional areas:
- Create a recognized brand with which both our clients and employees are proud to be associated
- Consistently bring to market best-in-class products and services that are relevant to our clients
- Provide insight and education for our clients on how our products and services help move the clients’ KPIs in the right direction
- Attract and retain great clients, and do so at a pace that allows the delivery part of our business to provide a great onboarding experience
- Help provide insight and education on how our products and services help move the clients’ KPIs in the right direction
Operations must (the folks that deliver on the promises marketing and sales make):
- Have sufficient capacity to make good on promises made to our clients
- Have a belief and ability to deliver a great client experience
- Quickly assimilate for delivery the new products and services that we bring to market
Finance and Admin must:
- Facilitate attracting/retaining top people to/in our organization
- Ensure that financial resources are available to support the growth of the business
- Provide insight into the financial performance of the business
- Reduce the friction associated with transacting the business we are in (which includes our clients and our supply chain/partners)
And does what is written above provide sufficient guidance to most—if not all—staff on how to improve and move the company forward? If nothing else, does “being better next year than you are today” not set the tone that improvement is part of the culture? I know it needs to be communicated again and again, and we need to recognize and celebrate again and again before it becomes an integral part of the culture….but isn’t that what a leader does?
Can we expect results if we don’t somehow mandate some objective or goal-setting process and then measure and reward for performance against those stated objectives?
If you’re still asking that question, then either the earlier discussion re: the tedious nature of the objective-setting process didn’t resonate, or you’re really good at the process and achieving outstanding results each quarter and your profit this year is better than each prior year and you’ve got ecstatic clients and your employees wouldn’t dream of working anyplace else.
But for most companies, it’s a tough exercise with mixed results.
Does it work? So far so good. We at SUCCESS benchmark in a highly analyzed industry (there are about 40,000 companies like ours in the U.S.) and we are, or soon will be, best-in-class in those metrics important to the company, our clients, and our employees.
Again, here are some examples:
- We have achieved Top Workplace status three years out of three, reflecting the work we have done to ensure we have a great culture and opportunities for our employees
- We have a sales team that consistently finds great new clients
- We can bring new, relevant services to market faster than most in our industry; in some cases, we may be years ahead of others
- Our client survey results are at the top of our industry (we use two different cloud-based survey methods that are common in our industry and benchmark against thousands of similar companies)
- Our ability to deliver client projects, quickly mobilize for onsite visits and quickly answer client calls and emails for those in need of help are best-in-class
- And for those who understand this challenge, our finance and admin department closes the books by the 5th business day of the month (occasionally the 6th day!)
These examples are put forward simply to demonstrate that, here at SUCCESS, we see continuous improvement in all areas of the business, but I can’t tell you what improvement will happen or when it will happen.
Because the best, most beneficial improvements of all can’t be planned from the top-down, but are identified and implemented by those closest to the work being done.
If you set expectations and create a culture that supports the achievement of those expectations, then you too can get out from under the “conventional wisdom” trap, which somehow doesn’t ever work out quite as well as it should.
Unconventional wisdom, on the other hand…