October-2024
Organizations have long relied on goal setting as a cornerstone of performance management. From North Stars, KPIs, and KRAs to Balanced Scorecards, OKRs, and both lead and lag indicators, numerous philosophies and frameworks have emerged over the years. Whether it’s “measure what needs to improve,” “measure what matters,” or setting SMART goals, goal setting has evolved at both the organizational and individual levels.
But how do you choose the right approach to build a resilient, future-ready organization? That’s the focus of this month’s nudge-letter. We hope it helps you navigate the complexities of goal setting as you prepare for the challenges of the modern workplace.
Is your goal-setting SMART enough
to thrive in the VUCA world?
Organizational agility is the ability to quickly sense and respond to both internal and external changes. A performance management system should enable this by keeping employees aligned, adaptable, and continuously improving. At the core of this system is purposeful goal-setting—understanding why goals are set in the first place. Goals that focus on what truly matters, aligned with the organization’s stage of growth and maturity, are more likely to drive success. Goals that challenge employees to grow, show how their work contributes to larger objectives, and foster deeper engagement are more likely to be embraced.
Here’s how to set SMART goals, adapted for the future of work:
Significant
Ensure goals have a meaningful impact on both the organization and the individual. Strong alignment between personal and organizational goals fosters accountability and ownership.
Motivational
Define goals that inspire action, commitment, and purpose. Goals should stretch individuals beyond the obvious, but not so high that teams lose motivation. Balance ambition with achievability to drive progress.
Aligned
Goals must align with the organization’s strategy, values, and mission. They should also align with the individual’s role, giving them clarity on how their work impacts organizational success.
Resilient
Build flexibility into the system to allow for continuous review and adjustment of goals. This fosters agility, enabling teams to pivot in response to new challenges without compromising performance culture.
Team-oriented
As work becomes more interconnected, focus on team outcomes over individual performance. A performance management system that measures and rewards team success fosters collaboration and shared accountability.
Many organizations create a long list of goals whenever a problem arises, making their goal-setting system complex and ineffective. The 80/20 rule (Pareto Principle) applies to goal-setting too—about 20% of KPIs generate 80% of actionable insights. This makes it crucial to prioritize and focus on what drives impact. At Semco Style, we recommend no more than 6 KPIs.
Don’t forget, in goal-setting, less maybe more—focus on what truly matters.
FROM AROUND THE WORLD
MAKING SURE YOUR EMPLYEES SUCCEED
It’s common knowledge that helping employees set and reach goals is a critical part of every manager’s job. Employees want to see how their work contributes to larger corporate objectives, and setting the right targets makes this connection explicit for them,
FROM THE WORLD OF SEMCO STYLE
THE GOAL IS TO ALIGN WITH THE MISSION
Ultimately, it wasn’t about OKRs or KPIs. It was about measuring what mattered in a way that fit the company’s needs, organizational maturity, and stage in their journey toward building high-performance teams.
TRIVIA FOR YOU
DID YOU KNOW THAT A WRONG GOAL LED TO A CRISIS IN AN ORGANIZATION?
In 2016, Wells Fargo faced a major scandal when aggressive sales KPIs pressured employees to meet unrealistic targets, resulting in the creation of 3.5 million fake accounts without customer consent. The fallout included $3 billion in fines, mass employee terminations, and lasting reputational damage—underscoring the dangers of misaligned KPIs that incentivize unethical behavior.
More in the series
Navigating Future of Work – May 2024
This edition delves into the concept of ’empowerment’ – a vital skill for leaders, often misconstrued.