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11 factors your business targets should include

Check your business objectives to include these factors.

Most companies can show a clear vision and create kpi targets. A secret for sustained success is ensuring the most important factors are included for every business target. There is a cost for missing these key factors.

Target setting design

Target setting design

Lazy management will overlook one or two of these areas and then find they are busy for the rest of the year chasing the missed elements.

The purpose of this article is to provide you a short mini check list for your targets. This will help you understand why some of your targets are performing better than others.

The use of templates and check lists is common practice for online articles as a method to showcase a sample of services to potential clients. That is the approach I have taken here.

A method when using this list will be to score your performance between 0-12 for each point (see the cool free pdf I have created ready for you). Then use the scores to develop strategies, solutions to improve your score.

Do not expect to score 12 for every point. Indeed, in my experience very few companies manage top marks for every target set. Just use the score guide I have within the pdf to provide a relative success criteria and standard comparison.

Download your free self assessment pdf download for this article. 

Grab some of your existing targets and take 15 minutes to run through this article with them. The text provided below will provide the context, background and ideas behind each factor. The free pdf download will produce your results self-assessment. So adopt a realistic change management and improvement approach by using the feedback you generate to improve the changes of hitting targets and improving your bottom line performance. Let’s us get started straight away.

1 Life and time line of the target.

Set a time line expectation for your targets

Set a time line expectation for your targets

Most sales organizations have weekly, monthly and quarterly targets and quotas.

  • What about other areas of the business?
  • The number of code lines is an old target but how about solving problems?
  • When does the target stop?

If a target is set with the wrong intent then you can create a situation where a challenge is being managed by the people working the target. They become fixated on the actual number as opposed to solving the root cause of the clear business objective.

Some considerations for this include: Why seek to solve customer complaints within 7 working days as opposed to getting rid fully of the actual reasons for complaints.

Key Message: Do not set targets for symptoms, set targets to eliminate or stimulate causes.

2 Linking mission, vision, principles and ethics to the objective.

The recent emissions case with Volkswagen highlights how a target was reached whilst not behaving in an ethical manner linked to the wider mission, vision, principles and ethics of the business and markets the business serves. There are numerous examples shared in this Arizona State University article of how targets have led to decisions not compliant to principles.

Clarify your vision

Clarify your vision

This risk can easily be managed with a transparent and open business culture. Creating regular checks and balances will help improve your chances of maintaining a close positive correlation of your targets and strategy of reaching targets with appropriate behavior.

Do you have a code of ethics available for reference and used as a check point when target setting? How does the leadership walk the talk regarding ethics and principles in daily business?  How have the rewards systems being created within the business manage to create positive outcomes without compromising the business principles?

Key message: The DNA of the business should shine through every action.

3 Consideration and conflicts of interest to other areas.

I find one of the most common challenges large or rapidly changing organization has to manage is the conflicts of interest and potential clash of targets. So, a business seeking top line growth may have a marketing department determined to invest in the brand and help feed the sales pipeline. At the same time, the financial department has a target to retain a specific net working capital (NWC) value in its operational accounts and so limits the budget levels to marketing. Both of these target are made even more complex when the human resources department insists that a certain percentage of training is provided but can only be permitted once NWC and Top line sales has been reached.

At some levels the above appears to be standard management operating practice. However this does not reflect the relationships between the department and a silo design outcome from the situation. A more collaborative approach and solution could be for the finance department to allow a smaller NWC metric level is maintained for a specific amount of time whilst the sales pipeline is fulfilled. Then, this releases faster the required topline sales and this in turn generates the new NWC levels and opportunity to implement the training.

In another situation, the training may produce the improved skills to reach the financial and marketing department’s goals faster so this might become a higher priority.

Key message: Create targets with the full business actions in mind.

4 Select the appropriate goal setting system.

There are many different types of goal setting systems to select from. My experience is that most companies adopt only one or two types of goals, for instance SMART goals and in some cases OKR’s. I suggest that companies take a wider and more holistic perspective. Using a range of goal setting systems for different types of targets will allow the most optimal approach and effective solution. Fortunately the majority of goal setting system can be applied using some form of template and therefore requires minimal training for faster results.

So, one target might be best managed and applied using SMART and yet another within the same department might be best applied using the 10x principles. Another department may make best use from HARD goals and a leader of research and development BHAG.

Key Message: Ensure goal setting capabilities and awareness improves across the business.

5 Selection and investment in the right resources.

Transformation of standards and deliverables within a business can seldom be simply achieved without support. Making the correct decision to attain optimal and high return resources and the best team members will often make the difference between success and failure. The selection of the correct members to help reach a target should be structured. Certain skills sets and contributions of experience will change the dynamic of a target outcome so ensure the correct mix exists.

Select the appropriate resources

Select the appropriate resources

Resource considerations need to go beyond the people. Consideration to the budgets, equipment and organization structure to support them is equally vital. I find these structural factors amongst the most overlooked part of target setting.

I have personally experienced across several jobs where targets are set and agreed at stretched levels and then resources reduced or removed later.

Do you know someone else where this has happened?

 

I find this can also be a fast way to disengage your employees and miss targets. Simply put it is leadership negligence and poor management unless the targets change proportionally also.

Key Message: Reallocation of resources will require adjustment to targets as a review policy.

6 Deciding the level of target influence.

Setting business priorities is a key leadership skill. Each target will have a specific priority and importance for the business. The level of influence therefore may change over the life time of a target. For instance, starting with a target of customer retention may become a standard metric for the first 12 months. During this period of time, competition, market conditions, service/products and data may highlight the need to upgrade this metric to become a target Key Performance Indicator.

I see confusion amongst workers that have targets set and their kpi’s. This miscommunication creates unnecessary worker tension and frustration. I have spent many hours through my management roles realigning peoples understanding of targets and performance indicator priorities. Once these alignments are in place I have experienced improved motivation, satisfaction and bottom line results.

Key Message: Business performance management needs to be a dynamic and communicated with the appropriate importance placed on metrics.

7 Source selection and use of benchmarks.

How often do you think your staff use a sentence like this; “I don’t know where they got those numbers from but it sure isn’t from this planet”. The surprising truth is that many targets are simply made up. Even when best efforts and attempts are made to validate and confirm capabilities it often comes down to a simple gut feel. This may be one of the single biggest truths that leaders and management try to hide. I even find the same applies when teams create their own targets for the year. All of this is fine as long as it is remembered and referred to during the reporting period. So “smashing” targets can be more than chance or sandbagging.

Key Message: State your sources of the target selection, this helps improve future target setting standards and validates those set correctly. Equal care needs to be used when comparing with benchmarks.

8 Managing other targets.

That’s right, the other targets matter also! If you pop into a high quality boutique it is clear they will provide you a high quality experience no matter the time needed. The same can be said for most quality companies. There will always be time to ensure the customer can make an informed and correct decision. These types of companies have many metrics yet have a simple and clear overriding perspective of the most important ones. The targets will be quality and experience driven and not a smaller step down in the process.

Business strategy is made from many measures

Business strategy is made from many measures

It can be said that you can change what you measure however the risk is, you will only become only what you measure also! So, concentration on metrics and targets too far down the “transformation” process will risk slowing down the actual transformation you seek.

Key Message: Ensure adequate time is allowed for high productivity and creativity to help the long term bottom line performance of the business. Do not just chase the numbers; seek to enhance everyone’s experience.

 

 

9 Motivation of people and departments.

We have already touched on some factors that affects motivation, these include ensuring ethical targets are set. However, the pure motivation of people does not derive purely from ethical targets alone. I have always been a highly driven goal getting personality, yet the success of this drive is not the targets alone. I have always sought to find a personal goal that is similar, matches it or can be influenced in some way with the business goal.

Understanding how to link the skills, experience, team desires, status or completion of a full portfolio of metrics may be any one or several of the other reasons a person remains motivated. The art of the manager’s role is to identify a process where each person can also relate on an emotional level to the target being set. The strongest motivators are when more than one alignment can be made or a string of events (think story line and gamification) will generate sustained outcomes for individuals, departments and the business.

Key Message: Motivation is a complex but highly effective tool and well worth researching.

10 Decide what the business will learn from the target.

Quote about blame

A business is sustainable with a commitment to growth. Growth comes from learning and embracing wisdom from its experiences then using these with opportunities as they arise. Periodic reviews of targets and setting learning objectives with your targets are part of your success journey and should be stated from the start.

Note: It is clear that I point out the learning process should not be used as an OK excuse for not hitting your targets or business objectives. Do not cover up poor performance with excuses of positive learning!

Examples of business learnings can include: System model robustness, skills development, problem resolution, collaboration improvements etc. Creating a wider reason for targets offers extra motivation opportunities as already listed above.

Key Message: Do not let other variables take over the original intent and purpose of the target. Make it clear but also have a development output where possible.

 

11 Define accountable and responsible people.

The creation of clear responsible and accountable people is important for all targets. This generates the needed ownership to drive success and also helps the organization define the optimal structural methods of implementation. Some targets may require new dotted line responsibilities and empowerment to be achieved.

I find that collective responsibility for targets has become a trend in recent years. The intent of this change is positive however it clearly creates challenges when holding people to account. The finger pointing blame game starts. So, I recommend clear definite individuals are linked to specific targets.

The structure of creating these lines of accountability must come with the empowerment to do something about it! There is little point to have a manager responsible for a target that is met with consequences from reputation or job security if their budgets and resources have been cut to render the target impossible to achieve. The same is said for the acceptance of the target, clearly a person who is unwilling to accept a target be less motivated to pursue it.

Key message: To complete the circle of success for targets generating buy-in and empowerment is critical.

Summary thoughts for business target setting

The most common target challenges face by companies

The most common target challenges face by companies

Creating a system of check and balances for business targets is an important step for success. Often, targets and their experiences are a little hit and miss and vary in experience from department to department. This is because the process of target setting has only included some or even none of the factors I have highlighted within this article and list.

Performance management takes time and needs to evolve. There will be some targets that will score high in a review such as this and yet others that become justly discarded as the process highlights poor judgement, timing or business priorities. Target setting is often cited as an art form and to some degree I agree with this thought process.

Setting goals and objectives for process and systems is easier than when setting and creating targets with people and markets. The outcome of targets is a form of success for the business and where possible for the improvement of the business processes and quality. The experience of the individuals is an important consideration when designing and managing performance.

Some departments have better experience with target setting than others. The classic areas such as sales and finance have established target systems and cultures. Other areas such as indirect procurement quality and research and development will be harder to define and create robust objective targets when starting a target setting process.

Take a review of your current targets and use your self-audit process to identify key areas of improvement. These steps help a business and the people within it to serve the market and shareholders with improved value and improved clarity.

 

I would love to hear your comments and feedback on this article. Please share it with anyone that you think can benefit as it also helps extend our communication reach to the wider market.

For more information about target setting, goals and metrics then please simply get in touch with me so we can help you and your business lift performance to new levels of success.

James Doyle - Chief Target Setting Officer

James Doyle - Chief Target Setting Officer

-          Written by James Doyle founder of JAMSO.

-          We help people and companies improve their performance through goals metrics from training to formal audits and consultancy services. Contact us now for a chat to see how we can help you improve your business and personnel skills.

Here is a short summary version of the key messages also found and uploaded on Slideshare