The Ultimate Guide To Effective Goal Setting
With the start of a new year and a new quarter, individuals and organizations are planning what they hope to accomplish by writing goals.
The exercise of writing down goals is extremely effective. You’re 42% more likely to achieve a goal if you write it down.
However, writing down “I will lose 20 pounds” doesn’t burn that many calories. You’ll need to structure your goals in a way that sets you up for success.
In this post, we’ll break down how to develop, structure, and track your goals to maximize the likelihood that you not only accomplish your goal but that the goal pushes you to achieve your full potential. Whether your team is using Scaling Up, OKRs, EOS, or some other system for strategic planning, using the proper structure and guidelines for your goals will help you accomplish more.
While we’ll focus primarily on goals for an organization, these tips equally apply to personal goals. Be it a health or financial goal, the same principles behind a well-structured goal apply.
How should I come up with my goals?
A goal dissociated from a bigger vision may not provide enough motivation to keep you focused on achieving it. Planning for ultimate success provides the underlying motivation for achieving a specific priority. Start With Why author Simon Sinek says, “Achievement happens when we pursue and attain what we want. Success comes when we are in clear pursuit of why we want it.”
We recommend capturing this ultimate vision with a Big Hairy Audacious Goal, which provides the guiding north star for your organization. After that, it becomes easier to break down the target metrics you need to achieve in the next year to place you on the path of achieving your BHAG.
In fast-growing companies, planning typically needs to be done on a quarterly cadence to account for the speed of change. Quarterly goals should address the most important work for achieving your targets.
How should my goals be structured?
We recommend structuring goals in a way that focuses on flexibility and iteration. This reflects improvements to the conventional to SMART Goals advocated by Donald and Charles Sull of MIT Sloan called FAST (see With Goals, FAST Beats SMART). Let’s break down the components of each of these types of goals and how they can work together to ensure your goal structure supports your overall vision.
SMART Goals are Specific, Measurable, Achievable, Realistic, and Time-Bound. Let’s break down what that means.
- Specific: Well written goals should answer the main questions of “Who?”, “What?”, and “How?”. This means the goal explains who is responsible, what needs to be achieved, and how it will be accomplished.
- Measurable: A good goal should include some measure of success to enable you to track your progress and know when you’ve actually achieved it. Defining a quantifiable measure of success provides clarity to your goal and makes it easier to reach. We’ll discuss how to choose a target for your goal in the next section.
- Achievable: Setting a goal that other responsibilities will prevent you from accomplishing sets you up for failure. Be realistic but aggressive when determining what can be accomplished with the time, energy, and focus you have available for this goal.
- Relevant: Any goal should be relevant to achieving your targets and the bigger vision you have for your organization and yourself. A goal that isn’t important to overcoming the hurdles between today and your desired future won’t keep you motivated or move your company forward.
- Time-Bound: All well-written goals have a deadline for achieving them. Whether you’re planning on a monthly, quarterly, or annual basis, tracking goals against a due date provides a sense of urgency and allows you to understand whether they are sufficiently aggressive.
Complimentary to the well-worn concept of SMART goals, we also recommend creating your goals with FAST, a newer paradigm, in mind. FAST goals are Frequently discussed, Ambitious, Specific, and Transparent. This places more of an emphasis on shooting high and evaluating performance continuously. While some of this overlaps with SMART, we’ll break down the differences below and how they work in tandem to motivate your execution.
- Frequently discussed: Setting a specific cadence for reviewing progress, prioritizing associated work, and allocating necessary resources is critical for keeping goals on track. At Align, we give updates on quarterly goals daily and discuss them with functional teams on a bi-weekly cadence. Specific discussion rhythm depends on your time frame but should allow for maximal focus on what matters most and timely course corrections if goals go off track.
- Ambitious: In addition to being “achievable”, your goals should provide enough difficulty to boost performance and minimize the risk of teams relaxing if the goal appears easily obtainable. Setting goals that require extra effort incentivizes innovation and creative thinking as priority owners figure out how to elevate performance.
- Specific: This is a repeat of the first component of a SMART goal, but when combined with FAST creates greater emphasis on flexibility. When the goal is written sufficiently specific, it is easier to identify where progress is falling short and to adjust course quickly.
- Transparent: This is the final and potentially most important component of writing a goal that will push success. Providing transparency into goal creation and tracking creates motivation through accountability. Priority owners can understand how their work supports broader company goals and also understand how efforts are combined. It also allows easier identification of duplicate efforts or efforts that don’t contribute to your broader strategy. Transparently tracking goals also allows for greater collaboration when identifying issues and course correcting.
How aggressive should my goals be?
A popular maxim attributed to Bill Gates states, “People tend to overestimate what can be done in one year and to underestimate what can be done in five or ten years.” We recommend quarterly planning because this allows relatively confident predictive power. According to Verne Harnish, anything between one quarter and five years is a Wild Guess!
The most difficult part of writing a great goal is balancing achievability and ambitiousness. Companies at different stages may select different levels of ambition for their goals. Google, for instance, expects employees to achieve between 60-70% of their goals. This leads to greater creativity and experimentation when attempting to achieve goals (see Mindset: The New Psychology of Success by Carol Dweck).
Depending on how much past data you have to work with, setting expecations that are orders of magnitude higher than current performance should depend on tollerance for failure. One solid solution to this issue is defining the success criteria, but also including a stretch goal. We categorize these by a color system, but there are many ways to do so. Our priority color system includes:
- Green: This is the color of accomplishing your goal.
- Red: This represents an unacceptable failure. This is the minimum level that you would accept before there would be consequences. If your goal is to 2X some metric, Red could be 1.25X. This would constitute quarterly performance that puts achieving annual targets out of reach.
- Yellow: This represents performance between
- Dark Green (Super Green): This represents your stretch goal, what it would mean to go above-and-beyond what was expected. This should come with added celebration if accomplished.
Creating your measurable result for a green target should be based on the level of success needed this quarter to help you achieve your annual target. In turn, your annual targets should be based off of the performance that companies in similar industries followed on your desired growth trajectory. More information can be found in the additional resources section at this post’s conclussion.
To see how quarterly targets are developed from annual goals, let’s look at a few examples.
See It In Practice
Company Example: MedTechX
Let’s say MedTechX is a medical device manufacturing company who’s new cancer detection device was just approved by the FDA. They’re preparing to scale quickly in 2020 and setting goals to support their growth. Their BHAG is to enable 1 Million cancer screenings. They have a 5 year target of going public with a market cap of $250 Million.
To achieve this, they set a 1 year target of doubling their revenue and achieving three times industry average profitability (definition of a great vs good company). For their 2020 Q1 goals, their CEO asks their CMO, Director of Sales, and Head of manufacturing to each come up with strategic priorities for the first quarter to support their annual targets.
Sales Goal: Increase sales reach on eastern seaboard by recruiting, hiring, and oboarding Regional Sales Managers in 5 new regions by March 30. Associated KPI: New managers hired.
Marketing: Build brand awareness by surpassing 10,000 social media followers by March 30th. Associated KPI: social media followers.
Manufacturing: Reduce material waste 50% by identifying and correcting 25 process inefficiencies. Associated KPI: weekly material waste.
Each of these teams then assigns tasks down to their teams that supports these goals. The sales goal involves creating tasks for HR, legal, and the website team to assist in the hiring process. The marketing goal includes content creation and design work to elevate brand authority. Manufacturing’s goal requires identifying inefficiences with their team and creating new processes to correct these issues
To make these goals FAST, MedTechX’s CEO asks each team to meet bi-weekly to identify blockers which they discuss at their weekly management meetings. Additionally, each team presents progress to the entire company at their monthly all-hands meeting. Goal progress and the related KPIs are tracked in a dashboard that’s visible to every team member.
Personal Example: Becoming a Runner
To see how this planning can apply to your personal life, lets look at a fitness example. My friend Sarah has a personal fitness goal for 2020 to get back into running form. She’s set a personal target of running this year’s New York City Marathon in under 4 hours, while raising money for Alzheimer’s research in her Grandmother’s honor.
Because she hasn’t participated in running events since high school, she sets out a moderate training plan to make progress towards her goal. Keeping her ultimate goal, the marathon, in mind with a strong “why” behind her
For Q1 Sarah sets the goal, “I will run the St. Patrick’s Day 10K in under 30 minutes.” To support this Sarah adopts a progressive training program that takes her from running 10 miles a week to running 30 miles per week. She tracks her runs in a google sheet. To keep her on target, she posts updates on her Facebook page.
For Q2 Sarah sets the goal “I will run the July 4th Half Marathon in under 2 hours”. This involves continuing her 30 mile per week running schedule while including longer weekend runs with a fundraising and training club. This adds accountability for Sarah as she increases her training ahead of the race.
In both of these cases goals are written to adapt over time and with flexibility in mind. Each goal is tied to a broader strategic vision with a clear “why” behind them. Accountability provides an additional layer of motivation and encourages community support.
Additional Important Questions
Now that you have all the knowledge necessary for writing awesome goals, it’s time to ask five final important questions before commitimg to achieve a goal. These questions will help set you up for success and prevent wasting your time on a goal not worth pursuing.
Is this the best way to spend my time?
Pursuing strategic goals is time spent away from routine job completion. These goals should require extra effort, but offer outsized returns. If the returns do not justify the time devoted to the goal, it may not be the right time to pursue that goal or you may need to reevaluate whether your goal addresses the right constraint towards achieving your vision.
What resources are needed to achieve this goal?
Embarking on a goal with out the proper supporting resources sets you up for failure. Budgets need to be tied to strategic efforts and not the other way around. Thinking through the associated costs, in terms of financial resources and people resources, is a necessary prequisite for commiting to completing a goal.
What will keep this goal from being successful?
Identifying potential blockers and leading indicators for the sucess of a goal will help you know what to be aware of as you undertake the effort. While reviewing progress, you should also be assessing whether these blockers are effecting you and any additional issues that may come up as you progress.
How will we keep this goal moving forward?
Goal progress over a period requires diligence. Setting regular meetings for review as well as requiring transparency can help keep goals moving forward. Other ideas like a quarterly theme or making progress visible to the entire team can help maintain focus and motivation to push goals forward.
Why is this goal important?
Conquering challenging goals requires meaningful motivation. MedTechX will stay focused on increasing their value because it align’s with their BHAG of helping 1 million patients. Sarah is more likely to stay motivated with her running goals because she is running for a larger cause and is surrounded by a community of supporters. Digging deep early on to identify the “why” behind a goal pays dividends later on when challenges arise.
With Goals, FAST Beats SMART by Donald and Charless Sull
SMART v. 2.0, Aggressive Goals by Dr. Rob Sheehan
A Way to Know If Your Corporate Goals Are Too Aggressive by Michael Raynor and Derek Pankratz
A Way to Gauge How Well Your Company Is Really Performing by Michael Raynor and Derek Pankratz
Dynamics of Self-Regulation: How (Un)accomplished Goal Actions Affect Motivation by Minjung Ko and Ayelet Fishbach
If you’re interested in learning more about how software can improve your goal tracking and transparency, join us for a demo of Align today!