KeyneTalk

SMART Goal-Setting Isn’t so Smart After All

 by Kelly Nelsen

A problem with the typical goal setting process

I don’t know about you, but I’ve missed plenty of the goals I’ve set for myself over the years.  I don’t live on a cliff overlooking the ocean, I don’t own a baby grand piano (although I do own an upright), and I didn’t get my doctoral degree by the time I was 40. I faithfully followed the SMART goal setting process for these things, too.  (You know, making your goal Specific, Measurable, Attainable, Realistic, and Time-Bound?) 

As part of the SMART goal setting process, we’ve been taught to set a target for a goal – a measurement that defines whether the goal has been met or not.  It may be an amount, a percentage, a date, or some other criteria.  “Complete Microsoft Excel training class by December 31^st, 2009”, or “Lose 20 pounds by Christmas”, or some such thing.  Did you ever wonder, though, how to account for losing only 19 pounds rather than 20 by Christmas?   After all, shouldn’t 19 pounds count for something?  Usually, what we end up doing is considering losing 19 pounds as having met the goal, when technically, the goal was missed.  We didnt' actually lose 20 pounds. As a result, our goal setting and scoring at the end winds up being rather sloppy and vague in order to account for “almost-met” goals.  This leads us to start believing that falling short on a goal is okay, and pretty soon, it screws up the whole goal setting and achievement process.  At issue here is how the measurement criteria are developed.

We’ve discovered a much better process in working with clients over the years.  Instead of simply indentifying how to judge the goal and selecting a target to hit, we help them develop clear missed, met, and exceeded criteria when setting goals.  By determining these three different measurement criteria up front, the need for interpretation and “almost met” goals at the end is completely eliminated.   Setting missed, met, and exceeded criteria involves 1) setting the missed criterion, 2) setting the exceeded criterion, and 3) identifying the range between the missed and exceeded criteria as the met criterion.

Let’s take a sample business-related goal and discuss how to create measurement criteria for it:  To increase total power drill sales to $3.1 million by FYE 12/31/09.

In order to figure out what it means to meet a goal, it’s easiest to first determine what it means to clearly miss the goal.  For example, we may clearly miss the power drill sales goal if we only hit $2.8 million by FYE rather than the $3.1 million we determined earlier.  However, we’ve also thought about it and determined that it’s probably acceptable to hit $2.9 million.  This makes our $3.1 million target a little fuzzy, doesn’t it?  So, we can set the missed criteria to indicate that the goal will be clearly missed if power drill sales are less than $2.9 million by FYE 2009 (missed equals < $2.9 million). 

The next step is to identify the exceeded criterion.  The principle question to ask in this phase is,” What is clearly worth double the kudos (whatever those may be – points, benefits, bonus money, etc.) if a person exceeds this goal?”  If you think of the exceeded criterion as being a target that, if hit, is worth double the value of merely meeting the goal, you have the right idea.  In our power drill example, maybe $3.2 million isn’t worth double the points, but $3.5 million is, given the stretch that might take to get there.  If this is the case, the exceeded measurement criterion becomes anything equal to or greater than $3.5 million in power drill sales. 

So far, we have the missed criterion set at anything less than $2.9 million and exceeded set at anything equal to or greater than $3.5 million.  So what becomes the met criterion, then?  It’s not really $3.1 million, is it?  The met criterion becomes a range rather than a number.   In this example, the met range is $2.9 – $3.49 million. 

Although it may seem counterintuitive to think of a goal target as a range than a number, it makes sense when you consider the reality of goal accomplishment.  Setting an arbitrary target point is essentially the same as trying to shoot a gun at a target at a shooting range.  With luck (and a lot of skill), we might hit it dead-on, but in all likelihood, we’ll miss it to one side or the other.  As with target practice, by using the missed/met/exceeded criteria, we are allowing ourselves a range of hits, a clear range of misses, and an opportunity to be rewarded for stellar performance.

To learn more about our philosophies surrounding goal setting and employee performance, click here.

Why We Don't Call KeyneLink a Performance Management System

by Kelly Nelsen

 

People ask us why we don’t call KeyneLink a performance management system.  Here’s our answer.

KeyneLink is a performance management system, but it’s unlike any other performance management system out there in the market today. Unfortunately, people have used the term “performance management” to refer to performance appraisal, and now the two have become synonymous.  True performance management requires managing the performance of organizations and the people within them on an ongoing basis.  It starts at the organizational level and extends all the way to the individual level.   A true performance management system tightly aligns the duties and goals of the people with the vision, mission, core values, and strategy of the organization.  For these reasons, true performance management is driven by top management, not by human resources. 

All of the so-called “performance management” systems out there today are really performance appraisal systems, and as such, they’re driven by human resources.  These systems have been dressed up just enough to appear as if they align with the organization’s vision and strategy, when in reality, they only give a passing nod to what the organization is trying to accomplish.  Instead, they retain the subjective, personality- and trait-based measures of the traditional performance appraisal.  They merely automate the performance appraisal process and provide some bells and whistles to make the process a little easier.  Sure, some of them incorporate goal-setting, but the goals tend to be of a personal improvement or succession planning nature and are based upon the results of the performance appraisal.  The goals in a true performance management system, on the other hand, are actionable goals that are directly based upon the organizational initiatives and step the organization closer to achieving its objectives for the year.

So, rather than to try to fight the tide and redefine performance management the way it ought to be defined, we’ve chosen to use a term that truly differentiates us from everyone else: strategy-driven execution management.  After all, KeyneLink is a system that does what a true performance management system should do: manage the execution of an organization’s strategy through its people.  Given that, the term “strategy-driven execution management system” defines KeyneLink pretty well, don’t you think?

The Easy Button Lie

by Kelly Nelsen

 

I truly wish that I could just press a button and, “Voila!” everything would be in order, the business would be taken care of, everyone would be perfectly motivated and productive, and I would be instantly transported to a warm, breezy beach where I was sipping an umbrella-garnished drink while listening to the seagulls calling overhead.  If I see one of those easy buttons, I can’t help myself – I’m inexorably drawn to pressing it in the hopes that this time, it will work.

But we all know that life just ain’t easy -- Adam and Eve had to mess it all up.  I hope they’re happy.  Because life is so doggone hard, we continually search for ways to make it easier.  If you think about it, nearly all of our inventions have something to do with that – cars, the printing press, remote controls, microwaves, computers, electricity, fast food, the wheel, shovels – I challenge you to think of an invention that wasn’t intended to make something easier.

Sometimes, though, we go a bit too far.  In the pursuit of making something easier, we actually make it harder.  Take computers, for example.  Yep, the words get put onto the paper much more quickly, but what happens when your computer crashes?  And what about all the stuff computers need to make them work?  Intricate internal workings that I can’t even begin to name, electricity, printers, internet access, a phone or DSL line…the list goes on.  Wasn’t a piece of paper and a pencil easier, for heaven’s sake?

The same can be said for many of the systems and processes in a company.  We try to press an easy button to manage our employees, thinking that if we can just fill out a form at the end of the year, that oughtta do it.  Feedback given, reward given (or not), and onto the next year we go.  We’ve even gone so far as to automate these forms with computerized programs that fill them out for you, complete with the option of making the language a little more positive or a little more negative with the click of an easy button.

Do you really think that human beings are that simple? 

We’re not machines – we’re high-maintenance pieces of uniquely individual art that continually evolve and change and look different than we did last year – if not on the outside, most certainly on the inside.  How can we hope against hope that a simple performance appraisal at the end of the year will do anything significant to change the direction of our people or our business?

No, life ain’t easy, and running an organization ain’t easy, either.  So stop buying into the lies that say that you can make the important stuff easy.  It never is, and it never will be.  Employees, just like your business, need ongoing maintenance.  And you at the top must lead this charge.  When you embrace this truth, you’ll be on your way to making your business successful. 

Or you can keep on pressing that easy button to see if it might just work one day.

For more information about managing and maintaining the performance of your organization and your employees, go to www.keyneinsight.com.

Conversations cause clarity. Clarity creates action. Actions produce results.

by Kelly Nelsen

I think we can all agree that results are what we need most in our organizations right now.  But how do you make sure you're getting not just any results, but the right results?  Results come from actions, and by initiating the right actions, the right results should follow.  But in order to initiate the right actions, you need to have a clear understanding of what is to be done.  And this clarity can only be caused by having the right conversations.

Having the right conversations is key to producing the right results.  Often, though, we take the well-traveled road of polite conversation because it's easier.  We think -- no, hope -- that the person on the other end of the conversation will read between the lines and hear what we really want them to hear rather than what we're actually saying. 

Steve Bryant, one of our long-standing clients, said it best when he quoted his late father, "The loudest voice in the room is the one you never hear."  The right conversations in an organization are sometimes the hardest ones, but they're the ones we need to be having if we really want to produce the right results.  And I think we can agree that the right results are what we need right now.

Breaking through the "Strexecution Point"

By Wayne Nelsen

Where organizations tend to falter is not in the planning process, but in managing the execution of the plan.  They fail to successfully break through what Kelly and I call the "strexecution point".  Over the next several posts I want to talk through how to ensure that your organization can break through and achieve your organizational initiatives.

So what is the strexecution point?  It's the point of transition between strategy and execution. It is at this point that many management teams seem to hit a wall and stop.  Once they have a plan, they fail to recognize the importance of dynamically managing the execution of that strategy.  Instead, they allow it to be eclipsed by the urgency of day-to-day activities.

It's no secret that many organizations are better at planning than execution.  Planning is easier than executing.  However, if I had to make a choice, I would rather run an organization that is great at execution even if it is weak in planning than an organization that is great at planning and weak in execution.  With great execution management, I can make adjustments quickly and make up for planning weaknesses.  However, no amount of planning can make up for poor execution.   

Make sure your team doesn't let up after the planning phase by putting the plan on the shelf while they go back to handling the urgency of day to day activities. You must follow through with strategy-driven execution management.  This is what will allow some organizations to thrive and take advantage of the current economic conditions to increase market share while others are focused on simply surviving.

The key to successful navigation through the strexecution point will be the subject of our next several posts.