It comes as no surprise that an essential element of planning for the New Year includes goal setting. And there’s a good chance that two of your business’s top financial metrics include revenue and profit goals. When these goals are set, company leadership creates them and they’re passed down through the rest of the organization. But, as you may know, from the time these essential metrics are set to when they’re communicated to all employees, there’s a ‘telephone’ effect and the initial sense of importance and energy is muted.
Typically, the goals for the coming year are usually similar to previous years in terms of structure and likely the numbers as well. Because of this, limited time is spent communicating the new goals as well as how the team drives success toward them. Too often, the communication is simply stated: “Here are the numbers; let’s go get them!” However, if the team sees the goals as overly aggressive or if an individual doesn’t know how his or her role can positively affect these outcomes, they won’t be motivated to drive success — even when success is tied to financial incentives. Without information about the strategy behind how the goals were developed and a deeper understanding of each department’s role, it leaves room for a mentality of: “If we hit the numbers, then I’ll get a bonus — great; but there’s not much I can do differently to make or break the outcome.”
Of course, no business leader wants to be in this situation — where you don’t have all your resources pushing the business forward and you’re ultimately less likely to achieve the goals without the full team behind them. Fortunately, there are some proactive steps you can take as a CEO to change this dynamic:
1. Establish company-wide goals.
The business’s goals should be company-wide and take into account a team effort. To accomplish this, you may need to create goals specific to each department or division that tie back up to the overall goal. But keep in mind that every person in the company should see and understand how their role impacts the bigger picture, and how they’re tied together. For instance, a company may have sales goals but many of the team members may not see how they impact sales if they’re not customer facing or out in the field. To remedy this, explain how a profit goal ties in both the revenue and expense sides of the business and how members of ancillary teams drive a direct impact.
2. Create visible, clear metrics — update them regularly.
It’s one thing to have a goal. It’s another to have the information that enables you to move toward the goal. While a regular statement of progress can be helpful, it’s only a short-term motivator. More importantly, you should help your employees identify the leading and lagging indicators of the business and how they connect to the stated goals — this ensures alignment between those goals and the behaviors within the business.
You must track these indicators regularly and make them visible. A daily, weekly, or monthly dashboard showing how the company is doing against the established metrics keeps them top of mind and helps the team connect their daily activities to the larger goals. If your goal for the month is a certain amount of sales or revenue, you need to be able to view the overall progress, but also adjust activities accordingly.
3. Define roles and implement accountability.
Your team members must be able to connect the metrics to their individual roles and know what behaviors they must prioritize to positively impact success. Each role needs defined and documented tactics so that every employee knows what and how to adjust their activities to achieve the stated goals. Employees should also regularly report on progress, which should roll up to the department, and ultimately to the company’s, metrics.
So let’s tie this all together — holistic, company-wide goals can seem overwhelming to conceptualize, but it’s very manageable to execute. Say you have an annual goal of $10 million in sales. You break this down into monthly, weekly, and daily sales goals. You identify which activities and related metrics drive sales success. Each role in the business that has accountability for sales has specific metrics and activities to which they are accountable. They’re responsible for reporting upon these regularly and are accountable for getting them done. By creating clear goals, breaking them down to more tangible bites, measuring them and reporting upon them regularly, and tying each job to specific actions and metrics, you’re able to communicate the goals to the team in an actionable way and hold each team member accountable for their role in the ultimate success.