How do you Set Goals in your Organisation?

Transcript

Karen K  00:01

And I got a press record. Oh, I'll turn my video off. Yeah. Okay.

Lachy Gray  00:11

Ready? Three, two. Today we're talking about goals, which are, of course aspirations that we set every now and then in a spirit of optimism. And then somehow the daily grind seems to get in the way. Of course, I mean, tongue in cheek there. But setting goals is one of those topics that we've all got an opinion on, whether that's to promote the goal setting approach that works best for us all to lament the whole process is a waste of time and not worth the effort. And goal setting really is a divisive topic seems to be up there with politics and religion at the dinner table. So Karen, what are your thoughts on on goal setting in business?

Karen K  00:52

Yeah, I like politics and religion at the table. Are there when it comes to personal goals? Yeah. Quite interesting conversations. Yeah, I think in a business sense. I often come across businesses that don't have set goals. And they may have tried it at some point. Or they may not have done it at all, but they don't seem to be very well embedded into organizations. And I was thinking about you know why that would be when we were considering planning out this episode. And you know, most often I come across people using different systems. So Eos, which is from the book traction by Gino Wickman OKRs, which is measured what matters and the balanced scorecard. And, you know, even if you go even more old school, you may even come across management by objectives, the old Peter Drucker book from the 50s which you know, is still used and still valid in many situations today. But the companies that I work with because they're under 100 employees, usually those processes just get too complicated and difficult, and that's why I find they tend to let them go. So I was interested to know what different systems or methodologies that you've used Locky.

Lachy Gray  02:11

Yeah, it's interesting, isn't it sort of start with the best intentions and then it has sort of falls by the wayside. Certainly been my experience in the businesses I've worked for and then there's also at ya know, I've used a bunch of different ones, smart KPIs, and OKRs balanced scorecard. And right now, at IANA, we're trying a new approach that includes bits and pieces from various approaches from balanced scorecard. And then sort of similar to key results from OKRs, which might give you some insight into our success with each framework. And, actually, I think the goals are easy to set and hard to follow. And one thing I've learned is that you're setting the goal framework up whichever one you choose. It's always felt like the hard part since it requires research and planning, you got to implement it, and you've got to get the rest of the team on board. And then time to actually use it and set goals for whatever the time period is, and then communicate them out. But there's also the next part, which is also hard. And that's actually measuring the goals and showing progress against them. So do you see measurement done? Well, Karen?

Karen K  03:26

Yeah, not often. And even just in what you were saying, right, then it sounds like a lot of work doesn't like you got to research the goals. You know, plan them out, implement them, get everyone on board. And yeah, and that's why it often is not done well. And I think that because it's not done well and people aren't really measuring what's going on in their organizations. I do think that's contributed to many businesses returning to full time office based work as well. It was just too tricky and complicated to have people working from home if they don't have clear goals for them as individuals or for their business. So you just default back to what we know which is everyone's in the office and you just got this psychological belief that if they're even there, they must be working. But, you know, like you mentioned, you know, we use a simple framework with our clients, which is essentially taking bits and pieces from all different things and creating a really simple, a balanced scorecard essentially, which has overarching company goals, and then the objectives which we try and instill in people to have smart objectives. So if you haven't come across the term it stands for specific, measurable, attainable, realistic and time bound, and then creating those to match those overarching goals and cascade through the organization. And it sounds really simple, doesn't it? Like I just come up with, you know, three to five goals for my business and I cascade it through everybody. But even in small businesses, you know, that can be tricky. The other thing I see people trip up on is the amount of goals so the amount of strategic plans that we'll have, you know, here's my 32 business goals. And now I gotta allocate that out to everybody. So, you know, it's really just about having those really big rocks. So the three to five things that the business has is non negotiables, and you make sure that everybody only has three to five. So it's really just trying to keep things quite simple, focused and achievable.

Lachy Gray  05:36

And so that framework that you take your clients through how often do you recommend that that's reviewed and updated?

Karen K  05:45

Yeah, we tie it into the quarterly performance discussions. So whatever it is, you want to call that. So we will call it check ins, so we'll just call them quarterly chats. So it's actually tied in all together. So it's basically you know, how are you going? What's coming up in the next quarter? Let's have a look at your goals. Let's make sure that they're still relevant that they're still on track. Do we have any barriers and then let's talk about your development. So the initial setup does take longer, and that initial meeting, you know, the start of the year, the financial year, could be over an hour, let alone the you know, bits and pieces on either side of that working out what the right goals are. But then every quarter, it should really just be a half an hour, check in chat unless the goals have changed. For some reason, but you know, I do have people that will say, Well, that's an awful lot. But if you if you're going to subscribe to the idea that we're better off having goals in our business, then I like to do it any less, then quarterly, but they're just they're going to be meaningless and you know, assuming you've probably come across this before as well, where you have the yearly annual performance review, which includes the goal setting and checking and, you know, gosh, I've seen some really horrendous administrative processes trying to, you know, force some rigor into those but it doesn't change at the end of the day. If you're only looking at your goals once a year, then it's a ticket flick exercise, it can't be anything else.

Lachy Gray  07:18

Yeah, and that's certainly my experience. I look at the rate of change in business. I think it has to be reviewed regularly. We do quarterly as well, I think it's, it feels about right, even though we've just done a recently for the quarter that we're in and it felt really fast. So since we started the year, I liked the idea of rocks. I think it was Stephen Covey who, who spoke to this so starting with the most important things first, and I remember, an illustration was actually a video and it was a big jar. And it was being filled with rocks. And the point is if you start by adding the big rocks first, then there's space to add in smaller rocks and pebbles and gravel and sand and so on. But if you start with the pebbles, you really quickly run out of room for the big rocks. And I think as a visual metaphor for me, I was like, ah, that really makes sense because as you say, it's easy to reel off a whole bunch of goals because of course you want to do all the things. But in that approach, it's really easy to do none, because you don't even know where to start.

Karen K  08:39

Yeah, well that's right. And yeah, it was Kobe, and there are some great videos on YouTube. And even if you just Google an image of big rocks, you'll see people that have done it with the jars. And it stuck with me as well. Maybe years ago, I did some form of leadership training and the facilitator had the jar with the rocks and pebbles in the sand. And you know, if you think about it, like most people start their day with fans. So you know, we check emails, look at our calendar for the day say hi to our colleagues. So it is quite a big mindset shift and it takes a lot of intention to actually move away from spending half your day on sand to say okay, what am I big rocks so the the highest priority projects and tasks and except that you're just going to get to those pebbles which are still urgent or important. And we're still going to get to the sand which is not so important, but you know, we still need to do it. Or we find a way to delegate our pebbles and sand to someone else because they then become their big rocks. It'd be easier just to have that busy work and just respond to emails all day long then to actually sit down and go okay, what is my revenue target? You know, what am I? What are my costs for this quarter? What's our NPS what are our customers say? Like? We don't often like to do that because if we're not on track, it doesn't make us feel good. So, you know, it's much easier just to do that busy work.

Lachy Gray  10:09

Always and I find myself doing busy work even though I you know, I understand this. And I'm trying to practice it and have done for a long time so easy to get stuck in the small stuff. Just getting those feels like a little win. Now the way the busy work. I think we've we've chosen to be to be deliberate in this episode. I'm not gonna go through framework by framework, because we'll be here forever. But I think for me, regardless of the framework that that you use, there's a few principles that need to be met. So just want to run through those now. I mean, the first one I think is that the goal needs to matter. And by that I mean that if we achieve it, we're cheering and celebrating. The second one, as you touched on that the goals cascade in meaning. I think it's actually quite hard to get right. I think it makes sense that goals set in isolation, are doomed to fail, especially if they depend on input from other teams, other people doing things. We losing some of that control. And Jana we talked to her is what I'm doing this week, contributing to my team goals. Which are themselves contributing to IANA as goals between 20 to the cascading is really important, but again, in my experience does take time to really get that right and also to communicate it out regularly. I think the goal needs to be measurable. It's setting goals is easy. It's easy to come up with a whole bunch of goals we want to achieve for a time period. tracking them is hard. And it's actually one element I like about OKRs and where the K and R stands for key results that they should be measurable. You're forced to ask well how are we going to measure this consistently? And ideally, frequently, so it's a true indication of progress. And how are we going to measure it? Are we relying on a tool or another team to give us the data to track our goal and these are some of the areas where we've been tripped up in the past when it comes to actually trying to get the data out? We realize oh, it's not accurate.

Karen K  12:26

Yeah, and if it's taking you longer to get the data than it is to actually even do the goal in the first place. You know, there's a problem, don't you? Yeah. It's got it got to be easy to measure. Yeah.

Lachy Gray  12:40

I think the progress needs to be visible. Then we've discovered that showing progress or lack of is a strong motivator, especially if the wider team has visibility. It encourages accountability. And if we think about this for ourselves, I set a personal goal. So I want to get fit. Go to the middle of the year. keep to myself, it's easy to ignore. There's no real repercussions unless the goal itself has consequences. But there's no one holding me accountable. If I set a goal that's public, I share with my teammates, they can see progress against it. I'm more motivated to get stuff done and move the needle forward. And I think I'm also more likely to ask for help if I need to. And we've actually reverted to an Excel spreadsheet to track the top 12 metrics in our business and we update them monthly, everyone can see them. And that took us months of back and forth to nail those 12 Because we start with one on the outset sounded really important. And then we say Oh, do we really care about that? Are we going to change our decision making off the back of it, you know, if it goes up or down, it doesn't actually mean anything. And so many metrics don't actually meet that criteria.

Karen K  14:00

Yeah, and you can find that many of them can actually cross over and really give you the same thing as well. Or just in a slightly different ways. So yeah, sometimes I'll find people look at like retention of customers. But then they're also looking at things like well, you know, how many customers gave us a particular score on a survey. And they are slightly different, but they're very interrelated. And I think that's one of those examples where it's like, well, which ones are actually the most important to your business and like you said, which one is going to move that needle? And, you know, really make an impact and potentially change something that we're doing in the business? Yeah.

Lachy Gray  14:45

Yeah, exactly. And we talked about vanity metrics a lot. And I think, you know, so revenue could be a vanity metric, even. It's also a lagging indicator. I mean, it's, it tells you about something that happened in the past. Yes. So instead, we've tried to make for us we think about number of paid learners on Anjana. That's something that the whole team can contribute towards to and then all the way back to say in the sales process, number of sales touchpoints or calls that it might make in a week. It was day that will lead to revenue. But it gives us a better indication, week in week out of how we're actually tracking. The lot of calibration. I've discovered, which I think is okay, if you go we go in with an open mindset. And we know that this is going to change to about finding the best metrics for the business and the team I think and that will change over time. And lastly, I think regular reviews of the goals and now progress so each quarter what did we say that we do want to achieve? What did we actually achieve? What went wrong? What have we learned? Do it as a team, share the results and then use those results to inform the next round of goal setting and on we go is this just an iterative cycle? That never ends? Really? So I'm interested Ken, why do you think we should set goals?

Karen K  16:21

Yeah, that's a good question. And there's a ton of research in this and art when I did my post grad in psychology, and I think this was a whole topic at one point about all the research around setting goals because it goes into so many things. So if I had to summarize it, I think that you know, the four things that the research really shows us is that goals give us direction and meaning and purpose. They provide motivation, inspiration and engagement to our employees. They help us to measure performance and course correct if we're not going in the right direction, and they help us celebrate wins. And achievements. So I think if we reflect on those things, they're all pretty positive, great things to have in our business. And then if we look at you know, there's also a lot of research into personal goal setting. Sorry, I need to pause so I can take some water okay. And I will tell MJ to look for the pause there. 1043. And luck in life, and we're actually researchers who came up with five principles of goal setting, which are still used today, and I won't go into them in detail. We will put them onto the website with this episode. But those five principles with goals are to have commitment clarity, challenge, complexity, and feedback. And then I thought, You know what, the statistics are actually out there for those that are listening that like to have some numbers. And Kaplan and Norton who wrote balanced scorecard, have a set of statistics that are very frequently referred to we'll put the link to the Fast Company article, where I got these from onto the website as well. And I found these really fascinating. So nine out of 10 companies fail to execute strategy which is interesting, because I would think it would have been on at a time because a lot of strategies that I see written people take an easier route. So you tend to write things that you know were achievable. It's just a human condition. So I found that interesting. That they found that nine out of 10 failed to execute the strategy. Any 25% of managers have incentives linked to strategy, which is like well, what what are their incentives linked to them? It's not linked to the strategy of the business. Only 5% of the workforce understand the strategy 85% of executive teams spend less than one hour per month discussing strategy which I can definitely see how that happens. I think a lot of executive teams go into meetings and just talk about what's happening that month, rather than actually what's happening in the business holistically. And 60% of organizations don't link their budgets to the strategies. So back to your original question of why do we set goals? Well, if I look at those things, so there's lots of research about how beneficial they are to us as individuals and also to our businesses. And then we look at those very concerning statistics, if we can be on the other side of those statistics, and surely that gives us a competitive advantage.

Lachy Gray  20:03

Think so for sure. I mean, some of those are frightening. Yeah. 5% of the workforce understanding the strategy. I mean, what do you think's going on there?

Karen K  20:15

I think the strategy may not be very clear, or it's too complicated. You know, we're not getting into that three to five key things or you know, like you said, you have those 12 metrics. So, you know, just keeping things very simple is important. And a lot of the times like if you download any form of strategic plan on the internet that had been published, there long documents aren't there aren't many people that are going to wade through them and and I think quite often as businesses get much larger, and you get more layers as well. They just become meaningless to a lot of employees because they just think, well, you know, my job is doing a, b, and c they just do not see how that links out into that strategy. And that's where those bigger companies you tend to get a bit of us and them with, you know, the workers and the executives.

Lachy Gray  21:14

Yeah, well I think that's absolutely right. And I think for the leadership and the sea level, they're probably heavily incentivized on delivering against that strategy. It means a lot to them. And they probably diminishes doesn't it as a digger down in especially a large business? Yes, because at the end of the day, what's what's changes for someone? If I'm, if I'm an employee and a team miles away from the CEO, has, how's my day to day gonna change? Probably not very much. And I've seen these huge documents as well. as well. I like the idea of the one page strategy, which is, it is hard it's very hard to do, especially as the business grows, because you almost feel like you need to put in more detail to look like it's being considered and really thought about that actually, as is often the case, the simpler, something appears there's often a ton of work going on behind it to get to that point.

Karen K  22:22

Yes. And so true. Right? really been talking about it's very hard to distill that information.

Lachy Gray  22:31

And what about the what about the state of 60% of organizations don't link budgets to strategy. That's seems strange.

Karen K  22:43

Yeah, linking it to well, they're linking it to Yeah, yeah. And that might be where it comes to. We've got metrics that perhaps aren't the things that we should be actually focusing on. If we're not thinking it through or, you know, we're just maybe our strategy isn't good. So it's not used? Yeah.

Lachy Gray  23:09

Exactly. Well, we've we've covered a fair bit of ground and we could go on for far longer. But to recap and pull out some key takeaways from today's episode. I think I really like the points that you made at the end there, Karen that why should be setting goals. They give us direction and and purpose and they can motivate us and the importance of being able to measure the goal and have it matter can help a lot and it encourages us to celebrate the wins and especially small wins. It can be easy to wait for a big win at the end of the year, but actually having a reason to celebrate a small win can feel really good and it's good for team morale, as well. So I got a lot out of today's episode, Karen, thank you. And

Karen K  24:03

I really liked your point around vanity metrics. And I think if there's if there's one thing that I would take out today is yeah, when you're setting those goals and you're setting those metrics is really have a look and go you know are we just doing that because we know that we can hit that particular metric or because that's just something traditionally that people look at doesn't actually matter to our business. I think that's really important. And yeah, is it lagging or is it leading? How important is it going to be is it going to change our decision making?

Lachy Gray  24:38

Yeah, for sure. So links to anything that we've discussed will be on our websites, amplify hr.com Today, you then jano.com Today, you just follow the links to the podcast section. If you've received value from this episode, we'd love it. If you can leave a rating or review or ever at Apple podcasts

Karen K  24:58

coming up in the next episode where we are going to continue the discussion but actually with a focus on scorecards so you know we've mentioned a few times today about metrics and things that are worth focusing on. So we're going to have a discussion about you know, where do you start with having business and individual scorecards and how they tie into that overarching goal setting.

Lachy Gray  25:20

So that's coming up in two weeks from now. So if you click the subscribe button, you'll get notified when that is available. Any final thoughts? Karen?

Karen K  25:30

I think just if you're listening to this and wondering if goal settings worth it, then I would encourage you to have a look into some of that research and also have a look at the current status of your business. And if you are looking to scale up and grow your business then you know I would really encourage you to focus on getting that goal setting nailed, which as like I said will take time and getting those metrics together yet could take you months to really nail that.

Lachy Gray  26:03

Probably said Well, thanks so much for joining us and we'll see you next time on the Make It Work podcast

Karen K  26:17

Oh, what's that? 26 minutes? Yeah, pretty good. By the time the music and everything goes in, it gets up to just under 30. So yeah. And Christina has emailed me back where she said Yep, she got the documents, so that's good. I'll just open that one up as well. And what time is she 11?

Lachy Gray  26:50

Yeah. I'll check with her. That she's happy with the intro Well, yeah, how I introduce her. Yeah. And I'll ask her that they're getting in touch. It's like added and confirm they're correct. And I added in that the next episode we discusses vulnerability at work. I want to check with you is that right? Got it from the spreadsheet.

Karen K  27:24

In the spreadsheet, that's probably right. Where are we? Why are we gotta live in the value of feedback. Like place design. Oh, we must have moved there. So

Lachy Gray  27:34

this is amazing.

Karen K  27:38

Oh, my goodness. Okay, hang on. Yeah, so that vulnerability at work. Yes, so that's just us. That's not a guest Yes. That's fine. We're recording at the sixth of May put the Google Doc for this. Okay, so this is episode 11. This is now episode seven which is the second stop moving our episodes around.

Lachy Gray  28:21

With with the guests. Yes. All right. So how long do we do with Peter?

Karen K  28:34

I think we kept it to like 45 minutes. So yeah, I'll say the same to her that. Yeah, well, we'll try and keep it as best we can to 45 I know we had up to 60 but I think that it's a long time for people to long term to keep engaged with something. Yeah. So some of that didn't know that. We'll keep it to 45. And we'll just do the same thing as we did last time. I'll just stick it in the chat when we're getting close.

Lachy Gray  29:05

Yeah, yeah, that's helpful. I'm just gonna do a bathroom break.

Karen K  29:10

Yeah, me too. All right. And I know I've got a different zoom the I don't know it's the same link or not. So anyway, I'll leave this one and I'll go into the next one. I don't know it's the same link so yes, I'll end this meeting and then just jump into the.