How to Manage Your Goals and Metrics
The Key to Hitting Business Metrics: Reduce the Impossible to the Possible
Every year, companies and businesses establish their annual goals and performance targets. At some point in time, responsibility for achieving those objectives is placed into the hands of managers and individual teams, often with minimal direction. It’s the inevitable “go do this” behavior that we see from many executives today. And despite a lack of direction, most managers fail to map any sort of path towards success. In doing so, managers and business leaders will leave their performance metrics up to chance. Hope, my friends, is a bad strategy.
Rather than testing your luck like you’re at a roulette table, there is a better way for you as a manager to deliver real results in support of your business metrics. Well before you begin to focus on execution, it is essential that you create a plan of some sort to serve as a basic a roadmap for achieving your goals. Further, this roadmap should tie achievement of the plan to the individual performance of employees on your team. To illustrate this in simple terms, take for example the universal metric of a sales goal. You will often hear people in Sales and Marketing positions refer to their ‘quota.’ If you were to add up these quotas across an organization, you would be relatively close to the company’s projected sales.
Yes, I’m advocating the use of the classic “divide and conquer” approach. Though in some settings, divide and conquer is not a great strategy, it can actually be very effective both in terms of meeting performance metrics, and effectively managing your team when done properly. Without further ado, here is how you map a success strategy that will truly work:
1. Calibrate Expectations
The first part of your strategy should involve confirmation and clarification of expectations. What are the metrics? What does the business expect, and how exactly should you consider your goals fulfilled? Are there formal definitions you need to be familiar with?
To effectively manage metrics, you need to spend some time digging into the details, so you can determine what you need to do, and what challenges you may encounter along the way. Be sure to know the formal definition of the metrics as recognized by your firm.
2. Plan Ahead
The next part of the strategy requires planning and mapping. Once you know the definition of your goals, you can then embark on creating your plan to meet them. While some businesses may use a Balanced Scorecard or other formal reporting method to monitor group performance, not all organizations do so. Thus, be sure to create a simple tool, like the one we’ve provided on the Manager Tools and Templates page, to help you track the progress towards each goal over the course of the year.
3. Assign Owners
Now that you’ve identified what you’re going to do, the next step is to determine who will do it. That is, to whom will you assign the various tasks? This is perhaps the most important step in outlining an effective strategy. If you have a certain cost reduction target that you department must obtain, for example, spend some time figuring out how such a value can be achieved and assign smaller targets to each of your individual employees to manage.
A good way to start this process is to look at your employees and assume a standard contribution by position within your reporting structure. Returning to our cost reduction example for instance, start by having your associate buyers achieve 3% in cost reduction per account. Then, have your senior buyers obtain 5% from their suppliers, and your lead buyers achieve 7% cost reduction on their accounts. You can then modify such targets at the individual level based on the specific workload and objectives for each employee.
4. Plan to Overachieve
Face it. Something will always come up that will hinder progress. When it comes to managing metrics, follow the number one rule in sports: the best offense is a great defense. If you are expected to deliver 5 new products in the coming year, plan on delivering 7. This will give you some margin of error when unexpected circumstances arise. If you need to hold 12 customer feedback sessions, assign one to each of your 15 employees to make sure you can get to your target value.
5. Don’t Procrastinate
The fourth step of your strategy may sound like something your parents would tell when you were a teenager, but rest assured, it is a key piece of effective execution. Any successful strategy leverages the power of incremental progress and your plan to achieve metrics is no different.
Assigning owners for each item is not enough. Once you have outlined what you need to do, and who will do it, shift your attention to when you plan to deliver. Deliberately set yourself up at a pace to be successful. Back to our new product example, if you need to have 5 new product releases this year, schedule them to be about every other month. This will, in turn, tell your employees assigned to those projects when they need to complete their work. Don’t wait until the last 6 weeks of the year to hit your numbers. If you jump into every new year with a plan in your hand, you’ll leave your competitors in the dust.
How this Approach Will Help YOU Succeed
As the manager, your department and team’s performance is a reflection of you and your ability to lead. Thus having a strategy to meet your goals will make both your employees and you as the manager successful. Here are some of the additional benefits of the divide and conquer approach to metrics:
1. When you assign components of the team goals onto individuals, you will invoke a sense of teamwork. When employees know that their individual performance will directly reflect on the team’s overall performance, and that their peers are relying on them, it creates a sense of shared success.
2. The goals flowed down from a organization are often ambitious and intimidating. But by breaking down the impossible to the possible – dividing up the overall objectives into smaller pieces – it is easier to monitor progress.
3. As a manager, breaking down department goals will help you keep in contact with your employees. Regular follow-up and check-ins will ensure you are making your rounds and engaging your employees on a regular basis.
4. At the end of the year, when the numbers are in, this approach will help you clearly and objectively measure the performance of your employees. Afterall, you will have a black and white trail of information to measure their contributions to the team and their overall effectiveness.
Putting this Strategy to the Test
To illustrate the effectiveness of this approach, I offer this brief example: In late 2012, I was asked to take over a department in my corporation that was underperforming. I was tasked with turning around the group.
Like many firms, the business used a tracker to monitor performance and progress towards goals over the course of the year. When I took over the team, however, the tracker was literally “red” from top to bottom. The only green metric was the budget. And the only reason it was green was because we had not filled an open position. Had we done so, the budget would have been red as well. All metrics were off course, if not lost at sea. With limited exception, none could not be resurrected by year-end.
The team had other issues – lack of accountability, lack of vision and relatively poor alignment in what everyone was doing. The year marched to a close. We managed to pull a few metrics in, but for the most part, it was a dismal year and I was now the one who had to do all the explaining. Expectations of massive improvement from the top were clear.
A new year started January 1. When I published the metric tracker that I had to report to the executives, the team was taken back. They had never seen it before, and had no idea that performance was so far off. We then set out on a mission to get our metric tracker green. Working with my team, we developed a very simple pact: collective success or collective failure. We also looked at our metrics for the new year and broke them down and tied them to the contribution of the individuals. We planned to overachieve as a means of protect ourselves should we encounter unforeseen circumstances. Twelve months later, our tracker was nearly green top to bottom, with my team being praised as one of the best examples of execution in 2013. We did the same in 2014.
The beauty to this approach from my experience was the fact that it not only broke down the team goals to small pieces, but it also created a form of unity and pride across the team. The team members developed an ‘all-in’ mentality that they shared and it has kept the team focussed on performance and meeting our goals ever since.