Why organisations should set goals and how board-Level directors can come up with a vision that inspires teams.
“There are two types of goals. Performance goals measure how the organisation operates. Mission goals challenge the organisation to reach higher for the benefit of others. Both are measurable.
Setting missions, targets and goals in an organisation can change behaviours in a dramatic manner. It focuses the energy and activities of the business in a way that drives revenue and outcomes that organic growth normally can’t, transforming the chances of success and reducing the risks. This is very applicable at SME level and continues right up to board level in large organisations.
The mission statement of a business defines the company’s function, its purpose, its aims, its ethos and what it stands for. Essentially its reason for being and the manner in which it will achieve this.
In most organisations the mission will outline aims and goals. This allows a strategy to be developed and then targets. These then provide the framework for a plan and then a plan covers a series of actions that when delivered against the targets, delivers the plan against the strategy and achieves the goals in accordance with the mission. It is therefore imperative that this is carefully planned, crafted and owned by the directors in smaller companies or board members of a larger organisation.
Defining a mission gives an organisation, and more importantly the employees, a sense of purpose. Daniel H Pink in his book ‘Drive’, outlines the key components for committed and productive teams as ‘purpose’, ‘autonomy’ and ‘mastery’. Setting a mission with derived goals ticks the first, ‘purpose’. Setting stretch targets allows ‘mastery’ of the challenge and then the right working environment allows for ‘autonomy’ in the delivery.
To develop the mission its important that a board of directors or management team creates some time away from the operational norm. Outside the normal board or management meetings, without the distraction of everyday strategic or operational challenges to consider the values, behaviours and outcomes that are important for the organisation. To decide on the direction of the business and route forward.
Having decided on the mission it is critical to communicate the mission to the organisation, refer to it frequently in business updates and ensure it is the guiding principle that board meetings, decision making and management meetings are held going forward.
It is imperative that those outlining the mission and defining the organisations goals and targets are seen to own them by the employees and management teams. If the mission ethos and behaviours are not the embodiment of their actions then the teams will not follow and commit the extra mile to deliver against targets.
The ‘owners’ of the mission need to be seen to be driving the organisation, leading by example, monitoring progress and supporting the effort they are expecting from the team, and at least appearing to be involved.
Short term targets can drive short term achievements, often way beyond the expectation of the teams themselves. I have often seen a team set a target that’s challenging with a team expectation of possibly 20–30% improvement over current levels, but actually achieve 75–100% of the target as the sense of purpose drives commitment focus and hard work therefore generating outputs beyond even the teams own expectations.
Mission goals can steer and drive an organisation to achieve great things. Setting stretch targets for the team can be productive but over use can lead to the opposite. Using a raised target continuously to stretch the team’s performance a few times is useful but continuously with a target that in reality is never actually met, can cause burnout, falling morale and an air of resignation that it doesn’t matter whether they achieve it or not. Sustained pressure can lead to stress, higher absenteeism and illness and eventually staff seeking other employment!
Separating the mission goals for the organisation from the short term goals and actions to achieve them is important. The board focusses on the former and the directors/management team the latter.
In the end employees who work against clear, worthwhile, ethical or altruistic missions are more likely to be productive, committed and receptive to having to deliver challenging targets and more likely to achieve them when they do.