Perhaps you’re thinking, “My goal is pretty self-explanatory: Make as much money as possible. Why do I need to write that down?”
That’s a valid question. But according to a landmark Harvard study, setting goals and writing down your objectives enhances your motivation and increases your likelihood of success. Moreover, companies that had written objectives showed a 700 percent increase in growth versus those that didn’t.
The researchers performed hundreds of correlational and experimental studies. The results clearly showed that setting goals and writing them down increases success rates and your chances of achieving those goals. It also helps companies get alignment.
That's really important for an employee. Think about the people who are just bored at their job. They've got two hours of extra time to waste each day because they’ve mastered their job. As soon as they become truly efficient, they're not challenged anymore.
What people want is a higher purpose. You give them that higher purpose when you give them targets, show them what to aim for, and give them feedback on how close they are to reaching those goals. That process starts with the executive team.
Goals Drive Performance
The process of writing down your objectives should not just be done by the company’s leadership. It should be a collaborative endeavor that involves upper and middle management, as well as lower-level employees. By working with your people and negotiating your goals, they’ll take ownership of those objectives and be more motivated to accomplish them. In addition, writing down your goals and sharing them with every employee in your company:
What are SMART Goals?
For goals to be meaningful, they need to be SMART
This is important because employee goals aren’t meaningful unless they meet all five characteristics.
This is a great theory, but it’s hard to put into action. The best way to start formulating your goals is for your company’s leadership team to sit down and “mad lib” about objectives. You can use a simple formula to create smart goals:
- I will increase sales to new customers by 15 percent by Q2.
- I will streamline the new client process to reduce time for on- boarding to 30 days.
- I will create three blogs a week to generate 25 new web visitor s a month.
It’s critical to keep in mind that your objectives need to be realistic based on the resources at your disposal. That’s why your entire leadership team needs to take part in the goal setting exercise.
Operational objectives, by definition, are high-level. They’re company-wide goals.
However, these goals only generate change in behavior if they translate down to the department, team, and individual employee level. That’s where the concept of cascading goals comes in: Assigning smaller but related objectives to departments, teams, and individuals that all contribute to achieving the overall operational objectives.
When determining cascading goals, it’s critical to keep the line of sight in mind. This means your employees should be able to clearly see how their individual objectives contribute to the greater company goals. Senior managers’ goals are generally equal to the company’s goals. Junior staff’s goals are typically 80 percent related to their own personal activities, which can make it easier to for them to understand how they’re relevant.
An employee goal with a clear line of sight should know how his or her goal directly affects their team, department and the overall company goals. Since satisfied employees are key to convincing clients to purchase more of your service, this personal goal is directly and clearly relevant to the overall operational objective.
Understanding the Fear of Failure
Some business owners don’t want to write down their objectives and share them with their employees because they’re afraid to expose themselves and fail. At the same time, many employees struggle with the same fear. However, every experienced business person knows you can’t predict the future. In that sense, failure is inevitable. The best companies let their employees fail, so long as they “fail fast” and study their failures to see what they can learn from them. Don’t let fear of failure keep you from setting clear goals.
Writing down your goals increases motivation and improves your chances of success.
Defining goals should be a collaborative endeavor, because when you involve all employees, they’ll own their objectives and be more motivated to achieve them.
Written goals provide a way to tie an employee’s performance to company goals that are driven by measurable objectives—revenue, profit, and customer satisfaction—and providing positive feedback for achievements in the form of recognition and rewards.
They should be helpful to both the manager and the employee in terms of understanding and evaluating progress and goals.
Fear of failure can adversely impact your company’s success. Don’t be afraid to put your goals out there.
Fail fast, and learn from every mistake.
Make sure your goals are SMART: Specific, Measurable, Attainable, Relevant, and Time Bound.
Cascading goals refers to the practice of upper management sharing overall business objectives, and using them to develop department, team and individual employee goals. It’s important that the individual can always see how his or her objectives contribute to the larger business goals.
If you are trying to grow and scale your business, written goals are one of the keys to your financial success.