People are critical to the success of any organisation, but it would be all too easy to focus our blog on the HR and performance frameworks needed to enable employees to perform at their best. Instead, we are taking a couple of steps back to reflect on the business and strategic planning process more broadly; since thinking holistically is at the heart of our approach here at partnering2excel.
Whilst there are many ways to do strategic business planning, in our 3rd blog, we are offering up some simple techniques to improve your existing processes (irrespective of the size of your organisation) and therefore the likelihood of successfully achieving your vision.
Goals, outcomes, objectives – what’s it all about?…
For many organisations, it’s getting to the time of the year when leaders will be busy planning in performance discussions with their teams – reviewing the extent to which individual performance objectives for the past year have been achieved and agreeing new objectives for the year ahead. For some this is still an annual process, linked to reward, whilst for others there has been a move away from formal performance management processes towards a more iterative, outcome-based approach.
Alongside individual performance conversations, you may also be spending a significant amount of your time reviewing last year’s strategy, reflecting on what’s been delivered, what hasn’t and how to shape plans for the next year.
First some definitions – when we say goals, outcomes and objectives, what do we actually mean? Often, these terms are used interchangeably. Generally, a ‘goal’ refers to an achievable outcome which is broad and long term in nature. Examples could include – increase market share of product ‘a’ from x% to y% or reduce cost to income ratio to 50%. ‘Objectives’ on the other hand take these goals to a more practical level by describing the tangible and measurable actions needed to achieve the goal. Examples here could include – increase customer retention month on month by x% or reduce instances of incorrect products being delivered to customers by x%.
In terms of techniques to support the goal setting process, it’s fair to say we have seen many approaches come, go, and then return (often under a different name!). Some of the commonly used techniques include Management by Objectives; Setting SMART goals; KPIs and OKRs (Objectives and Key Results). Irrespective of what it is called or whichever method you choose to use, it’s key it aligns to your other processes and supports the culture you are trying to create in your organisation.
Here are our helpful hints for simple changes you can make to your goal setting to ensure clarity on your business’s direction of travel, and more crucially, to get your people behind it.
1. Start With Purpose
For those organisations who want to create a genuine connection with their customers, Simon Sinek argues that purpose is key. Through his research he found, whilst business leaders were very good at knowing ‘what’ they were doing and ‘how’, the purpose of ‘why’ they were doing it was often overlooked. Putting purpose at the top of the agenda and then building out the narrative with goals provides an opportunity to foster real connections with employees, customers, suppliers and other stakeholders. By doing so ‘purpose’ makes a business sustainable in the long term and a go-to for customers.
Branding can help foster these connections. Just as an external brand builds a connection between your business and your customers; your internal brand (sometimes known as employer branding) does something similar by enabling employees to better understand what your business is really about and how goals are going to be achieved. When people care about the work they are doing, the people they work with and where they work, they are not only more productive, but they are happier.
2. Be Visionary
As you reflect and reset post pandemic, create the space to understand the context your business is now operating in, immerse yourself in internal and external insight and take in broader perspectives (perhaps from other industries or your suppliers) to expand your awareness. By doing so, you will gain invaluable insight from which to drive out a clear set of goals for your business.
Insight will provide clarity on what you are going to do, and perhaps more importantly what you’re not going to do or stop doing, because it no longer aligns to your purpose. Your goals are your north star vision – targets that are long term in nature and big enough to be just out of reach. Well defined business goals are vital to help your team translate the overall vision into reality. Your goals should act as your compass, giving direction and keeping your team moving together towards success.
3. Optimise Your Business Design
Due to the complexity and ambiguity of the external environment, it’s likely you will need to regularly review your goals and strategy accordingly – agility, experimentation, learning and iteration are key. If the context you are operating in means you need to take your business in a new direction, it is important to understand what needs to be true to make it happen.
Just like people, businesses have capabilities – the ability to ‘do something’. Sometimes these capabilities may need to mature, such as improving existing customer facing channels or operations capacity to deal with increased volumes, or you may need a completely new capability, such as creating a new on-line presence for customer ordering. Through understanding the knock-on consequences to your customer channels, operational processes, technology, roles and structures you can build a solid roadmap for the changes needed to set your strategy up for success.
Our recommended approach is to consider what changes to your business design are required at the same time as you are thinking through your goals and strategy. Not only will this ensure plans are aligned, it will provide you with a degree of comfort knowing what needs to be done to make your goals achievable.
4. Create Tangible Objectives
Enabling employees to better understand what your business goals are and how they are going to be achieved is key. So, once you have clarity on your end goals and roadmap, you’ll need to break these down into measurable objectives, otherwise it will seem unachievable.
Clear measures of success should be in place for each of your objectives. Not only will these enable you to regularly monitor progress of how your business is performing and the extent to which you are achieving your objectives and end goals, but also whether objectives need to be dialled up or down.
Our recommendation is to ensure goals and objectives are written in terms of outcomes (what you ‘have/get’ at the end) rather than what you ‘do’. For example, rather than having an objective which reads ‘implement a new CRM’ (Customer Relationship Management system), an outcome focussed objective would talk about the measurable improvements you are seeking to make, for example, to retain or grow particular customer segments.
5. Engage Your Audience
Writing down your overall goals and objectives, cascading them to your teams and expecting everyone to be on the same page doesn’t always work. Effective engagement requires two-way communication, more like having a conversation rather than a cascade. Getting your people on board so they know the direction of travel and understand their contribution, will help to create a golden thread that links smaller objectives back to your overall goals.
When you’re ready to communicate your business plan, describe what will be different in the future – what the organisation will look like and how will it ‘feel’ from different perspectives. This will help to create a narrative that will resonate with employees, customers, suppliers and stakeholders and bring them on the journey with you.
Finally, don’t forget communication and engagement isn’t a one-and-done activity. Seeking input and feedback from different groups of employees, will benefit the business by having more diversity of thought, plus it’s clear that where employees feel they have been able to directly influence and shape the future they are more engaged and motivated. So, after your initial engagement activity it’s important to keep the conversation going, use surveys (such as pulse checks) to identify how plans are landing and celebrate successes (no matter how small) to move you towards your goals, learning as you go.
6. Align Your People Levers
Your people strategy is a key enabler of your business goals, therefore, involving HR at the outset to assess feasibility of options and shape your goals and objectives from a people perspective is vital. A people strategy can then be developed, which focuses on the key levers within your people offering, to align employee behaviours, skills and performance to support the achievement of your business goals and objectives.
For example, if you want to drive greater collaboration, you may need to consider your structure, e.g. remove layers and reduce hierarchy; plus you may find it helpful to introduce a performance management measure that requires people to collaborate, supported by appropriate reward and recognition for doing so. Celebrating early wins and sharing examples of what good looks like, will help to cement this as a new way of working and start longer-term behavioural shifts.
One of the key trends we are starting to see are businesses ditching their annual performance management process, in favour of a more outcome focused, iterative review approach. This approach delivers more frequent feedback and individual objective setting, plus it identifies learning and growth opportunities, which for some businesses is proving to be more beneficial than an annual review.
7. Align Culture
Your business culture can be seen in how your employees interact and work with each other. It’s the vibe of what it feels like to work somewhere. Culture is not something you can simply implement; it evolves over time based on the things you say and do.
Culture is the foundation of every organisation. A strong, supportive culture acknowledges your people are your most critical asset, and when this is aligned to your purpose, employees will thrive, giving you a competitive edge.
It was Peter Drucker who famously said, “culture eats strategy for breakfast”, yet focussing exclusively on either strategy or culture would be a mistake. On the one hand, a strategy describing the big picture vision, without understanding what is required from an organisation’s culture, could be destined to fail; especially if it doesn’t build from existing strengths. On the other, trying to evolve a culture without having a clear direction of travel risks wasting effort. Connection and alignment are, therefore, vital.
Time to wrap up…
By following these simple techniques, you will be able to create an authentic and compelling narrative for your business – with the golden thread connecting where you are going, how you will get there and what your employees contribution needs to be.
Above all, keep it simple and be guided by what works for your organisation.
We love working in partnership with organisations and teams to support them to get from where they are to where they want to be. To find out more about our experience and how we could help you, get in touch.