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Why do companies need goals?
Clearly defined goals help us to align our actions and activities. For example, if we go hiking, we want to be on the top of the mountain at some point. In order to achieve this goal, we consider which route we choose, how much provisions we need, whether we should take an escort with us. So we are looking very closely at what we need to do to actually see the world from the summit.
What often happens unconsciously and automatically while hiking can also be taken into our daily routine. Long-term success requires that we know in which direction we want to move and what goal we are working towards. But it’s not enough just to throw a few goals into the room. There are a few things to keep in mind when it is important for companies to be objective.
Pitfalls for business goals
Goals are supposedly defined quickly. Immediately, we think of keywords such as growth, increasing market shares or improving quality. However, we often overlook the fact that different areas of the company can naturally have different goals. Therefore, it is first and foremost necessary to define company objectives, which can then be broken down to the individual divisions of the company. So every company needs a long-term corporate strategy to achieve these goals.
Goals, however, only make sense if we can measure whether the objectives have actually been achieved. The achievement of the objectives must therefore be demonstrated by facts. Otherwise, objectives are not comprehensible or transparent, are subjectively assessed and, in the worst case, watered down. The motivation in the teams decreases, because each team member interprets the goals differently and it is more or less in the eye of the beholder whether a goal has been achieved. Everyone should be able to see clearly what contribution he or she has made to achieving the objective. Otherwise, the performance suffers.
Wishes and goals
The objective often overlooks the fact that there is a difference between desires and objectives. Perhaps a mountaineer would like to climb the summit in three hours. However, due to the length and nature of the route, this is simply not possible. Objectives must therefore be realistic. Because no one likes to commit to something that is impossible from the beginning. The SMART Goals approach helps to avoid these pitfalls. SMART is the acronym for
- Specific
- Measurable
- Accountable
- Realistic
- Timely
Objectives should always be examined with regard to these five criteria. Performance management, i.e. the evaluation of the service provided, is only possible if key figures can prove whether a goal has been achieved or not.
These criteria should therefore be understood as a guide. They help to define objectives in such a way that they are transparent and comprehensible. That implementation with the available resources is possible in the time it is intended. And that employees in the company can focus on their contribution to achieving the goals and are not busy understanding complicated goals or constantly questioning them.
When the margin for interpretation flattens a target
Objectives must be structured in such a way that all those who work towards the goal have an equal view and understanding of what the goal actually is. It is therefore important to describe targets as specificly as possible. This is best achieved with the five W-questions Who, What, Where, When and Why? Once these issues have been clearly resolved, the objective is clearly described. And it is easy for all those who are working to achieve the goal to deduce what contribution they must make. If one of the questions cannot be answered, it appears that the objective has not yet been sufficiently described.
When will a goal be achieved?
One of the biggest mistakes in defining goals is that it is often difficult to assess whether it has actually been achieved. This leads to annoyance in the employee interview, if it is not possible to clearly prove whether a goal has been achieved by means of key figures. Fair and fair performance management is not possible in this way. If the target can be expressed in key figures, it is measurable (measurable). Key figures create facts and also show whether a target may even have been overachieved. Dashboards help with visualization, so employees see where they stand every day. And management can quickly understand where there are discrepancies.
Desire or reality: Setting realistic goals
We are happy to be guided by our wishes in terms of objectives. On the one hand, because we want to impress and look for a challenge, on the other hand, because we often cannot assess what resources or timeframe is appropriate to achieve a goal. We should therefore keep reminding ourselves that objectives must be specific and that only then will we have the opportunity to assess what resources or how much time we will need.
Unrealistic goals are one of the biggest motivational killers and cause dismay. Therefore, it is important to check very carefully whether the existing resources such as employees, machines, tools can be used to achieve the goal in the desired time. If this is not the case, the target must be adjusted or the resource situation improved. Realistic goals increase performance because they are challenging yet fair.
Why it’s worth working with SMART Goals
An orientation as to what is to be achieved is not only a guide to orientation and serves as motivation. It is simply an indispensable necessity to set up a company and to derive the corporate strategy. It must be clear where the journey should go. And these goals must be lived and not just written down.
SMART Goals help define goals so that everyone in the organization can understand them and understand their benefits. That everyone can integrate them into their daily work and do their part to achieve them. The approach also quickly reveals where there are still ambiguities and where improvements need to be made. It is easy to apply and the status of the implementation can be shown daily through a dashboard. It gives a clear orientation and will be accepted quickly. In the long run, a formula that promises success.
