Companies and individuals can use goals to:
1. Communicate what to focus on (and what to block out)
2. Track progress and motivate employees
3. Help employees define and meet their own career development milestones
4. Show how different initiatives are connected to one another
5. Give employees direction while supporting their autonomy
Goal Setting Frameworks
The two most popular frameworks for corporate goal setting are SMART goals and OKRs.
SMART goals are commonly associated with Peter Drucker’s Management By Objectives concepts. SMART goals encourage the employee to detail how it will be accomplished, balancing expectations with reality. A SMART goal must be written in a way that answers the following criteria:
- Specific: Does the goal have specific means and ends?
- Measurable: Can the goal be measured, and how?
- Actionable: Are there specific actions that can lead to this goal?
- Relevant: Is this goal relevant to the work?
- Time-bound: What is the time frame? Is it a set deadline, or is it on a regular schedule?
Example of a non-SMART Goal: Close more business in Q1
Example of a SMART-style Goal: Close (actionable) $1M (measurable) by the end of Q1 (time-bound) by bringing in qualified leads through cold calls and demos (specific and relevant)
Objectives and Key Results (OKRs) are often organized at the company, team, and individual level and define larger objectives and several measurable results that track progress. OKRs divide the goal into the achievement and any measurable actions that support it.
Example OKR-style Goal: Close $1M in business by the end of Q1
Example Key Results:
- Average 50 cold calls a day in November/December
- Generate a total of $3M in qualified pipeline by January 1
- Achieve a close rate of 33% in Q1
For a little more context on OKRs, go here.
Regardless of the framework, companies have to decide whether they want goals to emphasize employee performance and development or operational alignment. Grouping goals together by team, department, or theme is a good idea, but enforcing strict alignment can be a heavy burden on companies because it can emphasize compliance over flexibility, performance, and innovation. With strict alignment, any missed task — because an employee is on leave, because one team is taking longer than they planned for, because of any unexpected change -- throws off the whole goal tree. This can lead to a lot of needless extra work around re-alignment, effectively punishing everyone for a small shift that could actually be dealt with on a much smaller level.
Directionally associating goals via tags, teams, etc., however, means using goals to motivate employees rather than enforcing alignment.
Here’s a sample goal cycle we suggest for employee-centric companies:
- Set 2–4 company goals per quarter. Make these goals public to every employee in the company. Talk about them at an all-hands at the beginning of each quarter.
- Similarly, ask departments and employees to set their own goals at the beginning of each quarter.
- Discuss goals at the end of each quarter. Talk about how goals were met (or not), whether the goals were worthwhile to pursue, and how you might be able to set better goals next cycle. If you can, integrate goals into a quarterly check-in style review.
- Don’t tie goals directly to compensation. You can and should discuss goals during performance reviews as part of an overall assessment of an employee’s performance, but there should not a one to one correlation here. (Revenue generating roles are a possible exception.)