Structured Goal Setting

Goals are essential to the development and success of any individual or company. Achieving goals builds confidence and character. Setting goals provides focus and drive.

As Wickman writes in Traction, “One common thread unites successful people and successful companies. All of them have a habit of setting and achieving goals.”

A company without a goal is like a plane without an airport. After all, if you don’t know where you want to go, how can you get there? A properly Integrated Business knows what it wants to achieve, it has a plan on how it will achieve that goal, and it executes on that plan.

A few key concepts around goal setting include:

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OKRs⁠

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Flywheel⁠

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FACe and PACe⁠

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What Are Rocks?

“Rocks” is a term you will hear used a lot. In the parlance of the management book “Traction,” rocks are a specific type of concrete, attainable goal. According to the book, rocks are between three and seven specific strategic targets that have been identified as priorities. Rather than setting goals like “increase overall revenue,” you set a goal that is more specific.

By setting more granular goals and holding people accountable, you can ensure your company’s continued growth.

The common factor in each of the above examples is that they all require a well-defined goal and a way to accurately measure achievements. Even the flywheel should demonstrate how success in one area leads to success in another area of the business.

Not all goals or objectives will be based on a monetary outcome. For instance, the People Person will likely have a “face goal.” So the numbers they want to improve will likely be “time to hire” and “turnover.”

How can they reduce the time to hire a new employee and how can the reduce the amount of talented employees who leave the organization? They will create measurable goals to help them reduce those numbers.

So, if our ultimate goal is for these companies to grow 40 percent year-over-year, the leadership team needs to create a list of smaller, measurable goals that will take us there. Essentially, a list of numbers that they want to see in order to determine whether they are on the correct path.

Another commonality from the concepts above is that someone is accountable for each goal or procedure. In this case, someone needs to be accountable and responsible for each number, and someone needs to make decisions based on each number on the list. This is an important distinction: the person who is accountable for the number may not be the same person who is responsible for it, or the person who is making decisions based on it.

Accountability: Literally means the person who counts the number. Because the person counts the number, they’re often the one best positioned to come up with new ideas.

Decision Making: The person who makes the decison on whether you should execute on those ideas. Sometimes you can be the accountable person and the decision maker.

Responsibility: On a day to day business, this is the person that interacts with the number. They’re responsible for it on a daily basis and they must do their best not to screw it up.

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Example:

The People Person is accountable for measuring turnover. They decide that the company’s turnover has been higher than the historical average. As they do exit interviews, they find out that people are leaving because the health insurance that the company offers isn’t as good as its competitors.

They decide that the best way to help people stay is to offer better health coverage. In fact, they want to offer the best health coverage of any of the company’s competitors and doing this can become a competitive advantage.

They determine that this will cost $500 per month, per employee. The company has 30 employees, so the total monthly cost will be $15,000. The People Person explains that it will reduce turnover. As we discussed, turnover is incredibly expensive. So, even though it seems like a high monthly expense, the ROI is positive.

In this instance, the People Person is accountable. They actually counted the number and came up with the idea. The cost of the investment is high enough that the decision maker in this case will likely be the Board.

The responsible person, in this case, is the employees’ direct manager. They interact with the turnover number on a daily basis.

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