The importance of entrenching a culture of goal setting in your young company
This article is presented to you by Performly.
Success is often thought of as a long-term abstract goal. It is not. It is a series of small goals achieved diligently over time by a group of people with a common vision for what success means. These series of small goals have to be clearly defined, communicated and executed by a team in order to achieve that long-term abstract goal.
All startups in general have a one primary goal, success. When we look at some of portfolio companies and some of the things we’ve learned over the years. We find clear evidence that startups who break-down their vision for success into small goals closely linked to overall strategy, then divide these goals across the team and proceed to monitor the execution of these goals and provide feedback on performance; see a dramatic improvement in employee and business performance. After years spent building companies we’ve learned that effective employee goal setting, aligning and tracking those goals through actions and results are critical to better execution; which in turn increases startups’ possibility of success.
Helping employees set and reach goals is a critical part of every founder’s job. Employees want to see how their work contributes to larger objectives, and setting the right goals helps make this connection more obvious to them and less abstract. Goal setting is particularly important as a mechanism for providing ongoing and year-end feedback as well. Feedback to employees and to you as a founder much like feedback on your product when you are A|B testing in the early days, helps employees and you the founder learn both your strengths and your weaknesses. A key piece of the puzzle of continuous self-improvement and something we all need in order to become better at what we do. Establishing and monitoring goals allows founder/managers to give their subordinates genuine input on their performance while motivating them to achieve more. This works the other way around too. You as a founder/manager need feedback from your team in order to improve how you as a founder/manager perform.
Although setting goals is often an essential and significant aspect of what is known in the corporate world as the performance appraisal cycle, ensuring that these goals are challenging yet attainable is what constitutes effective performance management.
Effective performance management is crucial to the success of any startup once the team starts growing and should not be taken lightly. To get started, you need to first set goals then you need to align these goals, and finally you need to monitor and track them.
Setting goals begins with communication between the founder/manager and their team members. Every team member should be prepared to discuss their beliefs about what they want to achieve and the founder/manager should be prepared to discuss areas of development to work on to meet the company’s goals. These goals should always be challenged by both sides. It’s a conversation not a rule. Something that needs to continuously evolve. These goals should also be documented so that both parties are clear on the expectations of performance.
When setting goals, one of the approaches used is the SMART model. According to this approach, goals should have the following elements:
Specific: The goal should clearly state what should be achieved
Measurable: Accomplishments should be measured according to a standard that is clear
Attainable: Goals should be challenging yet attainable and realistic
Relevant: Goals should have a direct and clear link to the company’s overall goals
Timely: Goals should have timelines with clear due dates and milestones
By clearly communicating your strategic business goals across the company, you ensure that each member of the organization can see and grasp the company’s strategic direction and have a clear understanding of how their job fits within the “Big Picture”. Making sure you and your team are aligned on strategy ensures that everyone is chasing the right dream and that everyone is working towards the same goal. Being transparent helps show people working in the company see how all of their collective efforts will eventually spell success.
None of what we talked about previously matters without tracking goals. Goal tracking has twofold benefit on both the employee and founder/manager levels. For employees, it is important to keep track and document performance and goal progress. It shows them that the goal they are working towards is becoming closer and closer. On the founder/manager level, it is empowering them to keep track of goal progress and support with assistance and resources when needed. The tracking process helps you organize, manage and review employee goals as well as keep the organization’s members focused on meaningful tasks.
Success in business is directly related to high performing employees and effective goal setting is the first step to create a high performance culture in your organization. The winning formula for effective goal setting is achieved by first setting SMART goals, aligning your team and being transparent with them and finally by continuously monitoring goal execution and providing feedback.