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5 Steps to Effective Annual Objectives and Organisational Alignment

With the year almost over a friend of mine got an email from his with a sheet of paper attached asking him to put together his 5 objectives for 2021 and remember they must be SMART! Smart being a SMART Goal which is about being Specific Measurable Achievable Realistic and Time bound.

I hate this he said, what is the point, what the heck am I supposed to come up with, they never check on them anyway. It should not be that hard I said, what are your boss's objectives and the overarching company objectives? out of those you should be able to see where you fit and suggest some objectives, and your boss will have some they want you to achieve as well.

At this point my friend gave me one of those looks like I had suddenly grown a 2nd head and insulted his family lineage at the same time. I have no idea what the boss's objectives are and certainly I am not privy to what the company objectives are if we even have them. There is some rumour we want to be a more integrated company this year but other than that, not a clue.

Sadly, my friend is not going to be alone in this sort of situation. I spoke with a client of mine who told me they had 'empowered' their employees to come up with their own objectives and they only need to shout them if they need help. So where is the alignment in the company I asked? oh, they know what they need to do he said… when I asked around it does not sound much like anyone had any idea of what the goals were. Most just did the usual we will get X% better this year or I will try harder at this and, well you get the idea.

Is it any wonder then that companies fail to achieve gains in performance? That we hear about politics and infighting, scrambling, and arguing over resources? That time frames are miss matched for getting things done and people doing things that are either at odds which what you should be doing or worse in direct opposition to another college's objectives. In short, is it any wonder that organisational alignment in many companies is terrible?

Think about Waterfalls

Setting up a successful set of objectives within an organisation is not actually that hard. Do not get me wrong, you can quickly make it hard. It can be made almost impossible; my two previous real-life examples show that. Yet it does not have to be. Objectives should cascade from the very top like a waterfall. You should be able to trace every person's objectives back to the source which is the organisational objective(s) here are a few steps to follow:

  1. As an executive or senior leadership team you need to set and communicate 2 things
    • The overarching theme or direction for the year that all objectives should hang off. It must be simple to communicate, easy to get behind and have an end point so you know it has been achieved. It needs to be communicated to the entire organisation once it's decided and before any objectives are set at lower levels as it helps to focus everyone's thinking. 
    • A set of top-level company objectives that will contribute to delivering that top level theme, that the executive team will champion each receiving 100% responsibility to hitting 1 (or 2 Max) of these big goals. They maw well have a couple of lower-level objectives as well
  2. The exec team then communicate this top-level theme and share their objectives with their direct reports and asking them to come up with their departmental objectives that are going to contribute to the overall annual theme and the executive objectives. 
  3. The department managers should share both their objectives and where possible the executive objectives with their direct reports along with reinforcing the overarching theme for the year so that everyone understands how it fits together. 
  4. At each level, as objectives are created, they need to be discussed with the next level up to gain agreement that they meet the needs of the business and will help the person grow that year. It is also a chance to ensure there are no competing objectives and no duplicate objectives, either of which can set up unneeded friction. There will be discussions around time frames to ensure that they dovetail into each other, there is no point delivering an objective in October for example if another objective is reliant on it to finish in June. 
  5. Share all the individual objectives out across the organisation. Talk about them, publish them on a portal for everyone to see and reference. This should also include the ability to see progress and updates. This does a couple of things, firstly it ensures that everyone knows what is driving the actions of each person. There are no hidden agendas, surprises or people crossing swords. Secondly it allows others to identify areas where they can work together and achieve their goings in a sympathetic way, usually quicker and easier than previously thought. Also, you will get a bit of peer accountability but also people offering to help each other where they can.

  The benefits of this approach

By Cascading the objectives from the very top every knows that what they are doing contributes to the key company goals. It helps them feel that they are part of the process, that they are helping move the company forward. They understand why they are doing something and that they matter.

If you think about that for a second, it helps them understand that they matter. How many reports have you seen that say productivity is low or that people are disengaged in what they do? They are only present in body not mind. How much money do you spend in recruiting to replace people who were disengaged from your organisation because they felt they did not matter?

If a person believes that they matter to the bigger picture, that what they are doing is worth while just how much more commitment and engagement do you think you would get from them? How much more productive in their work would they be? 5%? 10% 20%? What advantage would that give you over the competition?

Setting annual objectives well is not just an academic or big corporate thing, it's a critical business strategy that every business needs to adopt if they want to improve and engage their employees.

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Wednesday, 04 August 2021

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