In this article, we will discuss How to Set Challenging and Achievable Business Goals. In order to engage and motivate employees, they need to understand their job description, the performance expectations the company has of them, and the consequences of over or underachievement. The goals a company want their employees to achieve have to sit within the context of the market, in which the company operates. Comparing a company to it’s industry places these goal expectations in context.
These comparisons provide critical context for your business goals by establishing what’s normal in a given industry or market. Knowing what’s possible, or not, allows expected performance to be normalized.
What is Normalization?
This concept of normalization is defined as the process of comparing one company’s business processes and performance measures to the total industry performance and practices. It’s the direct comparison between company A and their competitors. The dimensions will differ by industry.
Understanding these normalization frameworks, helps determine what metrics a company must hit to succeed in your market. Once you know the company objectives you can set the the team and then individual targets.
Why is Normalization Important?
Normalizations are like leaderboards. They show how you rank against other companies in a competitive environment. They let you see and understand clearly if you are in the right range compared to your competitors. They confirm if the KPI’s set for individuals and teams are achievable. Are the call rates, conversion rates, and close rates in the same range as your competitors. Of course the better measure is how to be better than the average. How far do you stretch the expected metrics so they are challenging and still achievable. It gives a baseline expectation.
Normalization also helps the company understand what the average looks like for your business model and industry. The baseline changes as companies innovate and political and socio-economic factors play out external to the organization. ‘Normal’ changes and individual companies will change positions dependent on their ability and willingness to strive harder to achieve their goal. In order to stay relevant, you need to run normalization processes on a regular basis.
How to Set Challenging and Achievable Goals
The key to a successful business is understanding the metrics that determine the success or failure of the business. This provides the basis for the setting of employee Key Performance Indicators. The metrics need to be specific to each department in the company. Sales will have different KPI’s to the customer service team, the marketing team or the accounting department. If you need help there are a number of places to get assistance. Google has all the answers on suggested KPI’s and goals that might suit the individuals and teams across the organization.
Then comes the time to communicate targets to all employees. This sets the expectations clearly for everyone. The potential achievement of the KPI’s by employees is directly proportional to how well you communicate these to staff. It’s critical to maintain transparency so everyone knows what they’re working towards and how they’re progressing. If people know and understand their own, their team and the company goals, they’ll strive to achieve them.
The next step is to ensure the performance of staff and their progress against their KPI targets. One of the best ways to do this is to use leaderboards that can be displayed on a browser, mobile devices and of course the office TV. Visibility of performance motivates people to adjust their behaviors around activities, to do more. It also speaks to the transparency of company culture.
Got the Goals Now You need the Leaderboard
Signup for a free trial with Spinify. Display your KPIs and objectives on a browser or an office TV. Leaderboards provide you with immediate performance feedback on employees on their progress against their goals. Easy to setup and run.