December 1, 2014: Ubiquitous Goals

I hope your Thanksgiving and the long weekend went well.  It was nice to take a little break from the blog; at the same time (or 4 days later), it's nice to get back to it.

It is nearing the end of the year.  For some companies, it's time for annual reviews.  In honor of one of management's least loved essential functions, the next few days we'll discuss performance reviews.

In most large companies, the Board decides the direction of the company with input from the company's top executives.  Those executives' goals might read: "increase stock price by 3% per quarter" or something similarly overarching.  At the level of the VP, that 3% share price increase goal might mean a 6.5% market share increase for Widget Zebra.  Below the VP, that market share increase goal might mean the manufacturing line has to find a 15% cost reduction so the sales team can decrease price without sacrificing margin.  The 15% cost reduction goal, when taken to the operations level, might mean reduction in overtime.  It might mean lowering product defect levels.

In the perfect world, every goal on your review can be rolled up the line to the people leading your organization.  It's commonly called "goal cascading", because as the goal descends each layer of management, it is spread out a bit to show a level of detail that is actionable at that level.

We don't live in a perfect world.

The vast majority of management professionals are 1st line managers: the people who supervise the people who are making widgets, writing programs, giving medical care, serving coffee, selling cars, etc.  Many of these peoples' goals will be things that simply don't change, no matter what the executives' goals are: employee safety, paperwork accuracy and timeliness, producing a certain amount of work, training, and a few smaller categories.  One could argue that without these ubiquitous goals, the company would not be able to achieve its share price increase.  Over the long term, that may be correct.  In the larger scope, however, these are things that just have to happen for the business to run.

If we consider the business to be a car, these ubiquitous goals are like the fuel pump.  If you want your car to go faster, you change the exhaust.  You add a turbo charger.  You increase engine displacement to increase horsepower.  The fuel pump?  You just leave that there.  It doesn't need to be improved; it just has to work.  without it, nothing else matters.  An organization that cannot achieve success with these quotidian goals is unlikely to achieve a more specific (increase share price 3%) goal.

How much of your review (and those of your team) should be based on these fundamental goals?  Views vary widely on this, and there is not a single correct answer.  Let's look at a couple of them.

Safety is #1 at your company, right?  So safety should be the most heavily weighted goal.  No?   Not where you work?  I have been lucky to be exposed to an extremely safe work environment for a very long time.  Safety goals ranged from 5-15% in weight, with the expectation that everyone would work safely and that an avoidable incident would weigh negatively but a perfectly clean safety record for the period would result in a "met target" rating.  Similar for admin.  Timesheets, regular reports, work logs, request for quotes, invoicing, all of these could fall in a single category.  In my industry, these kinds of ubiquitous goals usually roll up to about 20%.

The other 80% will be composed of larger, customer-visible goals, internal team goals, and employee development goals.  We'll discuss each of these as we consider goal setting.

How much is the appropriate weight for these ubiquitous goals in your team?  It may be different if you are managing a call center vs a graphic design department vs a restaurant vs a warehouse vs an elementary school.  Take a few minutes to write them out - all the things that a customer won't see or notice, and that won't get anybody a company award, but has to be done anyway, just as a matter of course.  Also take a moment to think on what you are managing with these ubiquitous goals: you are managing the company owners' resources.  How much of that focus should enter into this calculation?