Back To CourseSetting Goals as a Team
2 chapters | 9 lessons
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Ian is a real estate investor, MBA, former health professions educator, and Air Force veteran.
As a business grows there comes a point when work gets split up into teams. Successful companies set clear goals that guide their activities. Effective teams must also set goals to ensure productivity and to support goals that are higher up the chain. These goals complement each other toward accomplishing the stated mission and goals of the company. Team goals must show what success looks like for the team in meeting the company's goal. How can business leaders ensure that company and team goals stay in sync? That's what we'll be looking at in the lesson ahead.
Before we can figure out if team and company goals align, we need to understand what makes a good goal. Vague, incomplete goals do not give leaders and team members a clear picture of success. A goal should contain enough information so that it's clear and actionable.
S.M.A.R.T. is a checklist for measuring the quality of a goal:
A goal must be specific. Consider the following goal: The production team will make 10 units each 8-hour shift.
Saying we will make our product isn't enough. What about ten units of a particular product? That is specific. Is it measurable? Yes, we can count ten units and figure out if we have made more or less. Achievable? Absolutely if we have the equipment, resources, and training to make that happen. Do we have the equipment, resources, and training to make that happen? If yes, is it realistic? Also, can ten products be made in our desired time frame? Which brings us to the question of time; when will the ten products be completed?
With a good definition of goals in mind, let's look at making team and company goals align.
Let's go with an example here to help explain how goal coordination works. Let's say ABC Industries sets a profit goal of $1,000,000 for the year. The CEO directed each team to set goals that further this mission. The CEO at ABC Industries doesn't like to micromanage and wants to give the teams as much autonomy as possible to meet the company goal. The production team at ABC works 8-hour shifts, totaling 250 shifts per year. Let's assume for this example that they're creating a product called Unit X, and that Unit X is the sole product of this company and sole source of income.
So, how can the production team set a goal? The team feels it would be pretty cool if they could build seven units a day. They think they can make that happen if they work hard. If their S.M.A.R.T. goal is seven units per shift, at first they've met the basic definition. However, let's look more closely. Based on 250 shifts per year, the team will make 1,750 units in that year. Each unit makes a $500 profit, so the company will only make $875,000, a bit shy from the company's goal of $1,000,000.
So, it's back to the drawing board for our team. What can they do to align the team goal with the company goal? Simple math shows that if they could make 2000 units per year they would meet the $1,000,000 profit goal. They would have to produce eight units a day instead of seven units a day to make that happen.
First the business team leader will have to consider if that goal is achievable and realistic within the time frame. It's great if it is, because that decision can be made at the lowest level, and the company management's expectations will have been met. The team leader can consult with the team members and see if they can make any simple changes to consistently reach or exceed an 8-unit goal. As long as the team members and their skills are allocated correctly, this shouldn't be a problem, right?
What if the goal isn't appropriate for the team? Then it's time for team and company management to get together and figure out a solution. Drawing on the expertise of team members can help convince management of the necessity for additional support. Team members are also some of the best prospects for identifying solutions. Perhaps the company's goal was too optimistic. In consultation with the production team, the top management might refine the company's goal to accommodate limitations.
Business leaders at the team and company level need to work together to ensure that their goals align. S.M.A.R.T., which is a checklist for measuring the quality of a goal, can help decision makers quickly verify that a goal is thorough enough to be actionable. It addresses five concerns:
For a goal to be S.M.A.R.T., it needs to address all five of these things. Just saying you want to do something isn't enough. The company sets a goal in accordance with its mission, and the team creates goals that help produce mission results. If there is a block and the goals don't align, team members and leadership need to revise the goals or institute changes to make the goals align. Together team goals push the bigger whole of the company goals, achieving the company's mission statement. In other words, team goals must support company goals. Larger organizations may make use of divisions as intermediate management layers.
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Back To CourseSetting Goals as a Team
2 chapters | 9 lessons