Four questions to keep your targets in changing times
How many times have you heard a business goal similar to this: “We will be n°1 in the next 5 years”? Whether you are running a start-up, a department, a much larger organization or a strategic project, setting goals and making sure they are attained is one of your main tasks.
But a goal cannot be resilient on its own, it doesn’t withstand pressure or overcome adversity to preserve its essence without you managing some important variables perfectly well. Here is a four-question framework to maximize your chances of success:
How wise are your indicators? This question has a prerequisite, which is that you have set indicators – the measurements you will use to determine whether you reached your goal – that are memorable, achievable, trackable, and that were agreed upon.
The agreement aspect is especially important because it requires a process of questioning before you finally decide on one particular indicator rather than another. It also involves negotiating the target so it is achievable and therefore motivating.
Indicators act like a lighthouse during the journey. They are crucial in difficult times when the team might lose its way, and thus need to be chosen with considerable care. This is why defining your goal in strictly financial terms is a recipe for disaster.
It can, for example, lead organizations to compromise on ethics. The target metrics, “by when” and “with what budget” always need to be credibly counterbalanced by the “how” in order to have wise indicators. If your take the same example from above: “we will be n°1 in the next 5 years,” but add “both economically and ecologically,” you would have to reach both the environmental and financial aspects to claim success.
How favorable or hostile is the context? Experienced mountaineers have an acute sense of context; it is their life insurance. They don’t take chances. They are capable of turning back a few hundred meters from the summit and starting again later if the weather is too bad, or modifying their route even if it requires much more effort.
The importance of context also applies to business because a hostile environment definitely threatens your chances of success. With this in mind, keeping the stakefactors (factors that influence your ability to reach the goal) in your line of sight allows you to take advantage of any catalysts and at least mitigate the impact of inhibitors.
But this is not the only benefit; having a deep level of understanding of context is also vital in the process of making strategic choices and enforcing priorities.
How pertinent is your strategy? Well, being mindful of the context does not mean forgetting about strategy or continually changing it. But it does mean recognizing that the pertinence of the chosen strategy needs to be challenged more frequently.
So answering this question calls for a frank diagnosis and a good degree of courage: Is my plan still the right one considering the evolution of the context? Is my plan delivering on its promises? Are the overall indicators evolving as anticipated? If implementation is taking place smoothly, for example, but the indicators are not progressing, then the strategy might require a serious revamp.
How ready is your team? Many things can go wrong in trying to accomplish a goal – bad luck, a tough context, fierce or unfair competition, even a financial crisis. The ability to cope with these inevitable challenges will depend on your team’s readiness to do so.
A team with a high degree of readiness will find solutions. Is your team aligned? Is it integrated? Does it have the required knowledge and innovation capability? Does it understand the ecosystem in which it is evolving, and is it self-aware? These elements, explained in more detail here, are fundamental for the team to remain united in turbulent times.
The Volkswagen dieselgate in 2015 is a graphic illustration of testing goal resilience: The discovery of a modification in the engine management software installed in a number of models to circumvent emissions standards quickly created a crisis that was probably the greatest in the history of the carmaker.
A stakefactor (the engine management software) completely changed the context that had previously been quite favorable to the group’s goal of becoming “the world’s leading automaker by 2018 – both economically and ecologically” as stated in its 2014 annual report. However, what led to the problem? Is there just one answer to this question? Only time will tell, but the 2015 report already shows significant adjustments in the way the overall goal is framed and how it is defined through sub-goals (indicators), as well as in the strategy and composition of the top team.
In a way, Volkswagen seems to have acknowledged that the previous goal with its related construct were not resilient.
So, how resilient is your goal? Applying the above framework takes openness and courage on your part. Openness means that you keep questioning your goal and indicators throughout the implementation journey and never take an answer as definitive. Courage means facing reality. If you are open, you can be alert and agile. If you are courageous, you will act with determination and make difficult decisions before it is too late.
This article has been authored by Prof. Marco Mancesti. Prof. Mancesti is Research & Development Director at IMD business school.
[This article has been reproduced with permission from IMD Business School, Switzerland. www.imd.org.]
The views expressed in this article are of the author and not the views of the publisher.