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CEO Best Practice: Goal Setting

Executive Tools

  • Executive Summary
  • Self Assessment Checklist

Expert Practices Articles

  • How and Why Goal Setting Works
  • Setting Achievable Corporate Goals
  • Cascading Goals in the Organization
  • Ensuring Goal Implementation
  • When Goal Setting Goes Wrong
  • Improving Your Life with Personal Goals
  • The Quantum Factor: Beginning With Yourself

Tools & Analysis

  • Organizational Goal Worksheet
  • Personal Goal Worksheet
  • "Master Want List" Worksheet

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How and Why Goal Setting Works

It's official: we can accomplish more and go farther if we dedicate ourselves to written goals, keep the goals on our corporate and personal radar screens and follow through on the steps required to make them happen.

Vistage speaker Angelo Kinicki, who co-authored the textbook "Organizational Behavior," found that 68 out of 70 organizations examined in various studies enjoyed productivity gains as a result of management by objectives. Goal setting is the first step in management by objectives.

"Research on goal setting shows that it's a very powerful technique to improve individual productivity and organizational effectiveness," says Kinicki.

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Setting Achievable Corporate Goals

Before you can begin goal setting, it's essential to create a blueprint for how the process will unfold, advises Breier.

He recommends five points in the company plan:

  1. Mission statement
  2. Vision statement
  3. Fiscal year priorities
  4. Strategies
  5. Monthly monitoring and managing meetings.

Beginning with a mission statement, each step flows into the next -- and goal setting begins after the mission and vision statements are finished. The process needs to be simple. "The more complex it is, the less people are enjoying it,'' Breier says.

To be effective, goals should follow the "SMART" format. That means they should meet these criteria:

  • Specific
  • Measurable
  • Achievable
  • Results oriented
  • Time sensitive

As goals are set within the organization, finding the right amount of "stretch" -- for growth -- is crucial.

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Cascading Goals in the Organization

Kinicki coined the term "cascading goals" to describe the process of adopting goals at different levels in a company. Like water over a cliff, goals must spill over and "cascade'' throughout an organization to be implemented.

"Cascading creates horizontal alignment in a company," says Kinicki. All the executives at the same level need to gain agreement about what they will do to support the CEO's vision and minimize conflict.

A dramatic example: Over two years, a technology division of American Express was able to cascade goals from a senior vice president to the 800 people in that area. The end result: the costs of developing a software system were cut in half over a two-year period.

How Cascading Works -- Once the vision and main categorical goals are set at the CEO and managerial level, select a person who will champion the process of cascading goals. He or she works to ensure that each department will create goals and action plans that support the goals of the company's leadership.

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Ensuring Goal Implementation

Action Plans -- When everyone returns to their jobs after goal setting exercises, enthusiasm for the goals can be buried by the demands of day-to-day business. The first step is to develop action plans based on the goals -- complete with incentives and consequences for non-performance.

Accountability -- Discussing consequences is critical in any goals-to-action plan.

Often, the consequences are determined as the team works on the goals in the earliest planning stages. Houcek encourages the team to arrive at the "three strikes and you're off the team" approach.

In Houcek's experience, peer pressure creates such an intense expectation of performance that it causes action. "The perceived humiliation of removal from the team is so great that most people act,'' he says.

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When Goal Setting Goes Wrong

How often have you set goals that are then set aside? Examine roadblocks if you have a pattern of abandoning organizational or corporate goals.

Commit Goals to Paper -- This may seem obvious. But Houcek is surprised at how often goals are stated but not written down. Let your TEC or KEY group or chair hold you accountable to writing down your goals.

Ten Organizational Roadblocks

Personal Obstacles in Goal Setting -- When we fail to meet personal goals, many factors may be at play. Houcek, in his studies of high achievers and his experiences with thousands of executives, finds the following common denominators: CEOs with no passion for the goals they have set; the goals are not precise; the personal goal is at cross-purposes with the CEO's self-image.

Fearing Failure, Commitment -- Fears can play a role in our failure to make -- or realize -- goals. "Goal setting is basically making a commitment," says Breier. "Fear of commitment is prevalent in the world. If I don't set a goal, then I'm not accountable for it. That's a subconscious tactic for avoiding goal setting."

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Improving Your Life with Personal Goals

Houcek leads a life filled with passion. He believes it's because he has mastered the art of goal setting and realizing those goals.

"It makes for a very fulfilling life. I spend virtually 100 percent of my time in four areas.'' They are: his family, personal health and fitness; his business and playing baseball in a traveling men's league.

Houcek finds that many executives don't spend time with their spouse, and don't do the things that create intimacy in a family. But he believes we can "soar with the eagles" by acting on our passions -- if we are honest with ourselves about what those passions are.

Start with "Master Want List" -- If living that kind of life sounds appealing, Houcek says it all begins with a little list called the "Master Want List.''

Questions to prompt you: What do you want to do with your life? Who do you want to meet? What new activities do you want to try? What experiences do you want to have again? Where do you want to go? What do you want to learn? What do you want to improve? Who do you want to spend more time with?

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The Quantum Factor: Beginning With Yourself

To Hill, if you want to have a better business, become a better person. If you want to create new markets, become a better person. If you aspire to greater spheres of influence, become a better person.

Hill contends we can make quantum leaps by creating quantum goals.

The G-Curve -- As Hill began studying people who have made dramatic improvements in their lives, he noticed that they seemed to do so at 18-month intervals. He calls this year and a half period the Growth Curve, or G-Curve. As a result: If you can stay disciplined and focused on your goals for 18 months, Hill says, you can experience major breakthroughs in your life.

Creating Quantum Goals -- A quantum goal is reachable, achievable, but beyond your current expectations. "Quantum goals aren't unrealistic -- like I want to be President of the United States in 18 months -- but they do involve taking risks," Hill says.

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