Owning Outcomes: How Leaders Can Instill Better Performance Metrics

Nov 24, 2022 Organizational goals and metrics from ProCFO Partners

Setting goals is essential for any organization, but getting everyone on the same page can take time and effort. This article will discuss how to set directional goals that will create organizational alignment and focus. We’ll explore the importance of setting measurable objectives, the role of your leadership team in the process, and getting your employees’ buy-in while also creating accountability to measurable targets.

Understanding Directional Goals

‍When managing any team or organization, the different goals and objectives will always vary depending on the group’s needs. However, one commonality that all teams aim for is having a set of clear, measurable, and directional goals in place. These goals— often referred to as outcome-driven goals — allow teams and organizations to operate with a target focus. Without these types of measurable goals, organizational alignment becomes difficult and team members have difficulty knowing how to align their efforts with what’s best for the entire organization. When managed correctly, measurable, outcome-driven strategic goals can also help cut down on unachievable objectives or lofty aspirations without measurable targets.

What does Organizational Alignment Mean?

Organizational alignment is the process that brings everyone in an organization or team on the same page — and in the same direction — regarding goals and objectives. Alignment means focusing on the same set of goals and having each team member understand how their job contributes to achieving those goals. It’s important to note that organizational alignment doesn’t just mean that everyone in a company is working on the same projects or towards the same goals. Instead, it means that everyone uses the same metrics for measuring success and understands how their efforts contribute to the organization’s big-picture objectives. Establishing goals early on is essential to avoid situations where people assume they’re doing the right thing but then find out after the fact they didn’t do it in ways that are most aligned with organizational goals.

Why Is Organizational Alignment Important?

An organization without an organizational alignment is, at best, inefficient and, at worst, a hot mess. Team members must understand how to apply their skills or efforts towards the organization’s goals to impact productivity positively. Team members who don’t have clear objectives or metrics to gauge their success can easily fall into the trap of doing busy work or work that doesn’t contribute to the organization’s goals. Organizational alignment also can bring a great deal of positive change to an organization. Aligned team members can change the game by streamlining operations, increasing productivity, and impacting the bottom line. If an organization is doing well but could do even better, then alignment may be the key to taking it to the next level.

How to Achieve and Maintain Organizational Alignment?

When clear and measurable goals and objectives are in place, organizational alignment can only be brought about. For instance, if the business owner or leadership team wants to grow the business from $5 million in revenue to $10 million within a year (a measurable target that contributes to a directional goal), then that objective needs to be clear both to him and to the rest of the organization so that everyone knows what success looks like. That same objective should be applied to every organizational department and communicated throughout the team so everyone knows what success looks like. That way, everyone knows what success looks like and has a measurable target to align their efforts. 

In the financial world, metrics often concern income, revenue, profits and loss, etc. When you start getting into areas like engineering and operations, metrics might include utilization. If you can’t get 100% utilization, for instance, set a goal of 80% and track the hours put towards production. There are always ways to establish some measurability, even from a quality control standpoint, such as a last-time recordable accident rate or an engineering error rate.

The executive team, for instance, may want to meet with the management team or employees to discuss what success looks like and how each team member contributes towards it. Once this meeting occurs, leaders should follow up with frequent check-ins to ensure everyone is on course. If something comes up, the team can immediately address the issue and make any necessary adjustments.

Benefits of Outcome-driven Strategic Goals

Outcome-driven strategic goals, when executed correctly, can bring tremendous benefits to an organization. Some of the most common benefits include:

  • Improved organizational efficiency
  • Increased productivity
  • Increased revenue
  • Reduced employee turnover
  • Stronger leadership execution
  • A competitive edge
  • More robust and sustainable operations

Scorecards and Flash-Metrics

One way to stay aligned on measurable objectives is with regular touchpoints. Every week, with your leadership team, create flash reports that explain where you’re going concerning your goals and get everybody engaged. This helps you solve problems together as a team. You’ll be amazed at how much intelligence is sitting there. Utilize all the knowledge that you can.

A weekly scorecard will help you understand organizational performance against key performance indicators. You need to know exactly where you are on a trending basis, so it’s essential to look at weekly rather than quarterly or monthly goals.

Conclusion

When managed correctly, directional and outcome-driven goals can benefit an organization. Successful organizations typically have successful teams, and successful goals and objectives naturally guide successful teams. If you’re managing or leading a team and would like to implement a successful set of goals and objectives, we encourage you to keep the benefits of outcome-driven strategic goals in mind – and give us a call if you’re unsure or want to dig in more. When executed correctly, these goals can bring tremendous benefits to an organization.



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