Don’t try to be SMART…

The SMART acronym is too confusing. People don’t know whether goals should be SMART or whether performance measures should be SMART. They don’t know what “specific” really means (that’s what the S stands for). They aren’t sure if R stands for realistic or relevant. And if A is for achievable then does that mean you can’t have stretch goals?

To write great goals, asking these four questions is all you need:

Question 1: Does everyone share the same understanding of this goal?

It’s a mistake to try to use as few words as possible to write goal statements. That’s because, for whatever reasons, we use very weasely language and end up with motherhood statements that can’t be measured. In my experience, the vast majority of goals are so vague that 7 different people can easily have 13 different interpretations of the same goal. Not good.

Question 2: Can we easily recognise when the goal is happening, through observation?

You can’t measure something that you can’t observe. If you can’t observe it, then you can’t know when it’s happening or when it isn’t happening. If you have a goal like this, then it can’t really be a goal. What’s the point of aiming for something you can’t see or recognise or discern as different in some way from how things are now?

Question 3: Does this goal matter more than all the things we’re not going to measure?

If you’re going to measure something, then it really ought to be something you should, can and will improve. We don’t have enough time to measure everything; it’s distracting to measure something just because it’s easy to; and it’s wasteful to measure something if we really don’t need to take any action on it. Only measure results you want to improve, or results that might not need to be improved but you need to urgently remedy if they do take a turn in the wrong direction.

Question 4: Is the goal about making a difference in the world, or just about doing stuff?

Most of what we measure is action: how much stuff did we do and how much of it did we do on time? If we keep on measuring activity, our attention will stay focused on doing activity. But what we really want is to make our world (or our little part of it) better in some way. That’s why we do the activity, anyway. So make sure your goals are about the results of your activity, so you can then monitor the degree to which you’re making that difference in the world you set out to make.

TAKE ACTION: Ask these four questions of your own current strategic or operational goals. Do your goals pass muster? Remember: it’s never to late too change a goal that isn’t measure-worthy.

I’d like to share some ideas with you, about how to lessen the burden when you come face to face with worries like these.

Idea #1: Use control charts to indisputably show actual performance compared to target.

You haven’t hit the target just because this month’s performance measure value has hit the target. You don’t have to wait until the end of the year to see if your performance measure has hit the target. Good targets are about ongoing capability, not one-hit wonders. Use a control chart and compare the mean line, which represents the current level of performance, with the target.

Idea #2: Make sure your measure can be monitored at least 6 times within the target timeframe.

Design your measure so you can calculate it as regularly as is feasible, and then set a target timeframe that accommodates frequent enough feedback to increase your chances of staying on track. For example, monitor your measure weekly or monthly for a 1 to 2 year target timeframe. Yes, sometimes you just can’t get data this frequently, but that doesn’t change the fact that a single point of data says nothing. Is it worth setting a target that you cannot honestly know is achieved?

Idea #3: Don’t strike a balance between achievable and stretch – do both.

What I’ve learned is that it takes practice and confidence-building to achieve a target or goal. Why not set at least two or three targets for any single performance measure? The first one is shorter term and not very challenging, for the purpose of building target-accomplishing momentum. The interim target is an opportunity to build more capability and confidence to stretch. The last one is the stretchy target, which you might have no idea of how to reach at this point in time, but be in a better position to know after you’ve achieved the interim target.

Idea #4: Use vivid and specific language to describe the world after the target is accomplished.

Numbers alone are hardly enough to motivate anyone. So handing a team a performance measure + target value + timeframe won’t likely be enough motivation. Have you ever tried telling the story about what the world (or at least your part of it) is like after the target is met? Colour, sound, movement, emotion, expression, behaviour, shape, rhythm and all those other sensory experiences emblazon the meaning of the target into the minds and hearts of those setting out to achieve it. Motivation from within is the best kind.

Idea #5: Keep one eye on the target, and one eye on the bigger picture.

Even if you had enough foresight to explore the unintended consequences of achieving your target before you locked it into your plan, the world will still change later on. I once heard a story about a railway organisation that prioritised on-time running over all other performance outcomes. One day, due to the train running late, the driver omitted an important safety check to save time. The train derailed because of a braking problem that the safety check would have picked up. Every now and then, ask yourself “is this target still a good idea?”.

Idea #6: Give yourself permission to learn by not achieving targets.

If you achieve every target you ever set, then you aren’t challenging yourself enough. You’re staying inside your comfort zone, inside of what you know works, what you know you can accomplish. That’s not what improvement is about. There is no learning without failing, no improvement without learning. If you want to jump over a creek without getting both feet wet, then don’t aim for the far bank of the creek. Aim for a metre or so beyond it. That way, maybe only one foot will get wet. Somehow, our strides are longer when our eyes focus further ahead.

Idea #7: Do some preliminary scoping of “how-to” before locking in the target.

If you and your team do not yet possess the target setting and achieving prowess of an Olympic athlete, then avoid setting any kind of target without first exploring a range of ideas of how you might go about achieving it. A very innovative manager I know used simulation software to model his business processes (freight). He made changes in the model to simulate changes like more equipment, different procedures, changing policies. So before he spent a single dollar, he got a good idea about which strategies would best hit the targets. He saved his company many millions of dollars of investment in new trains that weren’t needed.

TAKE ACTION:
Write down the steps of how you currently set targets. Draw little red stars next to the steps that have problems. Then use the ideas above to write a new target setting process, that could be a vast improvement for you.

IN THIS EPISODE:

Feature: Setting Sensible Targets For Your KPIs.
Q&A: Does every performance measure need a target?
Quick Tip: How to best display a target on your KPI graph.

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IN THIS EPISODE:

Article: 7 KPI New Year’s Resolutions
Q&A: How do you convince busy managers that they should spend time developing the right measures?
Quick Tip: Start with a Pilot Project to build momentum and engagement.

Subscribe at iTunes or listen here:

Download mp3

STEP 1: Know who your customers are

Gather all the relevant information you have to describe the relationship of each customer to your business or organisation, such as how much ‘business’ they give you, where they are located, what industry they are in, what their reasons are for using your services, and so on. The idea is to use this information to define market segments that group similar customers together, and help you organise your list of customers for selection into your survey sample.

For example, one of my clients was a general freight business, whose customers were everyday people who wanted to freight anything from furniture to clothes lines, from the coast to the outback.

STEP 2: Find out your customers’ needs

It’s your customers who define what ‘quality service’ means (not you!) and therefore you need to know your cusomters’ definitions of ‘quality service’ before you decide what you should be measuring in your customer survey. This means conducting a bit of qualitative research, like using focus groups, to ask your customers how they define their needs. Prioritise the top 8 to 12 of these customer-defined ‘service attributes’ as the starting point to creating your customer survey.

My freight business client’s customers cared about the care and handling of their freight, about getting quick access to their deliveries, and about the accuracy of the invoices sent to them.

STEP 3: Measure your customer service performance

Create a quantitative survey based around the 8 to 12 customer-defined service attributes from Step 2, so you can measure satisfaction levels with each one of them, along with their relative importance too. Don’t forget to include a question on the overall level of satisfaction customers have with your services. DO NOT assume you can calculate this by averaging the satisfaction with each of the service attributes.

Traditionally the freight business managers designed the questions in the customer survey: they added anything that seemed interesting to know. Surveys are impositions at the best of times, so we need to keep them short and sweet. Useful, not just interesting. So the new survey only asked questions about what customers said was relevant to them.

STEP 4: Focus on the customers’ priorities

Examining the average satisfaction ratings and average importance ratings for each of the service attributes will help you identify the priorities you need to act on. Don’t try and fix everything (aren’t you already complaining about how much you have to get through already?). Just focus on the service attributes that have the highest importance but the lowest satisfaction.

While the freight business managers believe that running on-time to their schedules was the highest priority, their customers didn’t agree. Their customers were most frustrated when they were asked to pay on invoices that were confusing and incorrect.

STEP 5: Fix your processes

Which of your business processes impacts most of the priority service attributes that need improvement? You’ll only get improvement if you fix those business processes (or at least improve them). You may even find it useful now to establish some internal measures (that is, not based on customer data) to track the processes’ impacts on those priority service attributes.

Clearly for the freight business, their invoicing process was a problem, producing inaccurate invoices as it was. They set up a new internal measure for % Invoices Unpaid Due to Errors and went about tackling the problems in the invoicing process that caused the inaccuracies.

Simple, but focused on priorities and clear action. That’s what all good customer surveys should be.

TAKE ACTION:
Do you have a customer survey now? How well does it reflect customer-defined priorities? How well is the data used to improve customer satisfaction? What can you do to make that customer survey simpler, more relevant and more actionable?

And if that’s not bad enough, they use terminology in a confusing way, like when the term “KPI” is used to mean something more like a goal or objective, rather than a true performance measure. Or they ignore the entire concept of measures or measurability.

So how can you create a strategic plan that is results-oriented, that spends far more time on your person than it does on your shelf, and that means as much to you as navigational charts are to a ship’s captain, or maps are to a rally car driver’s navigator?

It doesn’t have to be complex, glossy or an inch thick. All the better, it can be a single page. And on that page, over and above the standard vision-mission-values stuff, there are 5 essential elements for a results-oriented and dust-repellent strategy:

Column 1: Key Result Areas

Key Result Areas give some structure or ‘chunking’ to your strategic plan, as well as a framework for completeness or balance. You could use the Balanced Scorecard perspectives, the Triple Bottom Line, or any other strategic model that takes your fancy. Irrespective, aim to have only 3 to 5 areas of focus because if you make it more complex, there are just more places for dust to gather.

Column 2: Results

Results aren’t goals or objectives. They are clear statements of the outcomes or differences that are most important to make happen, in each Key Result Area. Make them vivid, so reading the words invokes clear images of what it looks like when they’re happening. Be ruthless, so you are only ever focused on what matters most of all, and only ever have a manageable number of priorities to achieve.

Column 3: Measures or KPIs

I mean measures as in evidence, not measures as in “we are taking measures to fix this”. Measures are usually quantitative values that you track regularly through time, that tell you how well you’re achieving your results (in column 2). Each result only needs one or two measures, typically.

Column 4: Targets

Targets are numerical values that describe where you want your measure to be at a particular point in the future. Include for each performance measure a time-anchored target and then you have all the ingredients for a true goal or objective statement: a result (column 2) + a measure (column 3) + a target + a timeframe.

Column 5: Improvement Initiatives

These are the projects, investments and opportunities you’re choosing to make the changes in your business processes which will bring about the results you want (in column 2). To know how well these improvement initiatives are working, you’ll simply look at the measures you chose (in column 3) and see if their actual values are getting closer to the target values (column 4).

Many people confuse the initiatives with measures. They’re not the same thing.

What To Do With Your Strategic Plan on a Page

Carry it around with you. Read it everyday. Refresh it as you achieve your targets and results. Adjust it as you discover which improvement initiatives are working and which aren’t. Add project plans for the improvement initiatives, so you know what to do to achieve your Strategic Plan. Celebrate when you do make exciting progress.

Your Strategic Plan on a Page is your map to success.

TAKE ACTION:
Download my Strategic Plan on a Page Template now, and use it to check your existing strategic or operational plan has the essential elements of dust-repellency, or adapt it as your new strategic or operational plan template.

Usually stretch targets scare the living daylights out of people. They have no idea how or if it can be achieved and they don’t want the pressure of failing to meet the stretch target. Occassionally stretch targets can be motivating and inspiring, but rarely without careful leadership, a strong improvement culture or a damn good reason!

Many people prefer to talk about chievable targets. They represent a very doable, but small, improvement in performance. An achievable target for your On Time Delivey measure might be 50%. People believe in achievable targets. They usually have a pretty good idea of what it would take to reach them, and don’t have any qualms about giving it a go. It’s inside their comfort zone.

So which type of target should you have? Or can you have your cake and eat it too?

Clearly, the size of your target depends on the size of your organisation’s belief in their ability to improve things, to make change happen, to decide on what to fix and execute that decision. But you don’t have to have just one target.

For any performance measure, you can lay out a path into the future using a series of targets paving the way to the level of success you want. For our On Time Delivery example, it might work like this:

current level: 45%
6 month target: 50%
12 month target: 60%
18 month target: 80%
24 month target: 95%

The target series follows the trajectory from now to the ultimate place you want performance to be, by starting out small and building momentum that will make each successive target easier to achieve.

You’ve heard that quote from Sir Isaac Newton, “If I have seen farther than others it is because I have stood on the shoulders of giants”, haven’t you? Well the idea with target trajectories is the same. You will see the way to the next target from the vantage point you achieve through reaching the previous target.