Almost a half a century ago, every major corporation was driven by goals. No suprise there, right? Back then, it was known as “management by objectives.” For many reasons, many managers have drifted away from this practice. If you ever feel more like a baby sitter than a manager, you should go to the personnel files and examine the goals that you have set forth for the troops.
What — no personnel files? Worse yet — no goals? In the current hectic business climate many managers neglect to drive their businesses by assigning and monitoring specific objectives to their direct reports. Here it is in a nutshell: Without proper goal setting, your business will wander around aimlessly. You shouldn’t be surprised when employees tell you they didn’t know what was expected of them.
Everything begins by understanding how to write, implement, and monitor the goals of both the organization in general, and the personnel in particular. There are two major goal categories: quantitative and supplemental. I view quantitative goals as the business/employee’s destination, while supplemental goals are the road maps to take you there.
Always begin by setting quantitative goals.
• For a sales person, a quantitative goal could be to sell $250,000 in projects with an aggregate gross margin of 38% or more by 12/31/2013
• A quantitative goal for a technician could be to reduce unassigned labor by 10% through 12/31/2013
• For a service manager, the quantitative goal could be to reduce service agreement cancellations to 7% or below through 12/31/2013.
It should be obvious that the sales personnel are the most measurable of all employees; however, most positions can and should be assigned quantitative goals.
Once quantative goals are established, the manager must develop supplemental goals to help the employee reach the quantitative goals as well as provide periodic checkpoints. Using the sales person as an example, the supplemental goals could be:
• Make at least five new contacts each week
• Maintain an active prospect list of 12 or more throughout the year
• Attend customer meetings (like Building Owners and Managers Association) each month beginning on 1/1/13
• Review all open quotes with manager on the first and third Friday of each month
• Successfully complete the on-line building automation systems course by 3/30/13.
The list can and should be longer, but this will give you an idea of what I’m talking about. The last supplemental goal is a developmental-needs goal. I always include at least one of these in the supplementals to provide for career growth after assessing some voids or shortfalls. The main focus should be on the supplemental goals on a regularly scheduled basis. This will alert management to problems early enough to intervene and assist the employee with different courses of action and/or provide whatever coaching is required.
There are some iron clad rules in the development of goals, both quantitative and supplemental. Before finalizing the process, go over each of these points to make sure that the goal is written properly:
A Goal Must Be Feasible — Determine if the employee has direct responsibility of the goal. A salesperson can’t totally control executed gross margin, but can be held accountable for estimated gross margin.
A Goal Must Be Measureable — Too many times managers write into an employee’s goal, Improve your presentation skills. How would you measure this?
A Goal Must Be A Stretch— Once again we will use the sales person. If a veteran salesperson has been exceeding several million dollars in sales for several years, don’t assign $750,000 for the coming year.
A Goal Must Be Attainable — The other side of being a stretch, managers should never assign goals that the employee has little or no chance of reaching. That’s failure by design.
A Goal Must Have A Timeline — Quantitative goals, even though they are usually assigned on an annual basis, should be reviewed quarterly at least. When the employee falls behind the year-to-date numbers, the reviews should begin shortening. If supplemental goals are not given a strict timeline, the manager is inviting procrastination.
Above all, every goal should be aimed at driving the business the direction that management perceives, not just for the coming year but for at least the next three years. Once the goals are in place, the manager(s) can take a firm grip on the tiller and steer toward prosperity.
Earl King is the founder of King Productions International, a commercial HVAC
contracting sales consulting firm based in Texas. He speaks to associations and HVAC trade groups, and consults with commercial contractors across the country, in addition to writing this column for Contracting Business.com. Email Earl with any questions or comments at: [email protected] or call him at 515/321-2426.