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Waymaker Podcast: How to set goals that work S1:E7

by | Jun 2, 2021

Season 1: Episode 7

Big idea: How to set goals that work, and know when they don’t.

Goals and goal setting is the most powerful alignment tool in the leader’s kit bag.

Transcript

How to set goals that work and know when they don’t. 

00:02
welcome to leadership talk
00:04
the official waymaker podcast where we
00:07
explore
00:08
how your organization can achieve more
00:11
by doing less
00:22
well welcome to leadership talk the
00:24
official waymaker podcast i’m your host
00:26
craig hineman
00:27
as always i’m joined by ceo and founder
00:30
stuart leo how are you stu i’m great
00:31
craig how are you buddy
00:34
yeah doing very good i actually went out
00:35
for a hike with my wife this morning
00:37
just exploring the uh the mountains
00:39
exploring the um the mountains
00:41
fantastic it’s good feeling refreshed
00:45
that’s great you’ve had a hectic you’ve
00:46
had a hectic you know morning
00:48
just you know starting up a new business
00:51
startups are startups
00:52
um every day is a new mountain
00:56
and uh and we enjoy the climb
00:59
good good um metaphor and let me segue
01:02
uh i hope you’ve got some good goals
01:05
awesome thank you for asking
01:09
yeah we’re talking we just we yeah we
01:11
wanted to talk a little bit about goal
01:12
setting
01:13
yes right yeah uh in this episode um
01:16
how to set goals at work and when to
01:18
know when that they don’t work
01:19
so you want to give us a little bit of
01:20
an idea stew of what we what we’re going
01:22
to unpack today
01:23
well yeah i mean um goals
01:26
uh the the way or
01:30
really they’re the secret weapon in any
01:31
organization for
01:33
uh powerful alignment um it’s how you
01:36
get a grip on the organization the team
01:38
that you’re running
01:40
but it actually is also one of the most
01:43
challenging areas
01:44
of any business i think the
01:49
the danger is we set the wrong goals
01:52
or we set bad goals
01:56
so part of the
01:59
the battle is lost even before we’ve
02:01
even started simply from
02:03
poor goals why do we even have to set
02:06
goals what’s that
02:09
said the creative
02:12
exactly it may shift halfway through the
02:15
project and that’s fine
02:16
because that’s the creative process um
02:20
no why goals oh my gosh all the
02:22
accountants listening just
02:23
just they just something just broke in
02:25
their universe what did he just say
02:28
what you mean you can change um well
02:31
i mean i i love this quote from a guy
02:33
called bill copeland that um the trouble
02:35
with not having a goal is that you can
02:37
spend your life running up and down the
02:38
field
02:39
and never score you know you never know
02:42
if you’re winning or losing and a lot of
02:45
people think about goal setting around
02:47
oh it’s motivational and rah-rah and
02:50
it’s about conquering and building
02:52
dreams and
02:53
well sure goals have a role in that but
02:54
actually
02:56
um goals are far more practical and far
02:59
more
03:01
relevant to your day-to-day than really
03:03
what we all give a focus and
03:05
i love the idea the analogy that the
03:08
goals
03:10
they put a door to ideas
03:13
so we have these ideas if i do this will
03:17
it work or can i achieve that
03:19
or um and and the goals
03:23
focus um an idea to an end
03:27
game that’s the open door so ah there’s
03:30
an open door over there and we begin to
03:32
focus everything towards that open door
03:34
yeah
03:35
and either the goal shuts the door
03:38
going actually yeah we were pursuing the
03:41
wrong thing
03:42
or the goal shuts the door by going tick
03:44
well done everything
03:46
got through the door and we’ve closed it
03:47
behind us
03:49
and or the goal shuts the door
03:52
and actually opens us up into a new
03:55
place a new space
03:57
full of new opportunities ready for new
03:59
goals
04:00
and and if we think about that idea
04:03
as goals put a door to ideas
04:07
when we achieve that next level that
04:09
next layer that next goal
04:12
what’s open to us to achieve next is
04:14
completely different
04:16
from what was open to us to achieve
04:18
beforehand
04:19
so yeah yeah so goals when we think like
04:22
that they’re like energy
04:24
energy um spread out
04:29
is weak um so
04:32
if energy is contained into a tight
04:35
space
04:36
it’s extremely powerful and so goals
04:40
take the energy of action and compress
04:42
and compress and compress
04:44
until they’re like an atom um you know
04:47
they can be nuclear so goals are gears
04:50
i think i’ve said this for years hey
04:52
that rhymes doesn’t it
04:55
there um go um goals are the gears
04:58
in talk you know this this is leadership
05:00
talk how do we achieve more whilst doing
05:03
less
05:04
well do less and make sure that what
05:05
you’re doing is really valuable
05:07
and you’ll achieve more whilst doing
05:08
less it’s that simple so
05:11
last episode we talked about alignment
05:13
is it possible to have alignment without
05:15
goals
05:16
well um i don’t think so
05:21
um i i think you i was hoping for a more
05:24
profound
05:25
response no no
05:30
um that was a goal girls are a key part
05:32
of alignment yes well
05:34
i think sometimes we can think of
05:36
moments in teams where we’ve had great
05:38
alignment
05:39
and maybe we haven’t had super clear
05:41
goals written down but we’ve actually
05:42
known
05:43
what the end game is and so we’re all
05:45
just working towards that
05:47
so right um so i think yeah the more
05:50
aligned and the more in tune you are
05:51
with
05:52
the team around you the less you need to
05:54
explicitly state what needs to be done
05:57
because you all know i mean take a
05:59
football team
06:01
you’ll know you’ve got to get that ball
06:03
through those sticks
06:04
and i’m going to do whatever it takes to
06:06
do that
06:08
but goals are so much
06:11
more effectively achieved if we play as
06:14
a team
06:15
not as a as a bunch of people just doing
06:18
whatever it takes
06:20
so so goals almost
06:23
force teamwork teamwork drives
06:27
alignment and goals when organized
06:30
together
06:30
help us think about not just you know
06:32
our team goal but potentially
06:35
the business goal the the the bigger
06:37
goals at play
06:38
so yeah goals is it possible to have
06:41
alignment without goals i don’t think so
06:44
what do you think craig no i think i
06:47
agree with you on that one
06:49
i don’t think you can prove your thesis
06:50
please prove your thesis
06:53
so we have in in business we often have
06:56
like metrics that we’re
06:57
sort of observing and sort of trying to
06:59
hit in different areas um
07:02
and so you’re talking about goals is
07:04
there a difference and if so what’s the
07:06
difference
07:07
between goals and metrics between goals
07:09
and metrics
07:10
yeah yeah i mean i actually think this
07:12
is the first stumbling block
07:13
we’re not being coaching leaders
07:16
this is often a question that comes up
07:18
um
07:19
uh hang on what’s what’s a goal versus
07:22
what’s a metric and i know that sounds
07:23
really
07:24
simple i don’t wanna say dumb it’s not a
07:26
dumb question at all
07:28
but it actually you’ve got to think
07:29
through this stuff and lay down some
07:31
foundations
07:32
and a goal is not a metric but a good
07:34
goal should include a metric
07:37
so yeah goal is not a metric but a good
07:39
goal should include a metric
07:41
our goal is to win the game and if we
07:44
win the game
07:45
we should achieve 50 points
07:49
or score five goals because that means
07:51
we’re going to score more than the other
07:52
team and therefore we’ll win can you see
07:54
the relationship
07:56
a measure is a a metric is a measure of
07:59
something
08:00
a goal is a desired change or outcome
08:03
of that measurement and so what often
08:06
happens
08:07
um trip up number one you want to say
08:09
that again a goal is a desired change or
08:11
outcome of that measurement
08:12
yeah well you just said it which is
08:14
great so yeah yeah
08:16
so for a third time but like so a
08:18
because a goal is a desired change or
08:20
outcome
08:21
is is it so like actually set the goal
08:24
first
08:24
yeah that’s the goal first and then
08:26
metric is our measure to
08:27
see whether or not we’re heading towards
08:29
that or not correct yeah so a metric is
08:31
a measure of something
08:32
our goal is a desired change or outcome
08:36
of that measurement so really simply um
08:40
a goal sorry metric might be monthly
08:43
recurring revenue
08:44
if you’re in the sas business or
08:47
subscription business
08:48
um so monthly recurring revenue is a
08:51
metric
08:52
that’s the metric now what it is is just
08:55
whatever that metric is let’s say it’s a
08:57
thousand dollars a month
08:59
the goal might be it to increase
09:03
monthly recurring revenue by 10
09:06
every month now we have a goal
09:09
that is um clear
09:13
and it’s accountable and it’s against
09:16
oh it’s got a metric included so
09:18
remember a goal is not a metric but a
09:20
good goal
09:20
should relate a metric and and so that’s
09:24
this
09:24
this relationship between goals and
09:26
metrics that leadership teams
09:29
often fall in love with metrics um
09:32
forgetting about the role and
09:34
relationship of good goal setting
09:37
in shifting the needle on those metrics
09:40
and good goals mean that when we shift
09:44
needles on one or two or three metrics
09:47
we’re actually
09:48
shifting the needle on many metrics and
09:51
that’s how we achieve more by doing less
09:54
okay and i just like i’m just going to
09:57
give it a little bit more nitpicky for a
09:58
second
09:59
are you are you encouraging us to
10:03
set goals based on metrics or are we
10:06
setting
10:07
goals uh and then
10:10
um having metrics to measure whether or
10:12
not we’re so
10:13
the difference between you say okay
10:15
we’ll increase ar
10:17
by 10 is a goal around a metric
10:20
or another goal might be we want to be
10:22
the world’s most
10:23
valuable um you know or the most
10:27
uh profitable computer company or we
10:30
want to
10:30
show short computer in every home right
10:32
yeah as bill gates said
10:34
um yeah what’s the difference well um
10:39
two parts and answers on that and by the
10:40
way shout out to um
10:42
one of the uh waymaker team members who
10:45
just dropped my takeaway coffee
10:47
uh on the sound desk um i should be
10:49
expecting mine any second
10:50
any moment anymore remember you get you
10:53
get shiraz in
10:54
adelaide that’s true um so
10:58
i mean it really depends on the kind of
10:59
goal we’re setting um
11:01
uh we might have a metric already in
11:02
play so we’re getting revenue per month
11:05
therefore we want to increase it so we
11:07
set that goal
11:08
the seven questions um as we
11:11
excuse me yeah as we think about our
11:16
our goals the seven questions is forcing
11:19
us to
11:20
think about um the goals in play and the
11:22
goals we should be having
11:24
and by question seven we’re asking that
11:26
final question of action which one two
11:27
or three are going to shift the needle
11:29
in the next quarter or half which is
11:31
prioritizing
11:33
and so we we may have a a metric in play
11:36
that we need to shift or change
11:38
um great we can set a goal around that
11:40
or we may have a goal
11:42
that we want to achieve and we haven’t
11:44
yet worked out
11:45
what the metrics might be that help us
11:47
measure it
11:48
and sure sure and so and there may not
11:50
be specific metrics
11:53
or one metric there might be a couple of
11:55
metrics that help us get there
11:57
for example how does bill gates
12:00
ever measure a pc in every house
12:04
well you could you can’t go and survey
12:06
every house but you can conduct some
12:08
research to go
12:10
okay personal computing is now
12:11
ubiquitous it’s reached mass penetration
12:13
we’ve achieved
12:15
that goal and and that’s a vision that’s
12:18
actually structured in a way
12:20
that has a clear goal attached which is
12:23
a vision
12:24
i love um it’s a vision that is
12:27
speaks to the heart of what waymaker is
12:29
where we
12:30
where and we’re gonna we should um
12:32
actually unpack some of this in coming
12:34
episodes
12:35
and attack each question but question
12:38
one is what is our vision is it driven
12:39
by our purpose
12:41
and what’s holding us back from reaching
12:42
them well what was bill gates’s vision
12:45
his vision was to put a personal
12:47
computer in every home in the world
12:49
i might have been in america at the time
12:51
but let’s say the world
12:53
what’s the purpose of microsoft to
12:56
create
12:57
software for micro computing microsoft
13:01
so they were in the business of creating
13:04
software
13:05
for what at that time was known as
13:07
microcomputing
13:08
which was effectively personal computing
13:10
because it wasn’t big ibm machines
13:12
powering space shuttles it was
13:15
it was this new invention in the early
13:16
1980s of computers in the home
13:19
which sounds so foreign to most of our
13:20
listeners
13:22
but i do remember going to school and
13:24
playing on the little old micro b and
13:26
apple 2e
13:28
and it was all about micro computing and
13:30
that was microsoft back at the smarties
13:32
once for being the first person to
13:33
figure out how to use a mouse on a
13:35
macintosh computer
13:36
oh congratulations that’s great too
13:39
you should have got an ipad for that um
13:42
so
13:42
we’re totally off track right now we’re
13:44
off track
13:46
but so um so a good vision
13:50
actually has in a um
13:53
a clarity of purpose and if you have a
13:56
clarity of purpose
13:57
you’re solving a problem and if solving
13:59
a problem
14:00
then there’s a really neat goal that
14:02
drops out at the bottom of that
14:04
really bad visions are things like i
14:06
want to see
14:07
computers everywhere that’s terrible
14:10
vision
14:11
what do you mean hanging off light posts
14:13
on ceilings no
14:14
and what you mean is i want to see a
14:16
computer in the home of every
14:18
um person in the world okay that’s
14:20
unclear
14:21
see the difference um yeah and so when
14:24
when we’re setting goals we’re actually
14:26
either casting big medium size or little
14:29
vision
14:30
we want us the change in the world the
14:33
change in our
14:33
little world that we want is this change
14:36
the change in the world of revenue is
14:38
this
14:38
and and so often organizations talk
14:42
about kpis which are just the set of
14:44
metrics that
14:45
that that are really important key
14:48
performance the key performance metrics
14:50
key performance indicators and they’re
14:53
the things that matter so they’re the
14:54
collection of metrics that matter
14:57
but they’re not tracking the goals
14:59
they’ve set around it they’re just
15:01
tracking the metric
15:02
and so the mood of the organization
15:05
rises and falls on the status of the
15:07
metric and look if you’ve
15:08
if you lived inside a publicly listed
15:10
organization that has a share price
15:13
um you know to avoid the corporate
15:15
corridors when the share price goes down
15:17
and to be around
15:19
i haven’t so you’re speaking from
15:21
experience okay
15:24
because everybody thinks they’re rock
15:26
stars when the share price goes up
15:28
um the next day the share price goes
15:29
down and everybody hates everybody
15:31
well what’s changed nothing’s changed
15:34
the metric has changed
15:36
all because of some emotion in the
15:38
marketplace but the
15:40
goal just should still be working
15:42
towards the same goal and
15:44
so people that run their life on metrics
15:46
um
15:48
tend to be going to get myself into
15:50
trouble here
15:52
tend to be volatile and unpredictable
15:56
people that run their life on goals that
15:58
are measured through metrics
16:01
tend to not get distracted from what’s
16:03
going around them
16:04
and can absorb reactions to what’s going
16:07
around
16:08
around them by filtering that against
16:11
the goal and the metric and the actions
16:13
that have been undertaken
16:14
and and if we as business leaders and
16:17
organizational leaders
16:19
begin to grasp that moment of assessing
16:22
goals and progress towards goals then we
16:25
bring in
16:26
leadership into the discussion around
16:28
metrics
16:30
when it’s hey was why is that metric
16:32
plummeted
16:34
it’s different conversation to we’ve got
16:36
a goal to see this change
16:38
how are you moving towards that what’s
16:40
going on what help do you need
16:42
they’re two different conversations and
16:44
the person receiving that
16:46
and and involved in that that metric or
16:48
that goal conversation
16:50
have a completely different mindset um
16:52
based on that does that make sense
16:54
yeah it does uh so obviously there’d be
16:57
multiple metrics for
16:59
you know the goals that we’ve set as an
17:00
organization are they kind of all the
17:02
same
17:02
is it what’s wrong is it rude to be
17:04
having my coffee on the podcast is that
17:06
inappropriate
17:08
is this the formal case
17:12
that you’re mentioning you go for it you
17:15
have a drink every time i ask you a
17:17
long-time
17:17
question thank you basically stu are all
17:20
metrics equal
17:21
no no
17:24
ask me another question
17:28
no all metrics are not equal um
17:32
so i think we should hit this nail so um
17:35
you know the big idea of this podcast um
17:38
was
17:39
all about how to set goals and know how
17:41
to set goals that work
17:43
and know when they don’t so
17:46
that’s completely different to how to
17:48
track metrics
17:49
tracking metrics is really simple
17:53
have a dashboard with a source of truth
17:56
and let it update automatically
17:58
that’s effectively useless if you don’t
18:00
have a goal wrapped around it
18:02
so so how to set goals that work and
18:04
know when they don’t is all about
18:05
understanding the types of
18:07
metrics that are involved around your
18:10
goals
18:11
and so all metrics are not created equal
18:15
there’s two buckets of metrics or
18:17
indicators
18:19
one bucket let’s call that a lagging
18:21
indicator
18:22
and one bucket let’s call that a leading
18:25
indicator
18:26
and so um a lagging indicator
18:30
as the name suggests um
18:34
they’re often the easiest to report on
18:36
they’re
18:37
they’re most commonly used because
18:39
they’re what’s happened in the past
18:41
so so um a laggy indicator
18:44
revenue total number total number of
18:46
sales correct
18:48
yeah so last month sales this month
18:51
exactly yep it’s happened in the past so
18:54
it’s lagging it’s
18:56
it’s an indicator but not a great
18:59
indicator
19:00
of the future because all it is is an
19:01
indicator of what happened in the past
19:03
um a leading indicator is a measure on
19:07
activities that help drive a performance
19:09
outcome
19:10
so um are these a little less tangible
19:15
no not at all no they’re full-on legit
19:18
hard-nosed like metrics they’re metrics
19:21
so please explain so all right so a good
19:24
leading indicator
19:26
could be something like a response time
19:28
in a customer service environment
19:31
so um the number so it could be hours a
19:35
case or a ticket is open
19:36
at a customer service desk that’s a
19:38
that’s a good leading indicator
19:40
the leading indicator of potential
19:42
service recovery
19:44
or quality of customer service it’s also
19:46
a leading indicator
19:47
of complexity of problems and issues
19:51
that customers are coming back with
19:53
because if suddenly your your time to
19:56
resolve goes from
19:58
say 12 minutes to 24 hours
20:02
then something’s gone wrong and it’s
20:04
requiring too many hands and people and
20:07
feet
20:07
to fix an issue making sense yeah
20:10
another one
20:11
another leading indicator uh
20:14
could be um if if we’re talking say a
20:17
sales team
20:19
um outward bound phone calls
20:23
to qualified leads so that’s a good
20:26
leading indicator
20:28
of a potential performance outcome so
20:31
another good leading indicator could be
20:35
renewals so renewals on monthly
20:39
subscriptions
20:40
if you if or it could be
20:43
monthly or weekly active users actually
20:45
no that’s not a good example
20:47
they’re they’re lagging indicators
20:49
they’re lagging indicators
20:50
yeah yeah yeah so there you go you’ve
20:52
got to think about each one
20:53
what about uh employee satisfaction
20:56
or customer satisfaction would that be
20:58
leading or lagging
21:00
well when did it happen yeah
21:04
so it is happening it’s kind of more
21:06
real time isn’t it yeah
21:08
so the interesting interesting metrics
21:10
though is because
21:11
um customer satisfaction um
21:14
is actually a measure of satisfaction in
21:16
that moment
21:18
so i would say that’s a lagging
21:20
indicator
21:21
yeah but then if we took a a metric like
21:24
net promoter score
21:26
which is a measure of advocacy although
21:29
we
21:30
take that as in the past it’s a measure
21:32
of
21:33
an action in the future so it’s actually
21:36
a leading
21:38
metric a leading performance metric
21:42
and and would give us an indication that
21:44
oh okay look satisfaction was down but
21:46
advocacy’s
21:47
up unusual but hey um
21:50
is it likely that person will buy again
21:52
well actually if advocacy’s up it’s it’s
21:54
likely they will or they’ll refer
21:56
refer offend to so i think that’s a good
21:59
example where we have
22:00
measurements of things in the past but
22:02
what are they are they leading or
22:03
lagging
22:04
and so so there’s two buckets of metrics
22:07
leading or lagging
22:08
and and that’s that’s important because
22:12
you don’t want to set your your
22:15
your goals up on just
22:18
lagging indicators that would be a
22:21
problem
22:21
and you would say that traditionally
22:23
that’s what a lot of organizations do
22:25
set a whole bunch of metrics around
22:26
lagging i think the first mistake that’s
22:28
made is they just said a whole bunch of
22:30
metrics
22:30
yeah in fact probably the first mistake
22:32
is not setting any metrics at all right
22:34
so
22:34
um you know bigger problems than that if
22:38
we don’t have the metrics in play when
22:40
we do set metrics
22:41
um they’re just metrics they actually
22:44
don’t have goals wrapped around them
22:46
so we’re just kind of watching our
22:47
business happen around us we’re not
22:49
actually
22:49
actively driving them and then thirdly
22:54
uh we might have set some goals so now
22:56
we’re trying to affect changing them
22:58
but they’re all lagging indicators and
23:01
we
23:02
we might be feeling like we’re treading
23:04
wheels and so
23:06
we’ve got to think about both the
23:07
lagging and the leading
23:09
and are we driving performance outcomes
23:12
making sense yep totally yeah so you
23:16
would be suggesting that we would want
23:17
to be emphasizing
23:19
leading indicator or leading uh
23:23
yeah it’s more than lagging
23:26
yes yes and in fact research tells us
23:29
that if you emphasize leading
23:32
performance metrics you end up with a
23:35
more
23:36
positive atmosphere and because what
23:39
happens if you emphasize
23:41
number of phone calls or number of um
23:45
let’s say number of phone calls to
23:46
qualified leads
23:48
what you’re emphasizing is proactive
23:51
action
23:52
yep and what often drops out of
23:53
proactive action
23:55
are results greater than what we might
23:57
think we can achieve
23:59
whereas if we set the performance metric
24:02
of five sales per month
24:05
um that’s a lagging indicator
24:08
then the salesperson can often fall into
24:10
a mindset of behavior well i’ve got
24:12
three
24:12
i’ve got those in the first 10 days no
24:15
worries i’m going to get
24:16
but i’m going get two in the next 20. so
24:18
what what happens
24:20
um i stopped making phone calls i
24:22
stopped following up
24:23
and what happens well man suddenly
24:25
getting twos got really hard
24:28
whereas if we turn that on its head and
24:30
go no here’s the proactive
24:33
leading indicator i’m actually not that
24:35
concerned about sales i want
24:37
i am but i’m more concerned about the
24:39
activity that leads to an
24:41
outcome of potential high performance in
24:43
sales
24:44
and if i focus in on that then
24:48
let’s just see where we land um does
24:50
that make sense
24:51
yeah although having said that we’re
24:54
throwing around words like
24:56
leading lagging metrics kpis
25:00
goals etc it can get a bit complex
25:03
it certainly can it’s already coming
25:05
into complex
25:06
complexity that’ll do for me for now i’m
25:09
trying to process it
25:10
stu can you simplify it for us yeah and
25:13
and um
25:14
we so every organization should adopt a
25:18
goal setting methodology
25:20
in order to affect change in the small
25:23
number of metrics
25:24
that measure success i’m going to say
25:27
that again because
25:28
if you do nothing after listening to
25:30
this podcast
25:31
just do this every organization
25:35
should establish a goal setting and
25:37
delivery methodology
25:40
that affects change in the in the
25:43
metrics that measure success
25:45
so we have a way we have a culture a way
25:49
of setting goals that create change in
25:52
the metrics
25:52
that determine how success we do that
25:56
well i’m so glad you asked
26:00
sign up to waymaker because um
26:04
you know we’ve adopted a a goal-setting
26:07
methodology that is world-class
26:10
it’s it’s used um predominantly
26:14
for the last 10-15 years in the
26:15
technology industry and is now
26:17
blossoming out into a broader community
26:19
and
26:19
that’s the methodology of objective and
26:22
key results
26:23
and you know we’ll we’ll cover off
26:26
this more maybe and and because there’s
26:28
loads of content on this but
26:30
objectives and key results um is
26:33
powerful and simple it it’s birthed out
26:36
of
26:38
the management philosophy of management
26:41
by objective
26:42
um which is classic peter drucker
26:46
management theory i mean i must have
26:47
quoted peter drucker on every other
26:49
podcast we’ve
26:49
a lot yep a lot i should stop um no he’s
26:53
he’s
26:53
he’s creative there’s another guy called
26:56
mort drucker who’s a famous artist
26:59
okay let’s talk about bought fantastic
27:02
mad magazine
27:03
brilliant but i’m sure peter is a lot
27:05
smarter
27:07
was he the guy behind mad magazine yeah
27:09
mad magazine he was another main art of
27:11
some mad magazine
27:13
not the only but yeah mort drucker shout
27:16
out
27:17
okay all right mort if you’re listening
27:20
we love you right now
27:22
okay us mr and mrs drucker had some
27:26
really good kids
27:29
i’m not suggesting they’re related so um
27:32
he birthed the movement um and the
27:34
science of
27:35
management by objective yeah um uh
27:39
okay ours have been made famous skipped
27:41
forward a little bit by a guy called
27:43
john doa who wrote a book what matters
27:45
most
27:46
um love the book love the philosophy go
27:49
and watch his ted talk
27:50
um uh the
27:53
in between those two kind of points
27:57
this guy called andy grove who was the
28:01
ceo of intel who picked up peter
28:04
drucker’s philosophy of management by
28:06
objective and
28:07
and created okrs the objective is the
28:11
the what
28:12
what do we want to achieve the key
28:14
result the how
28:15
and and and so what do we want to
28:17
achieve
28:18
how we’re going to get there and what
28:20
tells us if we’re on the journey to
28:22
getting there
28:23
so that’s the key result and so when you
28:26
when when we ask and answer the seven
28:28
questions in waymaker
28:30
you’re identifying initiatives and those
28:33
initiatives are actually
28:35
objectives and so they drop onto the
28:37
roadmap as objectives
28:39
and when you ask that last question of
28:41
what matters most
28:42
in terms of what will shift the needle
28:44
what one two or three will shift the
28:45
needle
28:46
you’re committing and prior or
28:48
prioritizing then committing
28:50
and then we set one two or three
28:52
objectives that matter most
28:54
and then the organization sets or the
28:57
people within the organization are
28:58
setting their objectives and key results
29:00
around that
29:01
so that as an organization our strategic
29:03
roadmap our plan is built
29:06
on objectives and key results so if we
29:08
have a vision
29:10
and um we’ll probably do this in the
29:12
vision session
29:15
we’ll write that vision as a vision um
29:18
but it will have a set of key results
29:19
around it that say well this is what
29:21
life
29:23
if we’re achieving this these are some
29:24
of the things that are happening that
29:26
tell us we’re achieving it
29:27
does that make sense um and so we’ve
29:31
we’ve tweaked um that idea of objective
29:34
and key results and said if you’re doing
29:35
anything
29:36
there’s an objective sitting underneath
29:37
it um and
29:39
and so vision market strategy business
29:41
model customer experience employee
29:43
experience are built
29:44
on our objectives and our key results
29:46
and that’s that’s the goal-setting
29:48
methodology
29:50
that’s awesome can you just give us a
29:51
quick example of like a good
29:54
uh okr yeah great
29:57
um it’s probably uh what i said before
30:00
as a goal
30:02
our objective is to increase
30:06
annual recurring revenue by 30
30:09
that’s the objective so um
30:12
it’s clear um it’s accountable
30:16
it’s um hopefully it’s a little bit
30:18
inspirational and a bit of a stretch
30:21
you know we could talk for two hours on
30:23
the science of okrs but we don’t need to
30:25
let’s let’s keep it simple
30:26
underneath that objective we would set
30:28
some key results and we would say
30:30
something like
30:33
increase weekly active users
30:37
from two from x2y
30:41
because that’s a leading indicator of a
30:44
future outcome
30:45
um we could say um uh
30:50
deliver a net promoter score
30:54
of plus 30 points
30:57
that’s a good leading indicator now not
30:59
all care results need to be leading
31:00
indicators but
31:01
um it’s helpful when our key results
31:04
um are emphasized as leading indicators
31:07
because they lead us
31:08
towards the objective which is the goal
31:12
outcome
31:13
and so and the lagging measures will
31:14
just basically
31:16
substantiate correct yeah yeah and so
31:19
you could write a lagging measure of
31:21
um uh achieve a minimum
31:24
of 2 000 monthly users there’s a good
31:27
lagging indicator
31:29
hit a monthly sales result of at least
31:33
20. it’s lagging but it’s a good key
31:37
result
31:38
for us to get there and so
31:41
as we’re building up this science of how
31:43
do we set good goals
31:45
and know if we’re going to reach them or
31:46
not
31:48
you know a we’re understanding what
31:50
metrics are b
31:51
we’re understanding which metrics matter
31:53
towards our success
31:55
c we’re saying well actually our goal
31:59
no pun intended our goal is to drive
32:00
change in these metrics so we need to
32:02
know how to set good goals and manage
32:04
goals and
32:05
actually what we’re managing is not the
32:06
metric because the metrics what’s
32:08
happened
32:09
what we’re managing is the goal and
32:12
who we’re leading are the people who
32:13
were driving the goals and wanting to
32:15
achieve the goals
32:16
massive difference there yeah great
32:19
remember we manage by objective not by
32:22
numbers
32:23
that’s a huge difference i hate sitting
32:26
in boardrooms
32:27
where people are managing by numbers and
32:29
it’s the metric that holds the power
32:31
and suddenly you’re not the goal okay we
32:35
let’s talk about the goal what’s working
32:37
what’s not so
32:38
so in point d when we set good goals we
32:40
have a methodology as a
32:42
as an organization we can set good goals
32:44
that affect change in the metrics that
32:46
matter
32:47
and we can identify the key results that
32:49
lead us towards those goals
32:51
and and that’s why in waymaker
32:54
we have both an objective and key result
32:58
progress so every time you’re moving
33:00
towards
33:02
completing an objective you’re updating
33:04
a key result so
33:06
is it 10 20 30 and that tells
33:10
us if we’re moving towards the goal but
33:12
we
33:13
also have what we call a confidence
33:16
score which drives the confidence index
33:18
which says
33:19
what’s my confidence based on the
33:21
leading the lag information
33:22
that i’m actually going to hit the goal
33:24
because i can be 70
33:26
of the way through a goal and my
33:28
confidence can fall from
33:30
90 to 10 percent and we as leaders need
33:34
to know
33:35
that if a 70 progress confidence is
33:37
moving up or down
33:38
does that make sense yeah and that’s
33:40
probably time to bump the goal
33:42
up as well right it could be it could be
33:45
oh gosh we’re at 70 percent and
33:48
confidence has plummeted
33:49
okay you know we’re almost there but now
33:52
there’s a huge problem let’s talk about
33:54
that roadblock stop
33:55
solve roadblock together or progress is
33:58
amazing
33:59
confidence is high great awesome bring
34:02
it home
34:02
come on champs let’s go um so
34:08
how to set goals that work and know when
34:10
they don’t
34:12
is the secret source to alignment
34:15
and high performance and it is a little
34:18
bit complex
34:18
but it doesn’t have to be overly
34:20
difficult and
34:22
hopefully out of this podcast you’ve
34:23
understood the foundations of
34:25
one metrics two lagging and leading
34:29
metrics
34:29
three goal setting four goal setting
34:32
methodology and okrs
34:34
and five that remember we’re about
34:36
leading people to deliver goals
34:38
not beating people over the head with
34:40
metrics and
34:42
if we make those changes in our teams
34:44
and in our lives then wonderful things
34:46
happen
34:47
that’s great and i think the first place
34:49
to start for people would be
34:51
uh to ask and answer the seven questions
34:54
stu like amen
34:58
preacher so uh so
35:01
if you’re listening to this and you
35:02
don’t know what we’re talking about
35:03
seven questions
35:04
uh sign up go visit waymaker.io sign up
35:08
for a free trial
35:09
uh um start a free trial um it’ll guide
35:12
you through the first
35:13
diagnostic which is the the rapid fire
35:15
survey
35:16
that gets your data in on the health of
35:19
the business
35:20
add your team members it’ll guide you on
35:22
doing that
35:24
within half an hour or so you can have a
35:27
brutally simple but powerful picture of
35:29
the health
35:30
maturity and clarity of your
35:32
organization and you’ll know the areas
35:35
that need to improve from that you can
35:38
set some really clear goals
35:39
and we’re always here ask us questions
35:43
reach out either in the app
35:46
or or via our socials and we’d just love
35:48
to help you see
35:58
[Music]
36:00
[Applause]
36:02
[Music]
36:06
you

Summary: How to set goals that work

Goals that work actually take a lot of work to write well.

But, with practice, using a good methodology leaders and teams can create wonderful goals that create wonderful outcomes.

We are going to explore a basic science of goals to help you set goals that work and know when they don’t.

We’ll cover:

  • Goals
  • Alignment
  • Metrics
  • Leading and lagging metrics
  • A goal setting methodology called OKRs.

Goals put a doorway to ideas

A goal is an open door to an idea.

When we put a goal over an idea it will bring focus to a broad range of options by narrowing an outcome. The goal then becomes the open door an idea can flow through, stop at, or miss.

If we hit the goal and move through the door, we enter a new space, a new level ready for new opportunities.

If we think about goals like an open door, then they become inviting.

Through the open door of goal, we are now ready for new opportunities. Perhaps opportunities that would not be open to us had we not stepped through the first ‘door’.

When we think about goals like this, then we can see they are like energy.

A fixed amount of energy spread out over a wide area is weak. Think daylight on a typical day.

Yet that same energy focussed into a smaller space is powerful. Think of a magnifying glass focussing that same energy onto a piece of paper or wood and a fire will start.

Goals create alignment

Putting a goal in place aligns the energy of the team into alignment.

Goals almost force teamwork. The right goals will encourage a team of people to work together.

Without a clear goal, they will almost certainly not work as a team.

Alignment happens when all of the team know the goals the business needs to achieve, and their own goals are then aligned to supporting the broader outcomes.

How to set goals that work

Goals shift the needle on metrics

Good goals shift the needle on many metrics.

What is the difference between goals and metrics?

A goal is not a metric, but a good goal should include a metric.

A metric is a measure of something.

A goal is a desired change in that metric.

Listen to the podcast here:

A simple example

For example, a football (soccer) team might have a goal to win the game.

To win the game they plan to score at least 3 goals. To do this they plan to have the ball in the attacking half 70% of the time and take at least 10 shots at goal.

The metrics in play are;

  • Goals scored.
  • Amount of time play is in the attacking half.
  • Shots taken at goal.

The goal is winning the game. It is a clear, concrete and specific goal.

Was the goal achieved? This can be determined by a yes or a no.

Many leaders confuse goals and metrics.

Leadership teams often fall in love with metrics. They stress about the metric, without stressing about working on the goals that will shift the metric.

Are all metrics equal?

No.

All metrics are not equal.

To set great goals we must recognise that a metric is an indicator.

It will indicate if a goal is on track or off track.

There are two buckets of indicators.

  1. A lagging indicator or metric
  2. A leading indicator or metric

Lagging Indicators

Lagging indicators are the most common metrics used, often because they are the easiest to measure.

These are metrics that have happened in the past, they are measures of outcomes.

For example, Sales Volume, Total Sales Value, Average Deal Size.

These measures are all indicators of work output in the past.

Lagging Indicators are useful but they are not the whole story.

They do not tell us what might happen in the future.

Leading Indicators

Leading Indicators are measures on activities which help drive a performance outcome. This is in contrast to looking at a metric which tells us the past performance outcome.

Great teams who are focussed on driving a business forward will create a clear view using both types of metrics.

An example of a leading indicator might be brand advocacy measured via an NPS (Net Promotor Score). A fall in NPS is likely to indicate a fall in future sales, conversely a rise in NPS is likely to result in stronger future sales.

How to set goals that work using OKRs

What are OKRs?

OKRs are a goal setting methodology.

OKRs stands for Objectives and Key Results.

OKRs are a wonderful goal setting methodology that is purposeful and practicable. They will help you write a good goal.

We recommend and use the OKR goal setting methodology as part of the execution tool-kit in Waymaker.

Every organisation should establish a goal setting methodology that effects change in the metrics that measure the health of business.

Stuart Leo – How to set goals that work, Leadership Torque. S1 Ep7

Watch John Doerr talk about how OKRs came to be as a tool and explain how they can be used to align teams deliver wonderful outcomes.

OKRs are measurable, inspirational, transparent, and agile.

They are set and reviewed with a frequent cadence generating regular feedback and connection between people which in turn builds trust and autonomy throughout an organisation.

An OKR is made up of an objective and 3 to 5 key results.

An objective should be significant, concrete, action- orientated, and inspirational.

Key Results must be specific, time-bound, aggressive but realistic, measurable, and verifiable.

An example of a good OKR

Objective

Reach 1 million active users per day by 31 Dec 2023

Key results

  • Increase daily active users on the free trial from X to Y
  • Achieve X% conversion rate from free to paid users
  • Achieve a Net Promoter Score of X

The objective is clear and inspirational, and the key results are specific, measurable and verifiable.

Try out Waymaker to plan, set and execute your goals using the OKR methodology.

Here is our sample practice ‘Action Canvas‘ which will help you write a great OKR.

How to set goals that work

3 simple mistakes to avoid

  1. Having no metrics to track the health of the business.
  2. Just defining metrics to watch without goals to effect change.
  3. Setting goals that are all lagging indicators, which makes the business feel like they’re always looking backwards.

If you emphasise leading metrics in your goals, employee engagement and attitudes increase.

About Waymaker

Waymaker enables strategic alignment on teams of 2 to 2,000.

Waymaker is the intelligent business strategy platform that helps you build the organisation of the future, today.

Find your growth gaps, build your roadmaps, align your team with OKRs and see exactly what is needed to win your quarter.

Sign up for a free 30 day trial of Waymaker.io

By <a href="https://waymaker.io/author/stuart-leo/" target="_self">Stuart Leo</a>

By Stuart Leo

Published on June 2, 2021

Stuart is the CEO & Founder of Waymaker. Stuart is a passionate believer in helping people find their organisation's true north and giving them the tools to get them there. When not exploring new ideas in leadership and management, Stuart is with his family exploring the beautiful regions, islands and coast of Australia.

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