Are you frustrated that your business is not where you’d like it to be? Annoyed that your team members aren’t pulling their weight? Could it be because they they don’t understand what’s expected of them?
I know you’re thinking; ‘that can’t be it’. It’s obvious and clear what your goals are. You might even have a great vision statement that the whole business knows and agrees with. Unfortunately that’s not all you need…
Without documented Goals and KPIs for each role in your organization, it can be difficult to get everyone pulling in the same direction. A lot of energy is wasted pursuing things that seem like a good idea, but are not on the critical path to your goal.
Goals help us prioritize and decide how to spend our time
It helps to remember that just like us business owners, our team members are also being pulled in multiple directions every day. There are new ideas that seem really cool, extra things we could be doing for our customers, processes we could be improving, and possibly multiple people asking us to do different things.
With clear goals in place, team members are more likely to make the better decisions about how to focus their time and energy (which of course are limited!). Without clear goals, we leave those decisions in their hands – and they can often end up being based on the types of work they prefer doing or simply reverting to the way they’ve always worked.
How to set goals for each team member
Goals are not set in stone forever, but they shouldn’t change on a daily basis either. For most businesses, setting goals on a six-monthly basis is a great foundation. You might dedicate a week, twice a year, where you evaluate and reset everyone’s goals. Then you spend the next six months actually implementing and taking action against those goals.
During this goal setting process, sit down with your team member and review their role and past performance. Discuss how their role fits into the business and how it feeds into the broader business vision and goals. Then brainstorm some goal alternatives and ultimately choose one that is meaningful and achievable.
What if you don’t know what their goal should be? Or what if there are a lot of goals they need to focus on? If this is the case, it’s a strong indicator that you need to do some more deep thinking. Having too many goals, or an undefined goal will not lead to good performance. Review our tips for prioritizing and think about what is the most important outcome this team member could achieve in the next six months.
Examples of Team Member Goals
Goals don’t have to be complicated – in fact the best ones are usually very simple. Obviously they differ for different businesses and different roles, but here are some examples so that you can see how simple they can be.
In the next six months, my goal is to:
- Maintain or improve customer satisfaction across our client base
- Attract and signup more clients in the xxx industry
- Release the first version of our new product and have several early users
- Get solid finance processes in place to better manage our cash flows
- Deliver outstanding service that our clients love
- Grow my managed accounts
Ideally there is a goal statement that is somewhat inspirational, while also making it clear what the employee should be focused on.
How to set KPI’s for each team member
Once you have a goal statement, the next thing is to quantify the desired outcome with KPIs (key performance indicators). Note that these can also be referred to as OKRs (objectives and key results) or just objectives but they are usually referring to the same thing.
To set these, you need to look at the baseline levels and decide how much you want these to change. Also consider how much is within the team member’s influence and choose KPIs that are a stretch, but can reasonably be achieved.
Examples of team member KPI’s
KPI’s need to be something that is measurable. But be careful not to get distracted with improving how you measure things – instead, find a creative way of measuring only the most important metrics.
Here are some examples of KPI’s for a few different goals:
- Goal: Maintain or improve customer satisfaction across our client base
- KPI: Reduce our complaints to an average of less than 1 per week
- KPI: Ensure 50% of our customers have been personally contacted within the last 6 months
- KPI: Attract 10 or more five-star reviews
- KPI: Reduce customer churn to 5% or less
- Goal: Attract and signup more clients in the xxx industry
- KPI: Obtain press in 2 publications in the xxx industry
- KPI: Attract 100 leads from the xxx industry
- KPI: Signup 10 new clients from the xxx industry
- KPI: Create a specific FAQ page for the xxx industry
- Goal: Release the first version of our new product and have several early users
- KPI: Deploy first version for desktop by end of March
- KPI: Have 20 regular users by end of May (using 3 times a week or more)
- Goal: Get solid finance processes in place to better manage our cash flows
- KPI: Create debt recovery process with follow up emails (templates) and calls (scripts)
- KPI: Reduce +60days debt to <20%
- KPI: Reconcile bank account at least once per week
- Goal: Deliver outstanding service that our clients love
- KPI: Respond to all service calls within 48 hours
- KPI: Reduce subsequent call outs to <10% (create and use checklist)
- KPI: Collect 10 glowing customer testimonials
- Goal: Grow my managed accounts
- KPI: Reduce churn of managed accounts to <3%
- KPI: Add 20 new accounts (net)
- KPI: Increase average spend of managed accounts by 15%
Review Team Member Goals and KPI’s Weekly
Setting goals and KPI’s is the first step, but having the discipline to review these each week and really keep them top of mind is what will make the difference in your team members’ performance.
During your weekly 1:1 meetings, ask them about their progress towards these KPI’s and get them to tell you which one/s they’re currently focusing on and what their results are so far. Regardless of the other ideas they will have for projects to work on, keep bringing the discussion back to the impact any given activity will have on their KPI’s. Make it very clear that these are the most important things.
If you’ve been managing with a different style, this might seem a bit unnatural at first and yes, it can be somewhat jarring for your team member. But after a few weeks, you’ll find that it comes naturally and your employees will naturally be focusing on actions that will move the needle on their KPI’s and goals.
Once you have each team member hitting (or at least moving towards hitting) their goals, you’ll see your business performance improve dramatically.