In order to set goals, targets, and KPIs, a strategy is needed. The strategy is telling us where we need to go, why we need to go there, when we need to be there, and how to get there. In other words, it contains the answer to the very important question WHY? Why has two sides: 1 Why, for the business, and Why, for the organization – for the people. There has to be a higher purpose for why we are doing whatever it is we are doing. When the strategy is in place, we can begin the work of setting overall objectives, break them down into goals and finally set targets and KPI’s.
Overall objectives relate to what it is we want the strategy to deliver, in terms of both quality and quantity. The objectives are necessary in order to choose relevant goals. Goals are more specific and must be measurable. Some prefer to use SMART goals as a framework, and some prefer to make use of “Break-through goals”. SMART goals are Specific – Measurable – Achievable – Relevant – Time-bound and is a great way to verify the quality of the chosen goals. Utilising “breakthrough goals”, you set the bar where it is strategically necessary or desirable, without taking into consideration what the organization is able to cope with. The purpose of this is to force the organization (or the team) to “think outside the box” and find new ways to run the business, managing the processes, or carryout the project – and finally to change the culture.
Different framework for setting objectives and goals exist. One is the SQDEC framework. One or more objective is chosen within each of the areas: Safety – Quality – Delivery – Employee/Environment – Cost. Then specific goals are chosen within each area aligned with the associated objective. Many variations of the SQDEC exist. Choose the one most appropriate to your business or project.
Having set the objectives and goals, it is now time to choose relevant KPIs. KPIs (Key Performance Indicators) tells us regularly, how likely we are to achieve the goals – and finally the objectives of the strategy. It is custom to make the KPIs visible, e.g. on a board in the production site or in the project room, so they can be monitored at all time, and countermeasures can be decided to keep the project, processes, or delivery on-track, insuring that the goals are met. A KPI should display 3 things very clearly: 1) what is the expected level of performance (target)? 2) What is the current status, and 3) What is the trend? Many companies plan so called scoreboard meetings systematically to monitor and improve performance continuously. Depending on the nature of the business and the processes, this can be anything between daily or every fortnight.
Often the review of the KPI’s, which is a very fact-based assessment, is accompanied with a Hi/Low report. Highlights/lowlights are more focused on the non-fact-based issues, like “What went well this week?” Could be: what was implemented successfully, which activities where finalised with satisfactory results, etc. Furthermore, “What went wrong this week?” Could be: which targets were not met. Which activities was cancelled or postponed, etc. Also reviewing the “project milestone plan” to follow-up on the planned effort areas is often done at each “Status meeting” or “Scoreboard meeting”.
Finally, a business review of the goals is set up – could be quarterly. A business review is to make sure where the organization is now, if the goals are achieved or if the project is going in the right direction. The most important thing about business reviews is to assess objectives based on data which it representative and up to date. The essential of the business review is not only to work on current data, but to analyse the trends. The goal of the business review is not only to get the information but to take further action as a result of the review. It might be about the actualisation of the goals, changing the KPI’s, asking for the support from external business consultants or trainers.
Author: Ewa Ginalska
Ewa specializes in the issues of: management systems, leadership, image, project management, including work with demanding teams, has over 15 years of managerial experience as QMS/IMS Proxy, Quality Manager, NDT Laboratory Manager, HR Manager, New Business Manager. In 2017-2018 as a project manager she run a standardisation project for one of the biggest food producer worldwide. From 2017 – 2018 a vice-president of the Association of Management Consultants and Trainers MATRIK, responsible for sales and promotion. Leader to establish The Code of Professional Conduct for management consultants. She is furthermore an author of many publications on the subjects of consultancy, management systems and leadership and a university lecturer and tutor for graduates.
An article prepared as part of the ProBio Małopolska project