19th August, 2020
Incorporating a fresh goal-management framework, like OKRs or SMART goals, is a great use of any downtime that COVID-19 has caused, or even just as part of your new financial year planning.
The strategy behind the way SMEs and startups run their businesses rarely gets reviewed.
Hustle culture demands for businesses to always be operating at full throttle, and the business owners almost never get a chance to take a step back and rethink the strategies by which their organisations are driven.
COVID-19 has given many Australian and New Zealand-based small businesses no choice but to reflect on the fundamental elements of their offerings and take their existing strategies back to the drawing board to come up with ways to improve.
Reviewing the framework your business uses to manage its goal setting is an example of a great strategy project for 2020.
The extra time allows you to trial different strategies, observe their effectiveness, and eventually decide on one and integrate it seamlessly into your daily routine. If done correctly, an improved goal-management strategy will be business-as-usual by the time things are back to normal.
While there are many different frameworks to consider, here are two that some of the most successful organisations in the world have used for decades.
Used by massive organisations like Intel and Google, the OKR framework helps businesses set their goals effectively, and create achievable pathways to reach each of those goals.
The idea behind the OKR framework is that by creating a roadmap with small milestones that ultimately contribute to your organisation’s overarching goals, you are far better placed to actually achieve those goals and actively work on improving your business one step at a time.
The OKR framework is comprised of three components:
These are the goals and outcomes that the organisation is setting out to achieve. Objectives are what drive the business forward and provide meaning and reason to the daily routines that staff undergo.
Examples of an Objective could be things like; “improve our organisation’s public image”, “increase our company’s revenue this year”, and so on. As long as the objective is in the realms of possibility but isn’t something that can be achieved through a quick fix, it belongs in this category.
Key Results are the smaller and more short-term goals that form a pathway to achieve the company’s objectives.
If the one of the company’s Objectives were to increase revenues for that year, examples of Key Results could be thing like; “hire a new business development manager”, “bring on 30 new clients”, or “deploy a new business management system”.
Mapping out the steps that need to be taken in order to reach a Key Result is what Initiatives are all about. Each individual Initiative isn’t meant to result in significant change, but when grouped together, they make up one significant step: a Key Result.
Continuing from the above example, initiatives might include “contacting a recruitment firm”, “research different systems that meet the business’s needs”, and so on.
This framework primarily focuses on the process an organisation goes through when formulating their goals. Each letter in the word SMART represents one of the five criteria that quality goals are made of.
When setting goals for your organisation, they need to have a very specific scope in order to be effective. By staying away from broad guidelines and ambiguous outcomes, you are taking the first step in formulating a solid goal.
Real outcomes need to be measurable. Coming up with a success or fail rate for your goal infuses a sense of genuine motivation and results in quantifiable success.
It’s nice to set goals, but to remain motivated, the goals need to be within reach. A solid goal will strike the perfect balance between achievable yet challenging and will push the entire team to see the goal through.
Goals that don’t resonate with the team and organisation’s overall mission statement are normally a waste of time and difficult to remain motivated for. Aligning the goals with the overall organisation is crucial if they are to be reached.
Open-ended goals are dangerous. They can cause burnout and bring a sense of hopelessness to the organisation. If you want to formulate SMART goals, make sure they are bound by a timeframe.
If after testing each of these management frameworks within your organisation you find that one of them fits the bill, using it to drive your business strategy forward can do extraordinary things to motivation, productivity and satisfaction within your organisation.
Hoping to up your goal-setting game in 2020? Your business can’t hope to hit targets if you can’t access key financial metrics in real time and for that you’ll need the best online accounting package available. The MYOB Essentials is your answer, and it’s fully compliant for both Australian businesses and their New Zealand-based counterparts.