How to Set (and Track!) the Right Outcome Goals for Your Business
It’s important to have goals—both in life and in business. Goals give people something to strive for so they can exert their maximum effort and achieve success. Countless organizational management books stress the importance of goal management—the art of setting goals that encourage people to maximize outcomes for the business.
But, which goals should your business track? What are the three types of goals that you should be tracking? And, how can you make tracking employee goals and business goals easy?
What are the three types of goals?
Business goals can generally be sorted into three different categories:
- Process Goals. These goals define processes that should be followed to encourage quality outcomes. These goals typically focus on doing something rather than achieving an end result. Process goals are (barring outside interference) usually considered wholly under the employee’s control to meet.
- Performance Goals. These goals define a standard that should be met or achieved. These goals are used to set benchmarks that employees or teams need to meet and are mostly under their control.
- Outcome Goals. A strategic type of goal that defines an ultimate outcome with a clear pass/fail condition. These goals typically require the efforts of many people to meet, so they’re not under any one person or team’s sole control—one team/employee could do everything right, only for the shortcomings of others to cause them to fall short of the mark.
All of these business goal types are important. However, many organizations get so mired in their immediate process and performance goals that they neglect their more strategic outcome goals.
Why you should establish a goal setting system to accomplish business goals:
Every business should have a goal setting system. Why? Here are a few reasons.
- Setting Business Goals Creates Alignment. Getting all of the “moving parts” in an organization aligned is crucial for success. Setting outcome goals that define what your company considers “winning” helps get everyone in the proverbial boat rowing in the same direction.
- Setting Business Goals Helps with Long-Term Planning. “Where do you see yourself in five years?” This isn’t just a question for new hires—it’s a critical question that businesses need to answer as well. As noted in an article featured on Inc., “When your goals have been defined, you can develop a deeper understanding of the effects of tactical decisions and how they play against [your] strategic goals.”
- Setting Business Goals Facilitates Accountability. Who is responsible for the success of an initiative? How does each person contribute to achieving a specific business outcome? Setting goals helps organizations track how people contribute to their success—increasing accountability and enabling appropriate reward systems that encourage further productivity. However, it’s important to make sure that employees are only held accountable for meeting the goals that they can directly control the outcomes of (such as process and performance goals).
Setting process goals vs outcome goals
Let’s use a hypothetical example of two new start-up companies in the same industry to highlight the importance of setting long-term outcome goals versus just focusing on process goals. Both of these organizations have similar budgets, products, services, and team sizes—the only major difference is in their approach to setting goals.
- Company A. This company focuses solely on process goals for its employee goals. Instead of having an idea of what they’re working towards, each employee focuses solely on getting tasks done. Once finished, no further effort is put into achieving strategic goals.
- Company B. This company adds performance and outcome goals and makes its employees aware of their progress using goal setting frameworks and reporting tools. Each employee has an idea of what success looks like not just for themselves, but for the company as a whole. They also know what criteria contributes to their personal success and the company’s success—enabling them to focus more effort on the things that matter.
In this hypothetical example, which company do you think will do a better job of achieving long-term success? Odds are that it’s Company B.
Why? Because, as the BrightGauge team has seen from real clients, companies that set and track goals for outcomes as well as processes and performance tend to outperform their competitors.
Remember this: goal management isn’t an either/or proposition. Every kind of goal—process, performance, and outcome—is important to your company. Just setting one type of business goal won’t produce the right results!
Best practices for tracking outcome goals
It isn’t enough to simply create a big, aggressive outcome goal and call it a day. To make that goal mean something, you need to be able to track it! And, you need to track it in the right way.
Here are a few best practices for tracking outcome goals:
- Examine Other Companies’ Outcome Goal Examples. How do you know if an outcome goal you’re tracking is the right one for your company? One way is to examine what kinds of long-term goals other successful organizations in your industry are using. You can often find long-term goals or plans listed right on a competitor’s website or in their social media. Leaders from these businesses may also share their outcome goals when discussing their business in TED talks or other social gatherings.
- Try to Break Larger Outcome Goals into Smaller, More Manageable Chunks. Let’s say your business usually does about $75 million/year in revenue and you have a big goal of “Hit $100 million in revenue this year.” Breaking this goal up into smaller outcome goals of “Hit $25 million in revenue this quarter” can help give your people a short-term goal they can target aggressively and keep them motivated.
- Find Employee Goals That Support Outcome Goals. To keep employees aligned with your business’ outcome goals, it’s important to set the right process and performance goals. For example, if your outcome goal is “Hit $25 million in revenue this quarter,” then you should be tracking employee goals like “Close $25,000 in new deals each month” and “Make X sales calls per day” (where “X” is a number based on the average talk time with a prospect over the phone) for sales people. Customer service goals like time to resolution or successful customer issue resolution rate can contribute to customer retention—making them worthwhile goals to track for supporting a revenue outcome goal.
- Use a Goal Setting and Tracking Solution. Employee goals are meaningless if there isn’t a reliable and accurate method of tracking them. Using a goal tracking software to set and track employee progress towards their performance and process goals can help you keep your business on track for meeting its outcome goals. Being able to share goal information with employees in real time can help keep them motivated and enable them to course correct if they fall behind on a particular goal.
Set the right outcome goals (and track them with ease) through BrightGauge!
Since using a goal tracking solution is a best practice for monitoring your progress towards your outcome goals, BrightGauge is an ideal tool for businesses.
With BrightGauge’s online data dashboards, your can easily put your business’ most important outcome goals (like revenue targets, total number of customers, customer satisfaction goals, etc.) in a central view pane that everyone in the organization can see.
You can also pick and choose role-based employee goals that support your desired business outcomes—then let your employees see how well they’re meeting those goals. This helps keep everyone rowing the boat in the same direction to produce real results!
Don’t wait – Reach out to BrightGauge now to get started on tracking your mission-critical business goals!