Join Mike Figliuolo for an in-depth discussion in this video Setting goals, part of Building High-Performance Teams.
- One of the coolest elements of leading a high performing team is the people on that team are typically very goal oriented. But goals are very dangerous if you don't set them well. You have to set appropriate commit and stretch goals because the behaviors you're going to drive with the goals are either going to be very desirable or undesirable. There are goals that can be set that are sandbags and are really easy versus a good commit goal, and you can also set stretch goals that could be very problematic.
In terms of setting goals, I encourage people to set two goals. If you only set one goal, there's a problem with that. If you set it too low, your team is going to coast. If you set it too high, they'll be really frustrated if they don't achieve it or if they don't believe it's achievable in the first place. What I encourage you to do is set two goals. First, a commit, and then a stretch. A commit goal is the "You can fire me "if I don't hit these numbers" type of goal.
It is a promise to the organization that you will absolutely deliver this without fail. The stretch goal is the, "Hey, if "everything goes great and we get a "little bit lucky, we can hit that number. "We're not exactly sure how we'll get there, "but it'll be great if we do." Then what you can do in terms of compensation is slope bonuses accordingly. The commit gets the minimum bonus. The stretch gets the maximum.
Then just do a pro rata share in between the two. Commit goals: it needs to feel attainable. People need to look at it and say, "Yes, I am confident I can achieve that, "and I feel like I'm obligated to the organization, "to my peers, to deliver on this number, "whatever the metric is." There have to be consequences if somebody misses the commit. No bonus, no raise, reduced responsibilities.
In some cases, reassignment out of the organization. When you're setting that commit, you have to be careful that your people don't sandbag and they come to you and say, "Well, here's my commit and I think it's "going to be hard to achieve" when really it's quite easy. You need to do that backchecking to make sure that it is a true commit. Something that they can hit but isn't so easy that they're going to coast. Stretch goals are the ones that should really excite the members of your team.
They need to be big. They need to be audacious. People should be a little bit uncomfortable when you give them that stretch. Hopefully they know, "I know how I would "get 70 percent of this, and the other "30 percent, I'm really not quite sure." There's going to be luck required and a lot of hard work and a lot of skill. The important part about setting a stretch is there can be no negative consequences of missing that stretch. That stretch needs to be pure upside.
If they capture any part of it, there's a reward for doing so. If you assign negative consequences to missing the stretch, your team is going to start ratcheting down their expectations and what they're going to commit to because they fear those negative consequences. One of the great things about running a high performing team with an appropriate stretch goal is they figure out how to achieve it. They drive hard. They get creative.
They collaborate and they figure out how to hit those big stretch goals together. Again, you have to be careful of them sandbagging within the stretch because there's bonus on the line. People know, "If I hit that stretch, "there's more money going in my pocket." Your requirement as a leader to backcheck and make sure that that stretch is truly a stretch is critical, otherwise you're going to be paying out a lot more bonus money than you think, and you're leaving upside for the organization on the table.
As you start thinking about setting the goals for your high performing team, think about two types of goals and get them to articulate that commit and why they think it's a fair commitment in terms of what they deliver to the organization and then lay out that really big, really exciting stretch where it's not quite clear how they'll get there, and it will take a lot of hard work, dedication and collaboration between your team members to achieve it and then pay your people accordingly when they do.
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