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Another year is through and the excitement and optimism of a new one is upon us. Many people like to make resolutions and it seems that almost as many don’t manage to keep their resolutions for long. You are more likely to make your New Year’s resolution a reality if you make it a firm goal. To that end, this is the second of two posts on goal setting. This one originally ran on November 30, 2010 and I hope will help you to see the difference between
Lean Goal Setting and Just Another Resolution?
As business leader, you are probably pushing to hit your year-end goals. You will be setting your goals for 2011 before you know it. Lean Goal Setting will help you set goals that are both effective and aligned with the needs of your business. Lean Goal Setting is a 5 Step process:
- Organizational Goal Setting: The process should start with a thorough SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats). Goal setting in a Lean world should be centered around providing improved products and services to your customers. Yes, you need financial goals for your company as well. This must be balanced by providing a Quality product for the long-term. The Organizational Goals need to be limited to a vital few so your company can stay focused. The Toyota Way teaches that the Executive Staff of a Lean Manufacturing company sets goals in terms of Time, Quality, Cost, and Innovation.
- Goal Alignment: Goals must be aligned from the corporate boardroom to the factory floor. The best way to achieve this is for managers to meet with their staff to review the corporate goals and to decide how they can support these objectives. Start with a clean sheet. There may be some goals that are not important anymore and you want to focus on those that are. This meeting can be a valuable strategy session where you agree to actions that will ensure your team achieves its objectives. If each layer of management ensures their goals are aligned, the goals will cascade to the shop floor meeting the needs of the business. If not, precious resources will be wasted on activities that are good but not great.
- Passionate and SMART Goals: Goals need to be measurable. How do you know if you are improving if you don’t measure it? Make your goals SMART (Specific, Measurable, Attainable, Realistic, Timely). Assign ownership of the goal to someone who has a passion to exceed your expectations.
- Goal Measurement: Naturally we want to exceed expectations on all of our goals. At the same time, nothing is more demoralizing to your team than a pass/fail system of goal measurement. Teams are discouraged when they make great progress on a goal only to fall just short of the metric and to receive no credit for the improvements. Use a three-tiered grading system for better long-term results: Green – meets or exceeds the goal and is delivered on time (90-100% attained); Yellow – approaching the goal (80-89% attained); Red – did not meet the goal (less than 80% attained).
- Follow-Up using the Deming Cycle: Plan – Do – Check – Act. Each of the previous steps are planning. Your strategy sessions with your team is planning as well. Taking action against your goals is doing. Regular follow-up is where many teams fall down. You should review your progress against your goals and key performance indicators on a weekly or monthly basis. You should also meet with your team members individually two or three times through the year to discuss their progress. Mid-year adjustments and ongoing review is the act step.
Goal setting and effective follow-up is critical to business today. Setting SMART goals and using the Deming Cycle to model your follow-up can help you achieve your potential. What lessons have you learned about setting goals? What works for you? What didn’t work in the past? What has made you a better leader?
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