Target Setting Process – stay in control!

The corporate game called target setting; how to stay on top of it?

More than half of the executives’ targets are shared and based on company KPI’s / OKR’s and might be shared with other areas or departments. While this makes a lot of sense from a company perspective, the individual’s power to control the path towards target achievement becomes more and more diluted and finally lost. In this article I show how control can be – partially – regained.

Mauricio[1], one of my clients, told me about last year’s meeting with his boss about his targets for this year. He was disappointed, to say the least. But what he reported was not new neither to me and probably nor to most of you.

He told me that eight out of ten targets he received were a copy-paste from either the company KPI’s / OKR’s or shared targets with his boss. The only two targets which were really his, were related to potential improvement areas from his recent performance review. Nothing of what he prepared made it to the document.

On top of that his boss told him how much he counts on his cooperation and that he needs him to stay motivated.

While the better part of his motivation was lost, for this year’s process he wanted to be better prepared. This is what we did.

1 Don’t be surprised.

Looking at the target setting process from a distance, it makes a lot of sense that corporations want to break down their overall targets to the teams and the individual employees. If sales are an important matter for a corporation, the corporation will want every executive to be held responsible for achieving that goal.

Prior to start working on his targets, Mauricio prepared and updated his knowledge on the goals and targets of his company. He felt that this was an easy but time-consuming task, since – in general – those goals and targets are communicated, but spread over many places.

He checked the recent posts on the company’s investor relations page for data on the outlook and planned core activities for the coming years. He re-visited the latest internal communications, company-internal websites, and townhall-presentations.

He also reached out to his boss as well as to some other colleagues in adjacent areas / departments and chatted about the short- and midterm overall targets and what would probably be cascaded down during the next target setting process. By doing so, he got a good and complete picture of what could be expected.

Now he had to convert the company – targets into his own.

2 Be strategic with your proposal.

Mauricio is working in commercial administration, his work is closely connected to sales, marketing, and supply. He took all current company goals he became aware of and x-rayed them from the viewpoint of his own job. He asked himself these questions;

  • How can I break down the overall target into sub-targets and find one which makes sense for activities I can perform and/or outcome I can produce in my position?
  • In which way can I make myself accountable for achieving or contributing to the achievement of this (sub-) target? Which activities would I have to perform and what would be the outcome I need to produce?
  • Can my contribution to this target be measured with hard data?

3 Communicate intelligent.

During the target setting conversation with his boss, Mauricio not only showed an in-depth knowledge of the company’s plans and aspirations, but he also had a better alternative to offer when asked to accept generalized targets as his own.

He told me later that the Company target “Reduce working capital by 15%” was converted to:

Create reports to show:

  1. ABC-analysis of inventories in his area of responsibility and influence.
  2. Relate the outcome of such analysis to the demand plan and sales plan.

Set up teams to work on:

  1. Adjust inventory of A-inventory.
  2. Eliminate non-moving items.
  3. Address slow moving items.

Of course, this did not work in all cases. Of course, Mauricio’s boss was not at liberty to accept all his proposals – but the overall outcome of this year’s target setting was much better than last years.

Even for the targets where Mauricio’s counterproposal did not go through, he was able to negotiate the actions he would take and how his performance would be measured.

And he gained additional exposure in his company by driving cross-departmental teams to working toward company goals.

4. Win-Win

At the end there is a win-win. Mauricio – and probably his co-workers – got better targets to work on for the next term, but more important, he re-gained power of control of those activities, that will directly impact his performance and though his next years bonus and mid-term career opportunities.

[1] I changed his name.

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