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Goal Summit 2016: Goals – The Missing Link Between Strategy and Execution
The document discusses the critical role of goals in linking strategy to execution within organizations, highlighting common obstacles such as lack of performance culture and agility. It emphasizes how goals can drive performance by acting as blinders, links to align activities, bold hypotheses to encourage innovation, and signals for coordination among teams. Strategies for effective goal setting and management are suggested, along with risks associated with goal strategies and ways to mitigate them.
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Similar to Goal Summit 2016: Goals – The Missing Link Between Strategy and Execution
Goal Summit 2016: Goals – The Missing Link Between Strategy and Execution
- 1. © Copyright 2016Donald N. Sull Goals: The Missing Link Between Strategy and Execution Don Sull MIT @simple_rules
- 2. © Copyright 2016Donald N. Sull 2#GoalSummit STRATEGY ? RESULTS
- 3. © Copyright 2016Donald N. Sull 3#GoalSummit Goal Summit Mobile App 1 2 3 4
- 4. © Copyright 2016Donald N. Sull 4#GoalSummit Which is the biggest obstacle to executing your company’s strategy? q Lack of performance culture q Activities do not support our strategy q Lack of agility q Inability to work across silos q We have a strategy Results
- 5. © Copyright 2016Donald N. Sull 5#GoalSummit Goals drive execution in four ways Blinder Link Bold Hypothesis Signal
- 6. © Copyright 2016Donald N. Sull 6#GoalSummit 80% 90% Goals as blinders
- 7. © Copyright 2016Donald N. Sull 7#GoalSummit Source: Survey of 8265 respondents in 305 organizations. Number of respondents varies by question. Blinders drive performance 92% 87% 44% 35% Specific Handful Regular feedback Ambitious
- 8. © Copyright 2016Donald N. Sull 8#GoalSummit % of employees who answered “Make ambitious commitments even if you are not sure how to achieve them” Imagine you were giving advice to a newly hired manager. What suggestion would you give about making performance commitments? Source: Survey of 5385 respondents in 192 organizations.
- 9. © Copyright 2016Donald N. Sull 9#GoalSummit 59% 11% 8% 5% 5% 1% Past performance Technical expertise Acting with integrity Political connections Ability to adapt to change Pursuing ambitious goals Factor that most influences promotions
- 10. © Copyright 2016Donald N. Sull 10#GoalSummit Goals as links
- 11. © Copyright 2016Donald N. Sull 11#GoalSummit Links align activities to strategy Source: Survey of 8265 respondents in 305 organizations. Number of respondents varies by question. 84% 66% 46% 42% Developed goals with my boss My goals link to my unit's goals My boss explains how our goals support company strategy Know company's top 3 goals
- 12. © Copyright 2016Donald N. Sull 12#GoalSummit If a strategy falls into a company and no one understands it, does it make a difference?
- 13. © Copyright 2016Donald N. Sull 13#GoalSummit Goals as bold hypothesis
- 14. © Copyright 2016Donald N. Sull 14#GoalSummit R. M. Cyert and J. G. March, 1963, A Behavioral Theory of the Firm, (Englewood Cliffs, NJ: Prentice Hall) Conservative goals narrow search • Incremental improvements • Me-too innovations • Cost reductions -----------Goal----------- --------Status Quo-------
- 15. © Copyright 2016Donald N. Sull 15#GoalSummit -------Goal------- R. M. Cyert and J. G. March, 1963, A Behavioral Theory of the Firm, (Englewood Cliffs, NJ: Prentice Hall) Ambitious goals trigger broad search --------Status Quo------- • Disruptive innovation • Creative solutions • Build new capabilities • Business model innovation • Rapid learning
- 16. © Copyright 2016Donald N. Sull 16#GoalSummit Goals guide iteration Source: Survey of 8265 respondents in 305 organizations. Number of respondents varies by question. 27% 28% 34% 50% Discuss difficult issues openly and honestly Consstently analyze variance from goal Met regularly with boss to discuss progress Revise goals more than once per yearSet goals ExecuteCourse correct
- 17. © Copyright 2016Donald N. Sull 17#GoalSummit Goals as signal
- 18. © Copyright 2016Donald N. Sull 18#GoalSummit Goals for coordination Source: Survey of 8265 respondents in 305 organizations. Number of respondents varies by question. 12% 21% 35% Can learn colleagues' performance Can learn colleagues' goals Key partners understand our goals
- 19. © Copyright 2016Donald N. Sull 19#GoalSummit 1 2 1 1 1 1 3 3 3 4 3 6 5 7 7 10 0246810 #ofOrgs 0 .2 .4 .6 .8 1 % Public N = 58 orgs Organizations that created its first goal after start of quarter and organizations with fewer than 10 goals are not included. Deleted goals are not included. % of Goals in Org that are Public 2015 Q4 Transparency Goals want to be transparent
- 20. © Copyright 2016Donald N. Sull 20#GoalSummit Strategy • Develop strategy for execution • Ambitious but not delusional • Maintain shared strategic context ResultsGoals Leadership capabilities • Master goal setting best practices • Provide useful feedback frequently • Lead discussions to course correct Performance management • Linkage of goals to compensation? • Promote on ambition? Performance? Resource allocation • Allocation of money and talent linked to goals • Resources reallocated on same cadence as goals are revised Data analytics • Tailor data to goal-specific metrics • Draw on multiple, external, real-time data sources • Ensure data is timely, granular, and credible
- 21. © Copyright 2016Donald N. Sull 21#GoalSummit Risks of goals Steps to manage risk Decrease cooperation • Hire and promote team players • Decouple compensation from individual goals • Visualize interdependencies Cut corners • Strong checks and balances for key risks • Fire leaders who cut ethical corners • Make goals and performance transparent Inhibit learning • Mix mastery and performance goals • Don’t link compensation directly to mastery goals • Reduce target completion rate Decrease intrinsic motivation • Employees generate own goals • Encourage tinkering • Align goals to inspiring mission Short-term focus • Link quarterly goals to longer-term strategy • Break long-term goals into shorter sprints Tunnel vision • Multiple metrics per goal • Ongoing discussion of weak signals and anomalies • Tolerate some positive deviance • Encourage tinkering List of known risk from Ordonez, L., Schweitzer, M. E., Galinsky, A., & Bazerman, M. (2009). Goals gone wild: How goals systematically harm individuals and organizations. Academy of Management Perspectives, 23 (1), X–X