What Happened to Our Objectives?

Introduction

With the introduction of the new versions of the ISO standards and more emphasis being placed on Performance Indicators (clause 4.4.1) organisations appear to have forgotten about identifying and setting appropriate objectives surrounding their management system.

We often see the same old objectives stated or organisations are just using their Performance Indicators and using those as their objectives which isn’t necessarily the most effective method. Objectives should be about adding value to the business and achieving something great which can be interpreted in a number of ways depending on your own organisation.

Objectives should be supported by a plan and not just be statements, if you don’t have a plan on how to achieve them, the chances are you are not going to meet them as you haven’t changed anything or set the focus.

The approach could be a little different for identifying suitable objectives to meet relevant standard requirements and business needs.

Identifying Objectives

Align with the context of the organisation “A computer on every desk in every home”-Microsoft.

Understanding the context of the organisation is key to setting the high-level objectives of the organisation which all other objectives should link to. Think about what the business is there to achieve, what is the strategic direction of the business, where do we want to be in 5 years time, what problem are we there to resolve? An auditor should discuss the context of the organisation with top management to ensure the goals and objectives have been set around the strategic direction of the business. You can use the mission statement or quality policy to highlight the strategic direction and set the objectives around this. But remember, a mission is directional and not an objective.

Time and time again we see the objective to “maintain approval to [insert standard here]”, that kind of goes without saying as if you weren’t going to maintain approval then you might as well not do it.

Objectives should be about adding value to the business which can be to remove redundant processes, implementing new processes, launching new products, diversifying into new markets, improving social interactions, improving well-being…the list is endless.

Each organisation should try to identify 3–5 key objectives to improve the business with a focus on the standard management system. The standards will always tell you to identify objectives to improve the management system but that doesn’t mean you have to set them around the management system itself. The management system is the business so think broader than just the standard.

Align Objectives to Promote Teamwork

Once the top-level objectives have been defined, these should be cascaded to all relevant departments and even sometimes external organisations if they have an impact on these objectives, this could be especially important for environmental and health and safety management systems.

However, don’t force all the objectives onto the departments if they are not directly impacted by them or can’t contribute. You should allow the departments to identify their own objectives which will align with the top objectives in some instances but can also just be personal goals which they would like to achieve for the business.

If you force objectives down the line then you loose employee engagement and interest, you need to allow them the freedom to create their own as well as some of the organisations.

Theory of Insanity

One of my favourite quotes is Einstein’s theory of insanity “doing the same thing over and over and expecting different results”. If you set an objective or a target but don’t change something in what you are currently doing then how can you expect to achieve them? Some organisations will say a 10% improvement on something is their goal but in reality, 10% is what you probably would achieve in normal circumstances and what everyone else is doing.

The biggest problem seen within organisations surrounding their objectives is that they don’t have a plan on how to achieve them. The standard doesn’t necessarily state that you need to document the plan but it is advisable to help in the communication of these and focus attention. They do, however, require you to have a plan.

SMART

There are certain tools used that are commonly known but there are also others that might be more appropriate to the business. The most common tool is SMART objectives, this process has been around for years but not often seen which is surprising.

SMART:

Specific

Measurable

Achievable

Realistic (or sometimes relevant)

Time-Dependent

The SMART process helps you to set out a clear objective but not necessarily how you are going to achieve those objectives.

OKRs

Another tool which I have recently read about which I found pretty inspirational and prompted me to write this article is OKRs (Objectives and Key Results), this tool is used by many of the top achieving organisations in the world and is well presented in John Doerr’s book “measure what matters”. Objectives are the “what are we trying to achieve” and the Key Results are the “how are we going to get there”.

OKRs take the objectives and require you to identify the plan on how you are going to achieve them and what results are expected. Many objectives and goals are set without much thought going into how they are going to be achieved. I highly recommend the book but have emphasized some key messages within this article along with my own personal knowledge and experience.

To use OKRs correctly you should identify an objective and have no more than 3 key results set against that objective, the key results if achieved should get you to meeting the objective. The key results are what you would review and track to monitor progress.

The entire OKR process is set out within John Doerr’s book but to help visualise how they work I have set out a short example below:

Objective: To launch our new product xxx by the end of 2020

Key Results

1. 1 Produce a prototype by the end of qtr 1
2. 2 produce a sample of 10 xxx and send out for beta testing by the end of qtr 2
3. 3 Produce an initial batch of 5000 xxx by the end of qtr 3

These three Key Results would then be flowed to the relevant departments and will be their objective, and in order to achieve their own objective, they would set their own Key Results. For example, the development team would have the objective to produce a prototype by the end of Qtr 1. They would identify three key results needed to meet that objective which may look something like:

1. 1 Establish a design team by the end of jan 2020
2. 2 Perform critical design review by end February 2020
3. 3 Approve Design by mid-march 2020

KPIs

So here is the reason why KPIs should not be used for objectives on their own, the KPIs are more of a tool for monitoring progress or ensuring something is on track. They aren’t necessarily highlighting what you are trying to achieve. KPIs can, however, be used to evidence and communicate how you are doing against planned targets.

For example, you might use a KPI to track the 3rd Key result from the first objective of producing an initial batch of 5000 xxx by the end of qtr 3. You might break this figure down further to identify a daily or hourly production rate that needs to be hit in order to achieve the 5000.

Don’t Set and Forget

“They are in our management review” is the most common response when auditors ask where objectives are defined and reviewed, and often the management review only takes place once a year. You have to question if this is the most effective method and are organisations really trying to achieve those objectives if they are only reviewing once a year.

Objectives ideally should be reviewed quarterly but can be monthly dependent on what activities are being undertaken by your teams, annual is too infrequent. If you are not on track with your objectives, leaving them a year before you review will not allow you to adjust and reset as necessary to ensure you achieve your planned objectives.

The greatest single motivator is seeing progress towards objectives so a quarterly review helps keep momentum and engagement at the right levels.

The single act of writing down a goal will go towards achieving it, writing them down increases the likelihood of achieving and sharing increases the likelihood even more. If the objectives are stated within the management review minutes then how are these communicated to all employees within the business? Everyone will have a role to play in achieving the objectives so ensure they are communicated.

Progress needs to be tracked and visualised for all employees, software can be used to make this process easier but can be as simple as excel charts. Ensure your data is accurate, you are only kidding yourself by not presenting true and meaningful data. An external auditor should be checking the validity and accuracy of the data presented but this should not be your reason for ensuring the information is correct.

Quarterly Review

The quarterly review should be performed with all objective owners presenting on their team’s objectives and progress towards meeting them, all other attendees should objectively critique the results in a constructive manner. One of the key questions that should be answered is “are they still appropriate?” is the objective and target still appropriate to the current business strategic direction and market?

A system can be used to quickly identify the status of the objective, for example; Green ( On track and continue as planned), amber (almost on track, update and refine the target or plan), Red (off track or no longer suitable, stop the objective and end if no longer suitable).

The review should also be a time for reflection on last quarter, what went well, what didn’t go well, what do we need to adjust, what challenges did we face? The process should be the same for each quarter.

In order to identify whether an objective is green, amber or red you may wish to introduce a simple scoring mechanism against each of the activities within an objective. This could be 1–10 or 1–100 or 0–1.0. Whatever method you use just ensure there are criteria set around how to apply the score for consistency.

Example:

1. Identify benchmark: completed 3 out of 5 gets 0.6 score
2. Repackage: new product line introduced
3. Get into production: target deadline
4. Ship parts: quantity

Score each activity within the objective to get the overall score. If, the overall score is too close to 100% then maybe you are not pushing enough. Too often we see results of 100% presented, and we have to question whether this is true data and if the organisation is pushing themselves. Your goals should be aggressive.

Big Hairy Audacious Goals

Big Hairy Audacious Goal (pronounced bee hag) is a concept developed by Jim Collins in his book “Built to Last” and is a term used to define objectives which, if achieved are not just great but amazing. Dare to push your limits.

If you look at Elon Musk, for example, he is widely ridiculed for setting BHAGs within the Tesla Motor Company and often missing them. Critics seem to forget that he is creating something fantastic that has never been done before and pushing as hard as he can to achieve those BHAGs. Even when he doesn’t quite achieve the targets set, he has still done more than any normal company would have even come close to and sets new records, just not the records he had hoped. There is a common phrase that the biggest risk of all is not taking one and you should remember that when setting your goals and targets.

BHAGs capture the imagination, what if we achieved it? When you achieve the almost impossible then employee engagement will be ignited, people will find it hard to believe that it was achieved, and then they get behind the next BHAG to see if they can repeat the success.

If setting BHAGs is too much for you then set committed goals (must meet) and aspirational (be nice to meet). The committed goals will help keep you on track and if the aspirational goals are achieved then it’s a bonus.

Would we have ever achieved flight if the Wright Brothers had not set a goal to be the first in 1903 with the Wright Flyer!

Conclusion

Objectives are a powerful tool and can transform a business but also accelerate progress as it focuses on the management team. Always ensure that objectives are clear and are communicated throughout the organisation so everyone is aware.

Having a clear plan and monitoring progress will ensure that the objectives are met and do not slip, time and time again we see objectives rolling on for years and the business is not progressing. High achieving organisations typically move fast and are under constant change, don’t get left behind in their dust.

My thanks go to John Doerr and Jim Collins whos books were read in order to populate some of this article. I highly recommend both books mentioned in this article.