Author: Fabiola Eyholzer

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We operate in a complex and highly demanding world with an endless need for innovative and mind-blowing results. Being able to inspire people to greatness is imperative. It takes a strong vision – not just a nice plague on the office wall – but one that people share. This is your anchor for a roadmap with inspiring goals that answer the Who/What/Why (but not the How).

Regardless of your trade or company size, you are likely to operate in a highly demanding, complex, and fast-paced business world. Being able to set meaningful goals and inspire people to greatness is a key competitive advantage. That puts more pressure on Performance Management than ever before.

Unfortunately, years of mismanagement have led to Performance Management systems that are simply uninspiring, and they are a long way from the intended aim of sharing common objectives and channeling all the energy toward achieving those goals. Instead it has become a necessary evil, dreaded by managers and employees alike. And most organizations treat it as an administrative process rather than one critical to business outcome.

Studies show that 50% of managers have difficulty driving accountability; 87% complain their employees are not actively engaged in achievement, and 93% say their people cannot translate a goal to actions. [1]

It is not that employees don’t want to work on their given goals. But often they don’t really understand the goals or what their contribution is. Or they feel their goals are irrelevant. Then, when daily tasks take over, these goals are soon forgotten.

That means we start out with a half-hearted commitment and along the way, goals lose their meaning and relevance when they cross paths with additional client demands, shifting priorities, emerging technologies, new strategic focus – you name it.

Organizations try to respond by setting the right type of goals. But often the effort is in vain. They either set goals that are so abstract and overarching, that people don’t really know what to do with them or the goals get so very specific and detailed that they are outdated by the time you get to work on them. Even companies who have check-in(s) during the performance cycle don’t adjust goals, even though they the validity of the goals must come up when you discuss the progress.

Having said that, people actually do accommodate changing circumstances in their daily activities. But this adaptive behavior somehow changes towards the end of the performance cycle. That is when they feel the need to refocus on the original goals in order to pass their appraisals. Not because these goals are suddenly reasonable again, but because the system obliges them to do so in order to get a good performance review – and hopefully a bonus and a promotion with a salary rise.

That way your employees might achieve excellent level in their appraisals, but at what cost? The organization does not necessarily get the best results and resources might simply be wasted. Just because we have a system in place that measure them on something that seemed like a good idea some months ago.

How can we as organizations ensure people enthusiastically work on the things that matter if our processes encourage them to complete obsolete goals in order to be considered high performers?

Agile enterprises understand the power of inspiring goals and the need to understand, commit, review, and adapt those goals on a regular basis. It is an integral part of their workflow.

But it is not just the ‘what’ that matters. It is the ‘why’ that matters just as much or even more, especially for knowledge workers. And when they understand ‘why’, they are more likely to offer solutions that are innovative and insightful.

Therefore, the way of setting goals must be done in a collaborative way rather than a top-down approach. Don’t get me wrong: It is still the task of leadership to give direction and align overall goals with the corporate roadmap. But there is a transparency, clarity, and interaction that enables a dialogue with the people responsible for delivering value.

But the conversation with the team is not just about communicating goals and getting their buy-in. It also includes clarifying expectations and defining how results will be measured. We discuss their leeway, potential dependencies and risks, and the teams consider their velocity. So that when the teams give their commitment they know exactly what they are getting into and they are confident that they will be able to come through. And that way you ensure your goals are understood and shared and that is when you get real commitment.

But we don’t stop at that. Performance management in an agile enterprise is an ongoing process of communication including clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results.

And their constant companion is a strong corporate vision. I am not talking about a vision that is only a meaningless statement on a nice plague on the office wall – but one that employees understand, relate to and strive to follow in everything they do. And that will guide the results they deliver. But it takes inspiring leadership and a willingness to set your teams up for success.

This article is part of the series “How Lean | Agile Enterprises Push the Reset Button on Performance Management”

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This post was contributed by Fabiola Eyholzer, CEO of Just Leading Solutions, LLC. More information about Fabiola, Agile HR and the services of Just Leading Solutions can be found at www.justleadingsolutions.com.