Beyond SMART: Aligning goals to your company's business model

4 mins

Having trouble figuring out what your performance goals should be? 

Learn your company’s business model.

Setting goals is a great habit in general.  Goals help motivate us, and they can fundamentally drive our own individual improvement and performance just as much as they can help the companies and organizations we work for perform. Studies by Edwin A. Locke and his colleagues, most notably Gary Latham, have shown that more specific and ambitious goals lead to more performance improvement than easy or general goals.

So goals are good, ambitious goals are even better - got it, all good, so let’s make some goals.  Super easy, right? Just come up with a novel, ambitious goal and do your thing, how hard can it be? 

Turns out it’s not that simple.  

We’ve been trying to crack the code on extensible and useful goal structures for a long time, and there are a few approaches you may have even encountered.  One that’s quite popular that we’ve seen around for a long (in terms of management practices) time is the SMART goal, which tries to give you a helpful framework for forming your goals, and I do genuinely believe it’s an effective format, but going from the concept of the goal setting framework to an actual goal that resonates with you, can be a super frustrating exercise to some. 

Something I’ve both experienced myself and have observed in lots of other folks throughout my professional career is that when it comes time to set performance goals for a month / quarter / year, there are this sort phenomena where unless your job is fundamentally very metric driven (sales for example), it can be easy to stall out when faced with the task of articulating goals, particularly in the SMART format (Specific, Measurable, Achievable, Relevant, Timebound).  If your leader doesn’t provide you with crisp guidance on what you should be working on and why, it can feel like a real burden to come up with these. 

So what do you do when you get stuck? 

My coaching around this is to start by asking questions, specifically ask questions about the business model of the organization as it relates to you.  Sometimes it may be many layers deep, but connecting the dots between the work you do in your role and how it ultimately drives a financial metric that’s meaningful to the company is the fundamental element you need in order to get to the “why” behind what you’re doing.  

I’m not talking about some abstraction of “why” or some emotional motivation of “why”, I’m talking about the fundamental mathematical “why” behind your role and its design to drive the performance of the company.  

The better you understand this, the better you can tune your goals, your tactics, your growth strategy, your communication, all the things that present you as a professional to your team and your organization.  Knowing the fundamentals of the business is a singularly important part of finding professional success in your professional career, whether it’s a company you’re working for or a company of one. 

That “why” drives everything.  

If you don’t know why your company has you doing the work you’re doing - don’t immediately panic and it’s not necessarily a sign that you’re on some forsaken voyage of a sinking ship. Companies are complex, and depending on their structure, the relative business acumen of your leaders, and the very culture of the company, it simply may be opaque not out of malice but out of sheer ignorance. This is a very Hanlon’s Razor view, a view I take quite often probably because I’m naturally an optimist, but I do think it’s a more probable explanation when you’re lost in terms of what your work really contributes to a large organization.  

The questions can be as simple as “how does my work contribute to the revenue of the company?”, but it really does need to seek to connect with the financial performance of the company.  

Of course, there are limits to this - perhaps you’re charged with driving some operational efficiency, maintenance, or other elements of operations that are abstracted from generating revenue.  Maybe you’re in an area like HR that at times is viewed explicitly as a cost center (though we’d argue that the line between company performance and HR-centric metrics such as employee retention is becoming clearer and clearer).  

You may not be able to get a clear picture immediately just from one question, but the point is to dig until you can.  No matter how abstracted you are from the fundamental revenue generation mechanism of the company, it’s there, I promise you it’s there somehow and some way - and if it’s not, making it so is that much more of an opportunity to further increase your impact to the business and drive your success as a professional.  If you don’t get a clear answer from your boss, look to your network, look to your network of peers, dig into materials within your company that are accessible to you, do whatever you can to uncover the clear connection between your role in the organization and the business model.  

Relevance is the key to creating goals

Once you have this, coming back to your goal is much, much simpler.  The “R” in the SMART goal is done, it’s obviously relevant, and relevance resonates, this will make it that much easier to hit the other pieces. You’ll now have the context that drives the Timebound portion, a better sense of what’s Achievable, as well as a clear signal on how to Measure your progress towards the goal.  All that’s left is to try and get Specific about the description of the goal, but this is by far the easiest part of the exercise once the other factors have fallen into place.  

I’m of the opinion that a goal that simply meets the MART criteria will inherently be sufficiently specific, but the folks that came up with it needed that S to be meaningful so the acronyms really stuck.  

Regardless of the goal framework you use, I think the argument for fundamentally pushing yourself to understand the business model of the company you’re working for is the missing piece of the puzzle for going from framework to action successfully. I’d encourage you to consider this as you either develop yourself professionally or if you’re one of those awesome learning and development folks we work with all the time at Rhabit, think about how you can weave this content into experiences for your employees such as onboarding and continuous training experiences through their careers with your organization.  

Understanding the fundamental business model can also be leveraged as a powerful context when you’re doing things such as designing a competency model or figuring out what behaviors you should be providing employees feedback on that help foster a deeper understanding of the business within the culture of the organization.

Are you ready to align your culture with your company's strategy? Schedule time to meet with a Rhabit expert to learn how companies like Marken and Kontoor are creating aligned cultures.

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