Goal Setting for CEOs

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Get To High Performance BEST PRACTICES FOR ESTABLISHING GOALS FOR YOUR MANAGEMENT TEAM IN THE NEW YEAR
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    21-Oct-2014
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Setting company goals is something that every CEO does, but do your employees actually care? Goal setting is something that every organization needs to revisit and make sure that employees are aligned in achieving the corporate goals.

Transcript of Goal Setting for CEOs

Page 1: Goal Setting for CEOs

Get To High Performance BEST PRACTICES FOR ESTABLISHING GOALS FOR YOUR MANAGEMENT TEAM IN THE NEW YEAR

Page 2: Goal Setting for CEOs

About the Webinar Speaker o Chairman,  Aus-n  Technology  Council  and  Co-­‐founder  and  Managing  Partner  of  private  equity  firm  Lone  Rock  Technology  Group  

o Developed  and  implemented  an  effec-ve  goals  management  system  as  the  former  CEO  of  two  soHware  companies  

o As  CEO,  led  both  of  those  soHware  companies  to  successful  nine-­‐figure  acquisi-ons  by  two  Fortune  500  companies    

o In  2010,  co-­‐founded  Aus-n-­‐based  Cache  IQ,  a  storage  soHware  company.  NetApp  acquired  it  in  November  2012.  

o Co-­‐founded  network  management  soHware  company  NetQoS  in  1999  and  led  it  to  become  one  of  the  fastest  growing  technology  companies  in  the  U.S.,  with  31  consecu-ve  quarters  of  double-­‐digit  revenue  growth.  CA  Technologies  acquired  the  company  in  2009,  genera-ng  more  than  10x  return  on  capital  to  our  private  equity  investors.  

©  Khorus  2014   2  

Joel  Trammell    CEO,  Khorus  

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Lack  of  Influence  on  the  Organiza4on  

CEO Challenges

©  Khorus  2014   3  

1Lack  of  Timely  Informa4on  to  

Address  Problems  2 Lack  of  Engaged  Employees  3

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Why Quarterly Company Goals?

©  Khorus  2014   4  

Monthly  Goals  

 Short  -meline  to  plan  and  execute  a  cohesive  strategy  

Quarterly  Goals  

Drive  Company  Priori-es  

Adapt  to  Changing  Business  Condi-ons  

Engage  Employees    

Half  Yearly/Annual  Goals  

Not  Fast  enough  to  respond  to  

markets  driven  by  

Lose  sense  of  focus  and  

urgency  with  too  much  slack  

built  in  

2-­‐5  Year  Goals  

 Excellent  for  company  

vision,  poor  for  transla-ng  Strategy  to  opera-ons  

and  execu-on  

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Execution Happens When…

©  Khorus  2014   5  

 Employees  understand  current  strategy  

1

Employees  develop  goals  linked  to  strategy  2

Measurements  are  iden4fied  3Employees  act  with  

purpose   4

Results  are  reviewed  weekly   5

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Do Employees Understand Current Strategy?

“…only   7%   of   employees  today   fully   understand   their  company   business   strategies  and  what  is  expected  of  them  in   order   to   help   achieve  company  goals.”  

-­‐Kaplan  and  Norton  

   

 

©  Khorus  2014   6  

DO  EMPLOYEES  UNDERSTAND  YOUR  CURRENT  STRATEGY?   WHY  DON’T  EMPLOYEES  GET  IT?  

No  direct  -e  between  corporate  goals  and  day  to  day  ac-vi-es  

 

“When   CEO’s   talk   strategy,  70%  of   the   company  does  not  get  it.”    

-­‐  Harvard  Business  Review  

Corporate  Goals  

Employee  Goals  

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Strategy Executed Through Goals Grow  product  revenue  by  40%  in  1Q  2014  

Develop  &  execute  new  campaigns  to  generate  qualified  leads  &  grow  pipeline  by  $10  million    

Close  $2  M  in  new  customer  bookings  in  1Q  2014  

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Sample  Corporate  Goal      

Measures  

●  Launched?  Y/N?  

●  Quality?  ●  Measure  3  

● Priority  Goals  –  new  ini-a-ves  that  specify  the  priori-es  of  the  CEO.  Any  one  department  should  contribute  to  at  most  two  priority  goals.    ◦  “Launch  Product  XYZ”  ◦  “Reduce  Product  Defects  by  27%”  

●  Sustaining  Goals  –  normal  opera-ons  of  the  company  ◦  “Con-nuous  Improvement  in  Opera-onal  Excellence”  

◦  “Deliver  World-­‐Class  Customer  Sa-sfac-on”  

©  Khorus  2014   8  

Setting Corporate Goals

Launch  Product  XYZ  

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● Department  goals  support  the  Corporate  Goals  either  directly  or  indirectly  through  the  hierarchy.  ◦  “Develop  Marke-ng  Plan  to  Support  Product  XYZ  Launch”  

● Departments  may  also  create  goals  that  don’t  link  to  the  Corporate  Goals  ◦  “Increase  Marke-ng  Mee-ngs  Set  by  25%”  

● Any  one  department  should  only  support  a  maximum  of  two  priority  goals  

Sample  Department  Goal      

Measures  

●  #  of  Marke-ng  Qualified  Leads    

●  Measure  2  

●  Measure  3  

 

©  Khorus  2014   9  

Setting Department Goals

Develop  and  Execute  Marke-ng  Plan  to  Support  Product  XYZ  Launch  

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●  Individual  contributors  create  individual  goals  that  link  directly  to  department  or  corporate  goals  

●  Individual  goals  come  out  of  a  collabora-ve  process  between  the  individual  and  their  manager  

Sample  Individual  Goal      

Measures  

●  Quality?  

●  #  of  Downloads  ●  #  of  Conversions  

©  Khorus  2014   10  

Setting Individual Goals

Publish  Whitepaper  to  support  Product  XYZ  launch  

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Determine  exactly  when  the  goal  will  be  completed  

Establish  goals  clearly  -ed  to  higher  level  

goals  

Make  sure  the  goal  can  be  accomplished  

Establish  clear  objec-ve  

measures  to  define  the  

goal  

Make  sure  the  goal  is  clear  

Follow the SMART Goal Framework

©  Khorus  2014   11  

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● Predic-ve  Measures  ◦   Metrics  that  measure  the  ac-vi-es  that  drive  outcome  measures.  A  predic-ve  measure  for  revenue  in  the  quarter  might  be  number  of  qualified  mee-ngs  held.    

◦  Key  role  of  management  is  to  iden-fy  the  predic-ve  measures  for  every  individual  in  the  company  and  facilitate  that  ac-vity.    

● Outcome  Measures  ◦  Metrics  that  focus  on  the  results  at  the  end  of  a  -me  period,  aka  historical  performance.  Example,  revenue  in  the  quarter.    

©  Khorus  2014   12  

Choosing the Proper Measures

   Website  Visitors  

Sales  Mee-ngs/  Demos  

   Closed  Bookings  

Free  Trials  

Predic-ve  Measures  

Outcome  Measure  

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Execution Happens When…

©  Khorus  2014   13  

 Employees  understand  current  strategy  

1

Employees  develop  goals  linked  to  strategy  2

Measurements  are  iden4fied  3Employees  act  with  

purpose   4

Results  are  reviewed  weekly   5

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●  Feedback  needs  to  be  bi-­‐direc-onal.  Individual  contributor  to  management.  Management  to  individual  contributor.    

●  Individual  contributors  must  be  able  to  communicate  their  issues  without  interpreta-on  to  the  top  of  the  organiza-on.    

©  Khorus  2014   14  

Results are Reviewed Weekly

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Complete the Process

Final  status  for  all  goals  is  recorded.    

CEO  summarizes  corporate  goal  results  to  the  en-re  organiza-on.  

©  Khorus  2014   15  

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●  Corporate  Goal  1:  Grow  revenue  by  20%  Y/Y  in  Q2  

●  CEO  Comment:    ◦  Revenue  growth  for  Q2  came  in  at  ~26%.  I  want  to  thank  everyone  involved  for  delivering  another  excellent  performance.    

◦  I  want  to  specifically  note  the  efforts  of  our  western  region  in  signing  four  new  Fortune  500  customers.    

◦  Our  new  XYZ  product  contributed  5  million  in  revenue  in  only  its  2nd  quarter  on  the  market.  It  is  clear  we  are  gaining  market  share  across  all  regions.    

◦  Let’s  con-nue  this  momentum  into  Q3.    

©  Khorus  2014   16  

CEO Goal Review ●  Elements  of  CEO  Commentary:    ◦  Candid  performance  assessment  ◦  Gra-tude  ◦  Commenda-on  ◦  Mo-va-on    

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10  Weeks  

Goal Setting and Execution Timeline

©  Khorus  2014   17  

5  4   6  1   2   3   12  11  10  7   8   9  

Goals  Cascaded  and  Aligned  

QUARTER  1  

1-­‐2  Weeks  

Upda4ng  Goals  throughout    the  Quarter  

1  Week  

Next  Quarter  goals  discussions  begin  

2  Weeks  

Next  Quarter  goals  discussions  begin  

14  13  

QUARTER  2  

16  15  

2  Weeks  

Complete  and  Submit  Results  

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þ Make  the  goals  posi-ve  

þ Include  everyone  

þ Build  a  rhythm  

þ Insure  closure  

þ Train  your  managers  

þ Encourage  input  from  the  botom  

þ Keep  it  simple  

ý Unrealis-c  targets  ý Try  to  capture  every  ac-vity  

©  Khorus  2014   18  

Do’s and Don’ts

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● 31  Consecu-ve  Quarters  of  Double  Digit  Y/Y  Growth  

● 10X  return  for  investors  ● <3%  Unwanted  Employee  Turnover  

©  Khorus  2014   19  

Case Studies Was acquired by In 2009

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Conclusion

©  Khorus  2014   20  

A  properly  executed  goal  system  will  drive  the  following  benefits:  

Allow  the  leader  to  drive  the  organiza4on  instead  of  

each  group  ac4ng  individually  

1

Last  minute  surprises  will  be  drama4cally  reduced  

2

Employees  will  be  much  more  engaged  as  they  understand  how  they  

contribute  directly  to  the  goals  of  the  company  

3

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Contact the Speaker ●  Joel  Trammell  

*   :  [email protected]      !  :  htp://khorus.com              :  @TheAmericanCEO              :  htp://theamericanceo.com              :  htp://www.linkedin.com/in/joeltrammell              :  htp://www.forbes.com/sites/joeltrammell/  

Joel  Trammell