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

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.  

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Joel  Trammell    CEO,  Khorus  

Lack  of  Influence  on  the  Organiza4on  

CEO Challenges

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1Lack  of  Timely  Informa4on  to  

Address  Problems  2 Lack  of  Engaged  Employees  3

Why Quarterly Company Goals?

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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  

Execution Happens When…

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 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

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  

   

 

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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  

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  

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”  

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Setting Corporate Goals

Launch  Product  XYZ  

● 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  

 

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Setting Department Goals

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

●  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  

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Setting Individual Goals

Publish  Whitepaper  to  support  Product  XYZ  launch  

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

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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.    

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Choosing the Proper Measures

   Website  Visitors  

Sales  Mee-ngs/  Demos  

   Closed  Bookings  

Free  Trials  

Predic-ve  Measures  

Outcome  Measure  

Execution Happens When…

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 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

●  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.    

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Results are Reviewed Weekly

Complete the Process

Final  status  for  all  goals  is  recorded.    

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

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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.    

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

10  Weeks  

Goal Setting and Execution Timeline

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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  

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  

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Do’s and Don’ts

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

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

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Case Studies Was acquired by In 2009

Conclusion

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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

Contact the Speaker ●  Joel  Trammell  

*   :  joel@khorus.com      !  :  htp://khorus.com              :  @TheAmericanCEO              :  htp://theamericanceo.com              :  htp://www.linkedin.com/in/joeltrammell              :  htp://www.forbes.com/sites/joeltrammell/  

Joel  Trammell