Goal Setting Important for Everyone

As I travel the country doing consulting and business management seminars, I'm disappointed and concerned at the lack of goal setting exhibited by many kitchen and bath dealers. They may have broad goals: sell more, work less, have more fun, make more money. But for the most part, the dealers I speak with haven't taken the time to write down monthly, yearly or longer-term specific goals for themselves or their employees. Virtually all large businesses do this, and yes, that definitely includes the "big boxes" who every day are cutting into "our" business.

Goals provide direction. If you can see it, you can achieve it. Goals help you see where you're going and how to get there.

As an owner or manager, it's your responsibility to set the overall direction of your business, and to set goals for your business and your employees. You also need to develop and implement the plans to achieve these goals. Your supervisors and employees should be included in this process, both in the goal setting and sharing of rewards when goals are met.

There's a good lesson in the classic story, Alice in Wonderland. Do you remember this exchange between Alice and the Cheshire Cat?

Alice: "Would you tell me please, which way I should go from here?"

CC: "That depends a good deal on where you want to go."

Alice: "I don't much care where."

CC: "Then it doesn't matter which way you go."

Alice: ". . .so long as I get somewhere."

CC: "Oh, you're sure to do that, if you only walk long enough."

Unlike Alice, I believe that kitchen and bath managers do care where they're going. So why don't we use more road maps?'

Benefits of goals
Goals provide direction. To get something done, you must have a definite vision a target to aim for and to guide your efforts and those of your firm. Once you have the vision, you can translate that into goals that will take you where you want to go. Without goals, you're doomed to waste countless hours going nowhere. With goals, you can focus your efforts and the efforts of your staff on only the activities that move you in the direction you want to go.

Goals tell you how far you have gone, and provide milestones along the road to accomplishing your vision. If you set goals for monthly sales, gross profit, expenses and net operating profit, and track each one monthly, you will know where you've been, where you are and how far you have to go.

Goals help make your overall vision attainable. You won't achieve your overall vision in one giant step; rather, you'll need to take a lot of small steps to get there. For example, if one of your goals is to increase your gross profit margin on sales, you probably won't just add 10% more all at once. Rather, you'll need to increase by 1% here, 2% there, etc. Goals enable you to achieve your overall vision by dividing your efforts into smaller, more manageable pieces.

Goals make everyone's role clearer. Setting goals with employees clarifies what the tasks are, who will do them and what is expected from each employee. Goals also give your employees something to strive for. It's a proven fact that people are more motivated when challenged to attain a goal that is beyond their normal level of performance. The average employee works at 60-70% of his or her productivity potential. Our job is to set goals, and rewards, that will motivate them to increase their productivity.

SMART goals'
The following is a great guideline for setting "SMART" goals. Goals should be:

S Specific: When goals are specific, they tell employees exactly what is expected. Because they are specific, you can easily measure your employees' progress toward their completion.

M Measurable: If you don't measure the activity of a goal, you'll never know if the employee is making progress toward the completion of the goal. And, if you can't tell your employees how they're doing, you'll have a hard time keeping them motivated. Both you and they need to know where they've been, where they are and where they're going.

A Attainable: Goals must be realistic and attainable. Yes, they should make the employee stretch a bit to achieve them. But goals that are set either too high or too low will be ignored.

R Relevant: Each individual goal must be a piece that will aid in achieving the overall vision. Sales people will have sales and profit goals, accounting people will have goals related to accounts receivable, accounts payable, monthly financials, etc.

T Time Bound: Goals must have starting points, ending points and fixed duration. Commitment to deadlines helps you and your employees focus efforts on completion/achieving the goal on or before a due date.

SMART goals will lead to smart managers, smart employees and smart businesses.

Simple goals are usually best. The easier your goals are to understand, the more likely your employees will be to achieve them. Goals should be concise (no longer than one sentence), compelling and easy to read and understand. An example might be: "Your goal for 2000 is to increase sales by 7.5%." Next, you should develop a "report card" that shows the monthly sales goal and the results of each month and year-to-date.

In previous columns, I've talked about the importance of job descriptions for every employee, employee handbooks, which spell out the policies and procedures of the business, and regularly scheduled employee performance evaluations. By doing these and setting goals as well, you are saying to the employee, "Here's your job and what's expected of you; here are the guidelines and procedures on how to do it; here are the goals and rewards you can expect if the job is done well and here's how you're progressing." This is the perfect time of year to do your goal setting. Evaluate each employee's job; develop specific individual goals for each, and tie a monthly, quarterly or yearly reward (money works best) to the goal. Try to evaluate what impact meeting these goals would have on your overall business and then set your monthly and yearly company goals.

By setting goals for each employee and regularly evaluating their progress, I believe you will be amazed at the increase in both productivity and motivation.