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OKR Stretch Goals – How Aggressive Should You Be?
OKR Stretch Goals – How Aggressive Should You Be?
By Paul Benevich
New to OKRs? Click Here
One of the many aspects of the OKR Methodology is to create stretch goals that will aggressively push your team on a few key areas of organizational focus. With that said, what constitutes a stretch goal and how aggressive should you be?
These two questions are top of mind each time leadership assigns the corporate focus for the organization and individual employees create their own OKRs.
When first introducing OKRs
When introducing the idea of stretch goals to an organization and its workforce, I often suggest creating a scale from minimally acceptable to a desired aggressive stretch goal. For example, the company might set a sales objective and indicate, “Achieve a minimum of 10% YOY sales growth with the desired goal of 20%. The 10% is a more conservative financial target provided to the investors and a target that must be met, and the 20% goal is the internal leadership’s, “this is where we envision we would like to be.” The individual sales team employees might use a similar scale when setting their OKRs based on the corporate sales objective.
Red, yellow, green
When setting Objectives and Key Results, you might use a red, yellow, and green scorecard. In the sales example above, you might say, “10-13% YOY growth is red and a clear miss, 14-16% is yellow and near miss and anything above 17% is green and considered achieved.
A normal end-of-the-period report card will often have some red, yellow, and green marks. If you are achieving “green” on every goal, then this might indicate you are not setting aggressive enough goals. If you are hitting “red” on too many goals, then your goals might be too aggressive.
Creating stretch goals for your company will improve the more times you go through this process. It is important that you review your scorecard monthly, quarterly, and yearly and assess your progress vs. your established OKRs. Tracking progress and reviewing and analyzing your quarterly scorecard will help you when setting your next set of OKRs.
The more iterations of this process, the better your organization and individual employees will become at it.
OKRs – Separate from Bonus and employee reviews
A major challenge when introducing OKRs to a workforce is the idea of setting stretch goals and then making them public. Many of us are conditioned to set goals that can be achieved or exceeded. So often we sandbag our goals. This is where both leadership and employees have to be retrained. It is also important that OKRs are separated from both bonus schedules and employee reviews.
If either leadership or employees feel as if their success on OKRs will impact their employee reviews or bonuses, then it will be very difficult for everyone to create stretch goals where they might not achieve 100%.
Don’t have to be perfect
There is no paint-by-numbers kit when setting your OKRs. You just need to start the process, be committed to it, track your progress, and then analyze and learn from it. Each time you go through the process of creating new OKRs, everyone in the organization will improve. You don’t have to get it perfect for OKRs to pay huge dividends within your organization.
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If your company is serious about growth and or improved profitability, then please reach out to me.
For those new to OKRs, this is a very brief primer about Objectives & Key Results (OKRs). Note: For a much deeper introduction to OKRs I recommend you read, “Measure What Matters” by John Doerr. What are OKRs? OKRs stand for Objectives and Key Results. It is a methodology used by many leading companies for improving production and efficiency within their organizations. As Andy Grove (former CEO of Intel and the father of OKRs) stated: “There are so many people working so hard and achieving so little.” OKRs were designed to help solve this problem. Who uses OKRs? Intel is where OKRs were born in the 1960s. Since then, top-performing companies in various industries have successfully implemented OKRs to help achieve phenomenal success. Successful companies using OKRs include Amazon, Dell, Dropbox, Facebook, Microsoft, Google, GoPro, LinkedIn, Oracle, Spotify, Uber, Slack, Siemens, Panasonic, Netflix, LG, GE, Salesforce, Viacom, and Twitter. Benefits of OKRs They: help the company FOCUS and COMMIT to priorities, help ensure that every employee is also FOCUSED and COMMITTED to the same corporate priorities, help ensure corporate-wide accountability from the CEO on down throughout the organization, and are designed to push everyone in the organization to do more than what they thought was possible. What are Objectives? The Objectives (the “O” in OKR) simply indicate “WHAT IS TO BE ACHIEVED.” As John Doerr indicates in his book, Measure What Matters , “By definition, Objectives are significant, concrete, action-oriented and (Ideally) inspirational. When properly designed and deployed, they’re a vaccine against fuzzy thinking – and fuzzy execution.” Companies and employees generally focus on 1-3 objectives in a given period. It is important to remember that each time you commit to an objective, you forfeit your chance to commit to something else. What are key results? Key Results (the “KR” in OKR) tell you HOW you are going to get to the OBJECTIVE. As John Doerr writes in Measure What Matters , “Effective KRs are specific and time-bound, aggressive yet realistic.” “Most of all, they are measurable and verifiable; it’s not a key result unless it has a number. You either meet a key result’s requirements or you don’t – there is no gray area.“ Companies and employees generally have between 3-5 Key Results per Objective. Objectives & Key Results – important notes: It is important to understand that if all the Key Results are met, then it should achieve the desired objective. All Objectives and Key Results should be MEASURABLE and TIME BOUND . Setting a specific measurable goal with a deadline has proven to be effective at driving progress. Transparency OKRs are intended to be transparent . That means all members of the company from the CEO on down have OKRs that can be viewed by any other department and employee along with their progress. Transparency tears down the department silos and pushes employees to become accountable team members within the organization. Furthermore, transparency allows for other individuals or departments to assist when needed. OKRs are not a performance review OKRs are not a performance review ; they are a way for each employee to gauge how well they are performing in a given period. You want employees to push themselves and set stretch goals that might not be achieved 100%. For this reason, it is best to separate OKRs from bonuses or performance reviews. Who should use OKRs? OKRs are designed to be simple, flexible, and adaptable to meet the specific needs of each company. They are designed to be effective in startups or Fortune 500 companies. Furthermore, they are industry agnostic. --------------------------------------- If your company is serious about growth and or improved profitability, then please reach out to me.
I get it… you’re all excited to try these OKRs that you have heard so much about. That’s great and congratulations. New to OKRs? Click Here Start small and grow My one caution is that it is easier to adopt this new OKR culture and mentality by starting in one division or department and slowly growing it within your organization rather than a full shock-and-awe throughout the entire company. You want this to stick and become part of your company fabric vs. a passing trend. Think of it like this… which one works better over the long run – a crash diet of starvation over two weeks or a steady and consistent change in how and what you eat? This is what I preach when working with companies to implement OKRs. I’ve had much more success working with one department initially, getting them used to the terminology and the process of top-down, bottom-up goal-setting vs. trying to implement them company-wide. Many of us are somewhat hesitant to change and it is easier to win-over employees in a single department one at a time vs. trying to win over the entire corporate staff all at once. Defining OKRs takes practice Implementing OKRs is more of an art form than a science . It takes time for the top management to agree on corporate key objectives and often, they don’t necessarily nail it the first pass. This is ok and quite common. Setting corporate OKRs is a skill set and a new way of thinking about corporate objectives. Also, setting the right corporate objectives impacts every employee’s individual OKRs throughout the organization. To mitigate wasting your employees' time, you want to be confident in your corporate goals. By initially implementing it in one department, it removes some pressure from having to perfect the corporate OKRs the first time around. It enables leadership to pivot or refine corporate OKRs, mitigating impact throughout the organization. As leadership gets better and more confident at setting corporate OKRs, then, it will be easier to scale this methodology throughout the organization. I guarantee you that your corporate OKRs in year two will be much more defined and focused than in year one. For one reason, your team will have been thinking about and discussing these objectives for an entire year. If you’re implementing the OKR methodology correctly, you will be referencing your corporate OKRs in every weekly meeting; so you will have a full 52 weeks of thought behind your year-two goals. I’m not suggesting you have to wait an entire year to scale this throughout your organization. I would recommend that you at least give it 1-2 quarters before a much larger implementation. ----------------------------- If your company is serious about growth and or improved profitability, then please reach out to me.
New to OKRs? Click Here When introducing OKRs into your organization, it is best to keep the process simple. Small incremental changes in the way your company focuses can have a significant impact in a short period. When implementing OKRs into your organization, you can make it as simple or complex as your needs. My suggestion, when introducing OKRs into a new organization, is to introduce a very simple version of the framework. This would include: Define the core 1-3 areas of focus for your company in the next 3-6-12 months; Work with leadership to have each leader create their own individual OKRs that align with the OKRs of the organization; Introduce OKRs to only one department at first and work with them to align their individual OKRs with the corporate OKRs that apply to them; and Create a mechanism for each employee involved in this initial rollout that requires them to check in with their manager to review their OKRs every week or every other week. Some OKR help Although the above may sound somewhat simple, there is a learning process when you are new to OKRs. It is certainly helpful to find a reasonably-priced consultant that can leverage their OKR experience to assist in the implementation and help improve the chances of success and long-term adoption within the organization. For a free consultation, click here . Add complexity as you go As OKRs become the fabric of your culture, then you can begin to add complexity. It is important to remember that the bare-bones framework of OKRs can have a significant impact on your company’s focus and productivity. You certainly don’t need a complicated OKR software platform early in the process to be positively impacted by OKRs. I have many clients making a significant leap in growth just by utilizing Google Sheets and updating both Corporate and Individual OKRs on those sheets. As your company continues to grow or you start to implement OKRs on a much larger scale within a larger organization, those OKR platforms can certainly make the process of tracking OKRs much easier, but sometimes it is best to start simple and grow in complexity. __________________________ If your company is serious about growth and or improved profitability, then please reach out to me.
It is highly unlikely that you can successfully implement OKRs within your organization without top leadership’s direct involvement and commitment to the OKR process. As I mentioned in a previous blog, “ Implementation of OKRs is a Cultural Change; Start Small and Grow ,” the process of implementing OKRs is establishing a cultural change in your organization. This will not happen without your top leadership buying into the OKR methodology and process and being directly involved in its implementation. New to OKRs? Click Here Establishing strong corporate OKRs Choosing the right corporate focus is paramount and this is the responsibility of the top leadership. If leadership misses on the corporate objectives, the entire organization is now moving the boat in the wrong direction by aligning their individual objectives to the wrong corporate objectives. Establishing strong corporate objectives might sound simple, but it isn’t. This process often takes time, especially when OKRs are new to your organization. This is when leadership discovers there are a lot of competing agendas within the leadership team. Choosing 1, 2, or 3 key areas of focus (Objectives) is never easy and requires a lot of discussion with leadership challenging one another. When you lock in your corporate objectives, you are putting a stake in the ground that screams this is our company FOCUS and we are COMMITTED to this focus. You are letting the entire workforce understand that, when new opportunities present themselves, the company will be determining if those opportunities are part of the FOCUS or outside the FOCUS. If outside the FOCUS, they are put on hold. The consistent mantra of corporate objectives Consistent and steady communication of the corporate objectives is crucial. Leadership must communicate and reference the corporate objectives whenever addressing their teams on a daily and weekly basis. If employees view leadership as committed to corporate OKRs, then they will follow suit. Leadership will know when OKRs are becoming the fabric of the organization when employees start to reference the corporate OKRs regularly. As John Doerr mentioned in “ Measure What Matters , ” when you begin to think you are over-communicating OKRs to your team, they are now just beginning to hear you. Direct involvement in 1-on-1 meetings As part of improving the chances of long-term OKR adoption in your organization, it is customary to have weekly or biweekly OKR check-in meetings with all employees. Top leadership’s involvement in employee 1-on-1 check-in meetings will certainly help with OKR adoption throughout your organization. Leadership’s involvement in these check-in meetings for the first month or two and then the unannounced pop-in will keep your teams engaged. No employee wants to be unprepared in front of top company leadership. OKR commitment will pay dividends Later OKRs’ implementation and long-term adoption require the commitment of leadership. Without this commitment, the success rate diminishes significantly. Leadership's commitment to OKRs early will pay dividends later as employees understand and align their individual efforts and objectives with corporate objectives. ---------------------------------------- If your company is serious about growth and or improved profitability, then please reach out to me.
New to OKRs? Click Here As part of your OKR implementation rollout, it is essential to have a strategy around introducing OKRs to your workforce that will improve your chances of launching it on a positive note. We all know that when you introduce something new, there will be some resistance to change. There always is, so this is just part of the process and don’t let it discourage you. Leadership commitment A critical point to communicate to the team is that OKR long-term adoption is an important focus for leadership and everyone including leadership will be participating in creating their Individual Objectives and Key Results that align with the Corporate Objectives and Key Results. Everyone in the company will be involved and accountable from the CEO on down. If the workforce sees that leadership has accountability and it will be tracked and visible to the rest of the team, this sends a powerful message to the entire workforce regarding the company’s commitment to OKRs. Introducing OKRs Below is a process I have used to introduce the OKR framework AND introduce the agreed-upon Corporate OKRs to the workforce. Introducing OKRs to your company can be presented in smaller departmental meetings or via a companywide meeting. Generally, introducing OKRs to a workforce team or teams can be done in a single one-hour meeting with four areas of discussion. Section #1: In this section of the team presentation, it is critical to provide some background on OKRs and a discussion of what the company hopes to accomplish with OKRs. I propose that you touch on the following topics: Commitment to OKRs: Discuss the company’s commitment to OKRs and explain how this framework will establish how the company communicates its key focus and how the company will measure success. What are OKRs: Provide the team with a definition of Objectives and Key Results. What are they and how do you leverage this framework to improve company success? History and track record of OKRs: Provide some history around OKRs and discuss a list of successful well-known companies that have leveraged OKRs to help them succeed. Goals of OKR implementation: Provide the workforce with an overview of what the company wishes to accomplish by implementing OKRs. Section #2: Once the employees have a better understanding of OKRs and what the company wants to accomplish by implementation, it is time to unveil the Corporate OKRs that are set by the leadership team. Section #3: Following the unveiling of the Corporate OKRs, it is now time to explain that everyone will be aligning their Individual OKRs with that of the Corporate OKRs. In this section, it is critical to provide the team audience with guidelines to assist in creating their Individual OKRs. It is helpful for the leadership team to have examples of their Individual OKRs to show to the team. This serves two purposes: 1) Provides the team with real-life examples of Individual OKRs emphasizing that all OKRs must be measurable, trackable, and have a due date; and 2) Reinforces leadership's commitment to OKRs since their OKRs are transparent, measurable, trackable and have a due-date. During this section, it is helpful to set some deadlines for completing and submitting OKRs to their team leaders. Section #4: The final discussion topic is letting the team know about individual check-ins that generally happen weekly or bi-weekly and that leadership expects that everyone’s Individual OKRs are updated before those meetings. During this OKR introduction meeting, it is helpful to assign specific dates/times for these check-ins. To help improve participation, I suggest that leadership inform team employees that they will be participating in check-ins. This reinforces leadership’s commitment to OKR implementation and keeps employees motivated regarding updating their OKR progress before the check-in meetings. Summary Having a well-thought-out plan for introducing OKRs to your workforce will help the implementation launch on a positive note and help improve the chances of long-term adoption. ________________________ If your company is serious about growth and or improved profitability, then please reach out to me.
New to OKRs, Click Here. If you want to find an instructional book on Objectives and Key Results (OKRs) that will define exactly how to implement them in your organization, you will be disappointed. The brilliance of the OKR Framework is that it is open-ended and flexible allowing all organizations with their vast nuances, cultures, sizes, and industries to benefit from them. For this reason, it’s not practical to create a paint-by-number, “How to” book on OKRs. I have worked with numerous organizations that have benefited from OKRs. Each organization’s relationship with OKRs is completely different based on the organization's size, culture, industry, and growth trajectory. In my opinion, the most important element of successfully implementing OKRs into an organization are: what to focus on, what to measure, and how to track OKR progress. What to focus on Universally this is almost always a challenge. Trying to choose 1-3 core areas of focus from the many competing agendas of the leadership team is never easy. A company and or individual will have difficulty successfully attending to more than three initiatives at any given time. The question that companies face is what 1-3 areas should the entire weight of the organization focus on within a given period? When you commit to one area of focus, you also have to set aside another. These are difficult decisions. What to measure Determining what to measure is critical. Just being aware of WHAT your company needs to focus on isn’t enough. You then need to establish the Objectives and Key Results in a way that forces you to measure your success. As I mentioned in my recent article, “ OKRs Must be Measurable and Time-Bound ,” the first step in measuring OKR progress is to specifically know where you are starting from. It’s not uncommon when initiating OKRs to propose a Corporate or Employee Objective and discover you haven’t tracked a certain metric. When this happens, you must create a plan to benchmark the metric so you can establish a starting measurement and track progress. How to track OKR progress When you determine what you want to focus on and what you need to measure , then you must put in place a mechanism for tracking progress along the way. By tracking OKRs progress along the way, you now know how you are performing at any given time in the life of that Objective or Key Result. For more on tracking OKR progress, click here . Creating strong Corporate and Individual OKRs Every Corporate or Individual Objective or Key Result must: 1) be measurable with a quantifiable starting point and ending point; 2) be trackable; and 3) be time-bound. If you omit any of these three components, then the Objective or Key Result will be weak. In my experience, both leadership and employees perform at a much higher level when they know exactly where the company wants to go and how their contributions help the company achieve those goals. Consistency Implementing OKRs into your organization is forcing a cultural change. It might be uncomfortable at first, but within 6-12 months, it often morphs into the fabric of your new culture leaving the old culture behind. To help improve the chances of long-term adoption, the top leadership has to be consistent with their commitment to and communication of OKRs. Insisting that all employees, including CEO and leadership, participate in weekly or bi-weekly check-ins is imperative. Employees will watch leadership and if leadership is committed, they will most likely follow. ______________________________ If your company is serious about growth and or improved profitability, then please reach out to me.
Corporate and Individual employee Objectives and Key Results should be both MEASURABLE and TIME BOUND to be effective. If you don’t know where you are and where you’re going, it’s virtually impossible to track your progress. Furthermore, if you don’t have a due date, then you lack the urgency to accomplish a goal, and time just slips away and days turn into weeks and weeks turn into months with nothing being accomplished. New to OKRs? Click Here Measurable OKRs The first step in measuring OKR progress is to specifically know where you are starting from. It’s not uncommon when initiating OKRs to start to set Corporate or Employee Objectives and discover you haven’t tracked a certain metric, so, it is very difficult to identify a starting point. That is normal, but one of your first objectives for that Key Result would be to benchmark that metric so you can track future progress. The second step to measuring OKRs is to have a quantifiable goal to be achieved. How will anyone know if they achieved the OKR or not? The only way is to know quantifiably where you started and where you want to go. The third step to measuring OKRs is to put in place a mechanism for tracking progress along the way. By tracking OKR progress, the company and employees will become better at setting future OKRs. By tracking OKRs progress along the way, you know how you are performing at any given time in the life of that Objective or Key Result. Since OKRs are transparent throughout the company, if certain OKRs are lagging, it fosters team collaboration and discussion that can significantly assist in improving the chances of reaching that Objective or Key Result. Time-bound OKRs Having an accomplished-by-date is so very critical to every OKR. Adding urgency forces focus and action. If OKRs are not time-bound, they are forgotten; but when you set a due date, that Objective or Key Result becomes a priority. In conclusion Every Corporate or employee Objective or Key Result must: 1) be measurable with a quantifiable starting point and ending point; 2) be trackable; and 3) be time-bound. If you omit any of these three components, then the Objective or Key Result is weak. In my experience, both leadership and employees perform at a much higher level when they know exactly where the company wants to go and how their contributions help the company achieve those goals. Furthermore, employees are so much more engaged when they can track how their progress is contributing to the company achieving its objectives. This, undoubtedly, elicits a sense of meaning to their work which is paramount to job satisfaction. ________________________ If your company is serious about growth and or improved profitability, then please reach out to me.
New to OKRs? Click Here The first step in implementing OKRs for your company is determining and committing to your organization’s top 1-3 areas of focus. There are two aspects of establishing your company’s focus: 1) Narrowing your focus to 1-3 objectives, and 2) Taking the appropriate time and effort to make sure you have the right focus. Narrow your focus Whether you’re an organization or an individual, it is very difficult to focus on more than three priorities at any given time. Studies have shown that when there are too many areas of focus, you significantly dilute the focus in all areas, and the chance of achieving any of the goals is diminished. Please remember, when you decide to commit and put the full weight of the organization behind one area of focus, then you are often doing it at the expense of another area. These are difficult discussions. The focus becomes clear with discussion and time The first time many of my clients initiate the OKR framework, it often takes 4-8 weeks to lock down 1-3 areas of focus. When I start my consultation with the leadership team, it is not uncommon to have numerous competing agendas. This is very normal. It is easy to create a long list of priorities, but when you start the process of narrowing down the list and then realize you are choosing one area of focus resulting in the loss of another, this requires team discussions, often very passionate discussions. Time to percolate A normal process is starting with a strategy session to get the leadership team thinking about different possible areas of focus, then going through your day and week, then having another discussion, and wash and repeat until you arrive at a leadership consensus. You need time for ideas discussed during the strategy sessions to percolate and sift through everyone’s thoughts as they go about their day, week, and month. It is amazing that at a certain point in this process, the leadership team arrives at their ah-ha moment. Everyone just seems to arrive at the same place at the same time. This is when you know you have your true North Star, at least for the moment. This process has its own life and you must let it occur naturally. Leadership often misses on their areas of key focus when they attempt to force and put unnatural deadlines on the process. And, if your company’s Corporate Objectives are off, then the whole organization is aligned to the wrong Corporate Objectives. It’s like setting sail with the wrong coordinates. Don’t get me wrong, it’s not as if you’re unable to pivot when you discover your focus needs to change, but your Corporate Focus is your North Star and you want to really think about what areas you want to commit to and put the entire weight of the organization behind it. OKRs – living and breathing framework Remember the OKR framework is meant to be flexible and is a living set of goals. This means that when OKRs have outlived their usefulness, they are terminated and new ones replace them. I recommend you revisit your Corporate and Individual OKRs on a quarterly or trimester basis. _____________ If your company is serious about growth and or improved profitability, then please reach out to me.
A pillar of OKR's success is TRANSPARENCY. Transparency of Corporate and Individual OKRs is pertinent to driving successful OKR implementation within a company. Let’s face it, public goals are much more likely to be attained than privately held goals. Once you declare to everyone that you will do something, you now have your reputation on the line. Furthermore, when your goal progress is now made public, the incentive to achieve your goals is much greater. New to OKRs? Click Here Corporate OKR transparency Transparency means that everyone within the company is very aware of the Corporate Objectives and Key Results. Corporate OKRs must be front and center in weekly meetings and are tracked throughout the company. This is an ongoing gauge of how well the company as a whole is meeting the desired objectives and is focused within the organization. Having transparent corporate OKRs that are continually discussed and tracked on a daily and weekly basis provides the entire organization with a north star that guides its direction. When the focus of the company is clearly defined, you have the entire weight of the organization behind that focus. With a transparent and committed focus, the company has created a collective consciousness which naturally causes a gravitational pull towards those defined goals. Individual OKR transparency Just as important as having Corporate OKR transparency, it is equally important that everyone’s Individual OKRs are transparent throughout the organization. I mean everyone’s, including the CEO and top company leaders. Having the top leaders of the organization publish their Individual OKRs as well as their progress will reinforce the commitment to OKRs throughout the company and increase the chances of successful OKR implementation and long-term adoption. Removing silos OKR transparency naturally removes company silos. It removes the problem of one department not knowing what the other departments are doing. Transparency forces interdepartmental collaboration as all departments are focused on the same Corporate OKRs. For example, the Corporate OKRs will illuminate the interdependency between Sales, Marketing, and Production. The Production Department might be expected to hit a certain monthly output goal and that goal might then directly impact the Sales Department goals, but reaching sales targets might be dependent on Marketing Department initiatives. Transparency of each department's OKRs and progress will naturally open communication between all three departments since they are so interdependent on achieving the targeted objectives. Removing redundancy In most organizations, there is quite a bit of overlap with employees working on the same thing without each other knowing it or ambiguity regarding who owns what goals. Making everyone’s OKRs available for everyone else to view removes the inefficiencies of redundant and ambiguous goals. When working on individual OKRs it is very common to hear, “You’re working on that, I thought I was responsible for that?” The process of defining individual OKRs and making them public will remove ambiguity regarding who is responsible for what and help mitigate redundancy throughout your organization. Meritocracy flourishes With open and transparent OKRs, it will be easy for everyone to see who is contributing to the defined focus of the company. No one can hide in this environment and those that contribute most will naturally become apparent. Transparency will drive company success Studies have shown that only about 7% of employees know their company’s goals and what is expected of them. The OKR format with open transparency removes this problem. Leadership sets the focus for the company and then the workforce aligns with that focus. The entire organization can then track OKR progress at the Corporate or Individual level. Having everyone’s goals transparent removes silos and redundancy, improves motivation to achieve results, and drives corporate meritocracy. _____________________ If your company is serious about growth and or improved profitability, then please reach out to me.
New to OKRs? Click Here Most of us have experienced an organization that creates goals in departmental silos. Yes, these departmental goals were crafted with the goals of the organization, but how many times have we experienced the frustration of trying to accomplish objectives when there is little to no interdepartmental communication? Perhaps this example sounds familiar: A company sets its quarterly and yearly goals and the Business Development, Marketing, and Sales departments return to their departmental silos and create their goals based on the corporate goals that were just dictated to them. Business Development has its goal to launch four new products, Marketing has its goal to launch three new promos each month and 36 for the year, and Sales Department goals were established based on last year’s numbers, tying them to sales team commissions. Great, now the individual departments have aligned their goals to the corporate goals and everyone is ready to march forward within their perfectly siloed worlds. The Business Development department is set to reach its goals in the first six months and then exceed its goals by at least two new product launches in the second half of the year. They are going to crush it. Marketing is aggressively putting its calendar of promotions together for the next four months with some very creative incentives. Sales lay out their individual and team sales goals based on last year’s sales and current line of products. So now, we have three departments tackling their departmental goals with gusto. Each department says, “Everyone move out of the way – we have our plan and we are ready for a great year.” So how does this play out? Business Development’s aggressive push to achieve its goal of four new product launches within the first six months means the sales team will have a new product to introduce every six weeks. Marketing wasn’t aware that Business Development was going to launch so aggressively, and they had their own agendas for promotions based on the existing line of products with little consideration for new product marketing and promotional initiatives. Sales has set their product sales goals based on how they did last year and hope that the marketing team will provide some promotions and incentives that help them close deals and allow them to secure their commissions. Also, Sales has just created a separate sales goal bucket called “new products” and blindly set some sales projections. What started as some well-thought-out company goals and high hopes morphed into dysfunctional chaos very quickly. Why? There was no inter-departmental sharing of objectives. For alignment within an organization to work, there MUST be interdepartmental communication of objectives and focus. To achieve corporate goals, there are way too many interdepartmental dependencies to allow independent goals to be set in departmental silos. Part of strong planning and alignment requires there to be cross-departmental discussion regarding each department’s objectives. Each department must be aware of dependencies on another department. Too often, there are critical assumptions made regarding what other departments can do and when they can do it, without first checking in with that department. Highly aligned organizations know the importance of communicating interdepartmental dependencies. Sales team Based on the example above, the sales team needs to know which products Corporate would like them to focus on. It is impossible to focus on 10-15 products equally, so direction is needed. Once Corporate has defined the sales team’s focus, then it needs to be coordinated with Marketing. Without coordinating with Marketing, the sales team is just hoping they receive timely promotions that have the right incentives to help the sales person close AND do not cannibalize their future business. Furthermore, it would be beneficial for Sales to have some input into when new products will be launched. Launching a new product at the end of a quarter when the sales team is trying to close deals will be challenging to say the least. Also, the sales team is in the trenches and should be interfacing with Marketing to help them better understand what promotions might be best to assist with the launch. There has to be some tradeoff between the growth of existing products and the growth of new products, since introducing new products often takes more resources and time. Lastly, Sales should be in constant contact with Business Development since they are often the eyes and ears of the marketplace. They will certainly have input into what the market is asking for and this should be communicated regularly with the Business Development team. Marketing team Based on the above example, Marketing also needs to know which products Corporate would like them to focus on. The assumption is that Sales and Marketing would have the same focus. With that said, understanding the sales team’s projections is paramount so Marketing can create promotions that assist the sales team in reaching its targets as well as communicating with sales team members to help them craft sales promotions and incentives that are meaningful to customers and don’t cannibalize future business. Marketing also needs to coordinate and have input into new product launches. Marketing campaigns need to highly corollate with each launch. Business Development Based on the above example, Business Development needs corporate direction regarding which products to evaluate and introduce to the business. Business Development should also be interviewing sales team members to better understand which products might best fill a market need. Also, new product launches have to be highly coordinated with the Marketing Department to help improve the chances of a successful launch. Organization alignment An organization is not aligned unless there is the removal of departmental silos. Communication needs to go up, down, sideways and diagonal. True alignment requires input, feedback, and transparency between departments, and there must be open communication regarding interdepartmental dependencies. Meaning, that if we are to achieve X, we need departments A and B to deliver THIS by THIS date. Furthermore, it’s important that each department can track another department’s progress, especially on those interdepartmental dependencies. ______________________ If this article sounds familiar within your organization, please reach out to me for a free consultation.