What does success look like?
There’s a huge amount of psychological research which shows how humans perform better with a clear and compelling picture of what they are trying to achieve. In my experience, however, most leaders give far more attention to ‘clear’ and much less to ‘compelling’. Even worse, in their efforts to serve many different purposes, the terminology introduces complexity and confusion which actively reduce performance.
Unravelling this is made more difficult by the fact that each organisation (and sometimes each person) use the many terms in different ways. In describing the terms below, therefore, my intention is not to give a definitive meaning to each but rather is to explain the differences and problems that can arise.
So many terms…
These are the probably the simplest, and certainly the most common, but are also the most overused.
Every organisation needs budget figures to define the minimum acceptable level of performance – particularly for helping to communicate likely outcomes to financial stakeholders (owners, shareholders etc).
The problems with budgets are many:-
- Confusion with personal/departmental targets. Do you want people to deliver the budget or target?
- ‘Sandbagging’ – people negotiating excessively conservative budgets to make delivery of them easier.
People seeing budgets as all they have to deliver (so people aren’t motivated to stretch beyond them).
These are often numerical and the term is sometimes used almost synonymously with ‘budgets’. Generally they are an attempt to set higher, more stretching numbers than are usually the case with budgets. They are often related directly and indirectly to financial rewards in the form of pay increases and bonus awards.
Targets share many of the same challenges as budgets plus:-
- Not everything in organisations lends itself to numerical or ‘SMART’ targeting – so targets often overemphasise financial and customer measures at the expense of process, people, cultural and behavioural imperatives.
- Setting target levels is a highly inexact science, and the numbers set are often rendered irrelevant by uncontrollable external factors.
- Whilst they are set for motivational reasons, targets which are too high or too low (either initially or as events unfold) can also be very demotivating.
Often used interchangeably with targets, goals can bring in a greater aspirational element. Used well, goals describe the desired future in a more complete and descriptive way. This introduces much more internal motivation to complement the external motivation provided by financial rewards associated with targets.
Where goals become tricky is:-
- They often become abstract and woolly – ’employer of choice’ or ‘customer excellence’ – so become neither clear nor compelling.
- They are dismissed by those who want everything to be objectively quantified.
- They simply get less attention and focus than (numerical) budgets and targets.
Key Performance Indicators (KPIs)
To add to the confusion, KPis are a common term in organisations but which mean a great many things to different people.
They can be synonymous with either budgets or targets but they can also mean the ‘dial’ rather than the ‘reading’ – so If £3m profit is the target then the KPI would be ‘Pre tax annual profit’ and the target would be £3m.
Whilst it can be helpful to differentiate how you measure the area of focus (the dial) which does not change over time from the numerical target (the reading). Few leadership teams I have come across are capable of communicating this distinction well enough to have it used consistently across the organisation.
Something is missing…
Given all of these terms (and there are plenty more) you’d think that all the bases are covered wouldn’t you? They aren’t.
Remember that what is needed to increase performance is that goals are both clear and compelling. What happened to compelling? None of the approaches and terms above are particularly motivating. The only way they engage people is through attaching monetary incentives – external motivation – and every leader knows how fraught with problems financial rewards can be (there’s at least a full article on this alone – watch this space!).
I’d like, therefore, to introduce a new term – Ambition. Ambition is a rich description of what you are striving for. As well as being motivating, it’s clear enough for you, and everyone else in the organisation, to easily assess whether you are on track for it – and also to easily assess whether any decision will move you in the right direction.
It’s more than this though. Ambition also describes why the goal/s matter, how they improve the world and why we would each feel better if we achieved them. In short they should provide the bridge between what matters to each person and what the organisation is trying to achieve.
A great example
Not everyone is a fan of Starbucks – but one thing they do really well is to be clear about their Ambition. You can read the whole of it on their website but here’s an excerpt:-.
It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this; our work is never done.
Even as a critic of some aspects of Starbucks, that makes them a company whose Amition is motivating to me. Even if that aspect of their ambition doesn’t resonate for you, I bet that some part of it does, They have clearly invested a lot of time in clarifying and defining it. In return, this clarity of Ambition will be playing a big part in their undoubted business success.
Making a change in your team
Developing an Ambition in leadership teams is not easy. If it was, you’d have done it already! It is, however, immensely powerful, It is the essential foundation to deliver:-
- A clear, short, list of priorities to deliver the Ambition that everyone aligns behind.
- Powerful relationships in the Leadership Team and beyond built on the trust that comes from knowing you want the same things.
- Faster and more consistent delivery of the few things that really matter to reach what you are all driving for.
- A robust and energetic team that challenges one another to ever higher performance – in service of their shared goal.
- Genuinely transformational change that goes beyond the incremental annual grind.
The secret is simple. It’s almost impossible to create something truly compelling for you and your people if you start from a set of numbers. It’s easy, however, to create a set of numbers from what people are really motivated by.
Creating this in your Leadership Team requires a discussion of what each of you want for the organisation. To begin, ask each member of the team:-
- What attracted you to join this organisation?
- What are you most proud of it achieving so far?
- What are your highest hopes and aspirations for it?
- What would need to change to achieve them?
The answers to these questions will be the ingredients for your collective ambition. Few of them will be numeric. All of them will have great importance. When you have worked these into a statement of the destination that you all yearn for you’ll have your organisation’s Ambition. ie the potential to motivate, inspire both you and your people.
Building and communicating this vision will be the first steps to igniting the performance that you’ve been wishing for. As well as ending up with a set of goals that are both motivating and truly owned, I guarantee that the level of ambition will be higher than if you take a more conventional approach by starting with the numbers.
Please visit our website to read more about The Six Conversations Leadership Team programme or download our article, the Seven Illusions of Leadership which shows what it looks like in practice – based around a real case study.
Better still, give us a call on 0845 519 7871 to explore your issues further or to arrange a free Strategy Session.