Recently, I listened to a presentation by Dr. Don Sull, global expert on strategy and execution.

According to his website, Dr. Sull is “a Senior Lecturer in the Technological Innovation, Entrepreneurship, and Strategic Management group at the MIT Sloan School of Management, where he teaches courses on Competitive Strategy and Strategy Execution in Volatile Markets”

This is an extremely important topic since ALL businesses want to execute on their strategy.

Even more importantly, every business wants to achieve results.

Dr. Sull pointed out that there are over 35K books written on the topic of strategy but very few are written on how to turn strategy into results. 

Dr. Sull and his team studied over 300 organizations and thousands of employees over multiple industries. In their quest for answers, his team conducted interviews with the people who were responsible for executing the company’s strategy. They spoke with the real “boots on the ground” and the take aways from the study revealed very specific areas where companies fell down in their attempt to execute.

At the center of the study was the role goals play in helping companies execute. More specifically there were 4 ways in which goals acted as a powerful tool within organizations.

Company And Employee Goals Act As Blinders

The first way goals were seen to help organizations be more successful was in the area of focus.

Goals acted as “blinders” for the company, helping employees to stay focused on the areas that were believed to drive results.

According to Sull, there have been over 500 studies looking at the impact of goals on individual performance. Goals need to be specific and ambitious. Those organizations which implement these types of goals (specific & ambitious) outperform organizations that do not. In fact, the impact on the real world is enormous.

Implementing goals increases performance of the average person 60% putting them in the 80th percentile of performers. If you add feedback to the mix, their performance jumps to the 90th percentile.

According to Sull’s research only about 44% of companies surveyed gave regular feedback to their employees.

Question – have you implemented specific and ambitious goals in your company? What % of your employees receive regular feedback on those goals?

Company And Employee Goals Act As Links

The second area where goals were found to play a role was in linking strategy to specific activities and investments – goals as links.

Many companies were using the best practice of goal development where employees met with their managers and worked together to determine the correct goals.

Sull also found the even though this best practice was happening 84% of the time, only 66% of the goals were linked to departmental goals. In only 45% of the time did the boss explain how the employees goal supported the company’s strategy. Lastly, only 42% of the people surveyed said that they know the top 3 goals of the company. In fact, the study participants were given 5 tries to remember the goals!

Sull saw this as a major problem. Basically, only 40% of the people who are responsible for executing on the company’s strategy could articulate the strategy in some concrete way – what are the top 3 things we’re focused on this year?

Question – if you were to ask your employees what the top 3 goals of the company were, could they answer correctly?

Company And Employee Goals Act As A Bold Hypothesis

The third area where goals were seen to drive performance was using goals as a “bold hypothesis”.

Sull’s point here was that “bold” goals or in Jim Collins words “Big Hairy Audacious” Goals (BHAG) have a way of helping companies make bold or audacious leaps forward.

When companies set unambitious goals, the staff tends to only make incremental improvements. Staff only “searches narrowly” for solutions since their isn’t much of a gap between where the company is currently to where it needs to go.

Bold goals force the team to be creative and look for disruptive solutions to meet the challenge.

According to Sull, this bold hypothesis or guess tends to be risky. The bolder the goal, the more frequent you should be checking in to iterate and course correct. The organization needs some rhythm to check the results against predetermined metrics and KPIs. Leaders must structure the discussions around goals and give their teams freedom to express when the goals are off-course.

Question – have you set “bold” goals for this year? What is your process for checking-in and course correcting?

Company And Employee Goals Act As A Signal

The final area where Sull and his team saw how goals could be used to drive results was in the area of using goals as a signal.

In any business, there is loads of information flying around. Leaders try to coordinate people across the organization, so how do they transmit the information needed? There are tons of tools for this already – email, chat etc, but it’s impossible to keep everyone up to date on all the information (although some organizations try).

Sull found that goals can distill the information into a highly digestible form (3-5 company goals). Leadership can then make goals public and where employees can find redundancies (oh…you’re working on that too?).

People can seek for information they want to get stuff done. Transparent goals obviously have the biggest effect.

This is where Sull found another huge area for improvement. Only 21% of the people surveyed indicated that they knew their colleague’s initiatives or goals.

Question – do you have goal transparency? Does everyone in the company have access to the company goals and where you’re leading the organization – a clear signal?

In summary, goals are an incredibly powerful tool when used to drive performance and can be a major competitive advantage since many of your competition are probably not using this tool to a large effect in their organizations.

Need help implementing goals within your entire organization? We can help. Sign up for a free demo which can help you do all four things mentioned above.