How to Set Goals: Part 1 – Looking Back
““You can’t manage what you don’t measure.” ”
Now that 2019 is coming to a close, let’s take a look back and see how your company performed. Let’s take inventory of projects completed, resources used, expenses incurred, and effect on employees.
First, list all project completed in the year. This should be broken down by the scope of each project. There will likely be individual, group, department and/or company-wide accomplishments. The point of this exercise is to demonstrate what the company did with the 365.25 days provided last year.
Second, review all material purchases with your AP department or pull a report from your accounting software. You will want to identify the quantity and quality of raw materials and/or equipment purchased in the year to help complete the projects previously listed. You will also want to attach dollar amounts to those purchases to help qualify differences in quality, quantity and purpose.
Last, pull a report from your HR system to show terminations (both voluntary and involuntary), new hires, transfers and promotions. Be sure to review all notes on any voluntary termination as they help explain patterns in your company. The notes from exit interviews help tell a clear story.
Now, calculate the total cost to complete each project listed. Do this by totaling all costs associated with the project. This will include obvious items like raw materials and equipment, but will also include less obvious items like employee wages, insurance cost, opportunity costs, and more.
Did the projects your company completed cost what you anticipated? Can you easily identify any waste or inefficiencies? Great! Now that we have analyzed 2019 performance, let now set some goals for next year that address any issues we found.
Some Common Examples:
If you noticed that projects took more hours of work than anticipated, it would be beneficial to “look under the hood” to see if your expectations were off or waste was occurring. Start by digging up the first correspondences you had with your team around this project. Did you clearly designate a leader for the project and were clear (and measurable) expectations set? Look for Feedback Loop issues. Your Feedback Loop consists of all directing communication (owner giving directions) and reciprocal communication (employees giving feedback and/or reports). Was this communication loop predominantly one-way?
As you gather this information, reach out to the project leader and let him/her know you intend to review the project and look for ways to improve next year. Don’t use this as a disciplinary event because your employee won’t give you much. Instead, use this as an opportunity to develop and affirm the project lead. Even if the project did not go as planned, be sure to highlight successes achieved. When discussing areas for improvement, be sure to encourage the employee to speak up as he/she will have front-line exposure to the issues that matter to the company.
Review the initial plan and expectations against the time, material, and cost to finish the project. Take time to fully discuss what may have caused variations in expectations and reality. Let the employee continue to lead the project by giving his/her educated opinion on what could have prevented the unexpected variation.
If your employee is engaged and motivated, you will notice an eagerness to dive into the project and figure out together what could have been done to reduce waste. If you notice the employee not contributing and body language says “I don’t want to be here”, you either have someone that needs more encouragement or someone that is checked out and not engaged.
If you noticed an unusual amount of raw material or equipment purchased to complete the project, it might be worth looking into the project design itself. First, gather reports showing what and when items were purchased in conjunction with this project. While gathering that information, be sure to alert the project leader and any supporting team members that the company will be reviewing the project to look for missed opportunities and design improvements for next year. It is important to not put anyone on the defensive here. If you want creative and exciting solutions from your team, establish ground rules of communication. Some good examples would be:
No “shooting down” ideas, no matter how silly.
This isn’t the meeting to assign blame, our purpose here is to get better as a company.
Everyone must participate.
Your job is to facilitate communication. The project lead will have intimate insight into why costs were beyond what was anticipated. There may have been weather-related situations that cost the project extra cash. If the issue was with overall design, could the project have been adapted before going down the more expensive route?
Now that you have completed your research and gathered inputs from your team, we now have all the data needed to set better goals for next year.
Next, we’ll look at ways to create goals from this data and motivate employees to achieve what is best for the company.
