Get To High Performance BEST PRACTICES FOR ESTABLISHING GOALS FOR YOUR MANAGEMENT TEAM IN THE NEW YEAR
Oct 21, 2014
Get To High Performance BEST PRACTICES FOR ESTABLISHING GOALS FOR YOUR MANAGEMENT TEAM IN THE NEW YEAR
About the Webinar Speaker o Chairman, Aus-n Technology Council and Co-‐founder and Managing Partner of private equity firm Lone Rock Technology Group
o Developed and implemented an effec-ve goals management system as the former CEO of two soHware companies
o As CEO, led both of those soHware companies to successful nine-‐figure acquisi-ons by two Fortune 500 companies
o In 2010, co-‐founded Aus-n-‐based Cache IQ, a storage soHware company. NetApp acquired it in November 2012.
o Co-‐founded network management soHware company NetQoS in 1999 and led it to become one of the fastest growing technology companies in the U.S., with 31 consecu-ve quarters of double-‐digit revenue growth. CA Technologies acquired the company in 2009, genera-ng more than 10x return on capital to our private equity investors.
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Joel Trammell CEO, Khorus
Lack of Influence on the Organiza4on
CEO Challenges
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1Lack of Timely Informa4on to
Address Problems 2 Lack of Engaged Employees 3
Why Quarterly Company Goals?
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Monthly Goals
Short -meline to plan and execute a cohesive strategy
Quarterly Goals
Drive Company Priori-es
Adapt to Changing Business Condi-ons
Engage Employees
Half Yearly/Annual Goals
Not Fast enough to respond to
markets driven by
Lose sense of focus and
urgency with too much slack
built in
2-‐5 Year Goals
Excellent for company
vision, poor for transla-ng Strategy to opera-ons
and execu-on
Execution Happens When…
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Employees understand current strategy
1
Employees develop goals linked to strategy 2
Measurements are iden4fied 3Employees act with
purpose 4
Results are reviewed weekly 5
Do Employees Understand Current Strategy?
“…only 7% of employees today fully understand their company business strategies and what is expected of them in order to help achieve company goals.”
-‐Kaplan and Norton
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DO EMPLOYEES UNDERSTAND YOUR CURRENT STRATEGY? WHY DON’T EMPLOYEES GET IT?
No direct -e between corporate goals and day to day ac-vi-es
“When CEO’s talk strategy, 70% of the company does not get it.”
-‐ Harvard Business Review
Corporate Goals
Employee Goals
Strategy Executed Through Goals Grow product revenue by 40% in 1Q 2014
Develop & execute new campaigns to generate qualified leads & grow pipeline by $10 million
Close $2 M in new customer bookings in 1Q 2014
Sample Corporate Goal
Measures
● Launched? Y/N?
● Quality? ● Measure 3
● Priority Goals – new ini-a-ves that specify the priori-es of the CEO. Any one department should contribute to at most two priority goals. ◦ “Launch Product XYZ” ◦ “Reduce Product Defects by 27%”
● Sustaining Goals – normal opera-ons of the company ◦ “Con-nuous Improvement in Opera-onal Excellence”
◦ “Deliver World-‐Class Customer Sa-sfac-on”
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Setting Corporate Goals
Launch Product XYZ
● Department goals support the Corporate Goals either directly or indirectly through the hierarchy. ◦ “Develop Marke-ng Plan to Support Product XYZ Launch”
● Departments may also create goals that don’t link to the Corporate Goals ◦ “Increase Marke-ng Mee-ngs Set by 25%”
● Any one department should only support a maximum of two priority goals
Sample Department Goal
Measures
● # of Marke-ng Qualified Leads
● Measure 2
● Measure 3
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Setting Department Goals
Develop and Execute Marke-ng Plan to Support Product XYZ Launch
● Individual contributors create individual goals that link directly to department or corporate goals
● Individual goals come out of a collabora-ve process between the individual and their manager
Sample Individual Goal
Measures
● Quality?
● # of Downloads ● # of Conversions
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Setting Individual Goals
Publish Whitepaper to support Product XYZ launch
Determine exactly when the goal will be completed
Establish goals clearly -ed to higher level
goals
Make sure the goal can be accomplished
Establish clear objec-ve
measures to define the
goal
Make sure the goal is clear
Follow the SMART Goal Framework
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● Predic-ve Measures ◦ Metrics that measure the ac-vi-es that drive outcome measures. A predic-ve measure for revenue in the quarter might be number of qualified mee-ngs held.
◦ Key role of management is to iden-fy the predic-ve measures for every individual in the company and facilitate that ac-vity.
● Outcome Measures ◦ Metrics that focus on the results at the end of a -me period, aka historical performance. Example, revenue in the quarter.
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Choosing the Proper Measures
Website Visitors
Sales Mee-ngs/ Demos
Closed Bookings
Free Trials
Predic-ve Measures
Outcome Measure
Execution Happens When…
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Employees understand current strategy
1
Employees develop goals linked to strategy 2
Measurements are iden4fied 3Employees act with
purpose 4
Results are reviewed weekly 5
● Feedback needs to be bi-‐direc-onal. Individual contributor to management. Management to individual contributor.
● Individual contributors must be able to communicate their issues without interpreta-on to the top of the organiza-on.
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Results are Reviewed Weekly
Complete the Process
Final status for all goals is recorded.
CEO summarizes corporate goal results to the en-re organiza-on.
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● Corporate Goal 1: Grow revenue by 20% Y/Y in Q2
● CEO Comment: ◦ Revenue growth for Q2 came in at ~26%. I want to thank everyone involved for delivering another excellent performance.
◦ I want to specifically note the efforts of our western region in signing four new Fortune 500 customers.
◦ Our new XYZ product contributed 5 million in revenue in only its 2nd quarter on the market. It is clear we are gaining market share across all regions.
◦ Let’s con-nue this momentum into Q3.
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CEO Goal Review ● Elements of CEO Commentary: ◦ Candid performance assessment ◦ Gra-tude ◦ Commenda-on ◦ Mo-va-on
10 Weeks
Goal Setting and Execution Timeline
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5 4 6 1 2 3 12 11 10 7 8 9
Goals Cascaded and Aligned
QUARTER 1
1-‐2 Weeks
Upda4ng Goals throughout the Quarter
1 Week
Next Quarter goals discussions begin
2 Weeks
Next Quarter goals discussions begin
14 13
QUARTER 2
16 15
2 Weeks
Complete and Submit Results
þ Make the goals posi-ve
þ Include everyone
þ Build a rhythm
þ Insure closure
þ Train your managers
þ Encourage input from the botom
þ Keep it simple
ý Unrealis-c targets ý Try to capture every ac-vity
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Do’s and Don’ts
● 31 Consecu-ve Quarters of Double Digit Y/Y Growth
● 10X return for investors ● <3% Unwanted Employee Turnover
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Case Studies Was acquired by In 2009
Conclusion
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A properly executed goal system will drive the following benefits:
Allow the leader to drive the organiza4on instead of
each group ac4ng individually
1
Last minute surprises will be drama4cally reduced
2
Employees will be much more engaged as they understand how they
contribute directly to the goals of the company
3
Contact the Speaker ● Joel Trammell
* : [email protected] ! : htp://khorus.com : @TheAmericanCEO : htp://theamericanceo.com : htp://www.linkedin.com/in/joeltrammell : htp://www.forbes.com/sites/joeltrammell/
Joel Trammell