Anatomy of Effective Goals & Goal Setting Frameworks

We've all heard the mantras: "A goal without a plan is just a wish," "Goals are dreams with deadlines," and the shamelessly cloying, "Reach for the sky!".

Those are great for social media memes and personal development book covers, but what should goal setting actually look like at work? You know, in practical terms.

We all know we should be setting big, juicy, inspiring goals for our companies and people, but because of the sheer size of this topic, we have no clue where to start. SMART goals, OKRs, Golden Circles, etc. — there are so many ways to break down a goal. But beyond the HR headlines and endless acronyms, what do these goal-setting frameworks have in common?

Let's get back to basics and take a deeper look at the core fundamentals that make a goal great.

What's the Purpose of Goal Setting?

Most of us think we know the purpose of goal setting, but unfortunately, life, business and bureaucracy have a way of consistently muddling the water. In fact, experts estimate that only 36% of organizations have a company-wide approach to goal setting.

Those of us who have attempted to set goals in the past — whether that be departmental revenue targets or those infamously doomed New Year's weight loss resolutions — would likely agree that setting the goal is the easy part. The brutal truth is that for a goal to make it beyond lip-service status, it must be adopted and upheld at every level of the business.

Here are the basic principles behind every great goal-setting framework.

The 4 Basic Functions of a Good Goal:

  1. It motivates and inspires employees
  2. It facilitates strategic planning
  3. It provides guidance and direction in daily tasks
  4. It helps evaluate and improve performance

The 3 Main Tenets of Goal Setting:

  1. A goal is better than no goal
  2. A specific goal is better than a broad goal
  3. A challenging and specific goal is better than an easy goal

What Are the Different Types of Goals (And How Do You Choose)?

Now that you know the fundamentals of why, let's dive deeper into the how and which.

You may already have a hunch that what works for Google may or may not be what's right for your company. Still, we now have more options for goal-setting than any other generation in business history, and deciding on something as powerful as THE north star for your entire company is a critical call to make.

After all, it may look great on paper, but what if it stops making sense as soon as the rubber meets the road? Luckily, there are some shared characteristics between the majority of proven goal frameworks.

The 3 Main Types of Goals:

  1. Absolute goals - These are usually the hard numbers: things like revenue, number of users, number of hires, time to hire, etc.
  2. Relative goals - These goals measure how your company stacks up in the marketplace and are usually things like market share or rankings.
  3. Sustainment goals - These goals let you know you're still on track to other big goals. These can be things like employee turnover, customer satisfaction, churn rates, etc.

The decision to choose OKRs, OGSMs or BSQs isn't what matters most. Any good goal/ goal-setting framework will have the same fundamental characteristics built in. The important part is not to cut any corners when it comes to executing these elements in the day-to-day.

Here's What the Best Goal-Setting Frameworks All Have in Common:

  • An action plan designed to motivate and guide an individual or group
  • Goal-setting criteria or rules
  • A time limit that's firm but appropriate
  • Metrics for measuring the goal
  • Focus on a set of 3-5 main goals vs. a million watered-down objectives
  • Feedback and flexibility to help adapt to change

When setting a good goal for your company and the individuals who make it run, make sure your goal ticks the above boxes.

But don't forget that, as with every other element of your business, goal setting is a living, breathing process. There may be times you have to step back and really think through what works for your unique culture and business.

Logic and Clear Thinking Are Timeless Goal-Setting Tools

Tomas Tunguz, co-author of Winning with Data: Transform Your Culture, Empower Your People, and Shape the Future says it best, “Ultimately, logic and clear thinking are probably the best tools for setting goals, and motivating an organization properly.”

At times, applying those tools may require you to adjust your expectations. Or, in the words of another goal-setting pro, Bill Gates once famously said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.” (And Bill's a guy who really gets stuff done.)

If you want to go after those BHAGs (that's Big Hairy Audacious Goals, in case that one escaped your radar), more power to you! Just create a goal-setting rule that in your organization, goals are meant to be pursued, not reached. Then align that in your metrics and feedback guidelines to support that goal across the org chart.

Because at the end of the day, the most important aspect of goal setting isn't a flashy acronym or perfectly-crafted memo, it's that you and your people all have a clear target to act on.

Product Tour

The tools to streamline your performance management process.

Learn More
Product Tour
Goal Management

Bring your performance management to life.

Learn More
Goal Management
Product Tour