Throughout my many years in a corporate career, no matter the industry, size of the company, or the country, there was always some kind of individual performance management that involved goal-setting. The most effective version used key performance indicators (KPIs) that cascaded down the organization from the executive leadership team. What I found most useful about KPIs was that when I got overwhelmed by competing demands for my time, my KPIs provided a compass for what I should prioritize. It was something to which I could refer and hold myself accountable.
With more complex work, requiring greater collaboration, more work is being done in teams than ever before. In fact, according to Microsoft, we are on twice as many teams as we were five years ago. The theory that two (or more) heads are better than one doesn’t always live up to the promise, however. Although teams have become the dominant force for getting work done, in many cases, the systems in place to support the work still focus on individual performance.
When teams operate in a culture that focuses on individual goals and KPIs, they are prone to misalign. The compass for what to prioritize points team members toward their individual agenda, even when it is out of step with that of the team. In order to collaborate effectively and be high-performing, teams need a compass of their own. To quote Lewis Carroll, “If you don’t know where you are going, any road will take you there.”
Team strategy and KPIs
What the team is there for
Teams should start with the end in mind. Why does the team exist? What it is there to do? The end goal for a customer service team, for example, might be to increase customer satisfaction by a certain percentage, for marketing, perhaps it is to increase brand recognition, or for a sales team, hit a revenue goal. There is likely more than one goal. In addition to revenue, sales may also exist to provide a great customer experience, for example. Gaining clarity and agreement about the end-goals is a critical first step, but also just the beginning.
When I recently asked a financial services team I was working with, about their team goals, they confidently told me they had a certain revenue number they intended to hit by the end of the year. It was when I asked, “How will you do that?” that they stumbled, before tossing out a lot of ideas.
It isn’t that the team didn’t have the answer, or even the right answer, the problem was that they hadn’t discussed it to determine how they should prioritize their activities and what metrics they would use to measure success. This is where team KPIs come in.
How they will get it done
Once the clear goals have been established and agreed upon, the team needs to coalesce on what they need to do to achieve them. They need to devise a road map, with signposts, to take them from the current state to where they want to be. KPIs provide clarity, help the team track progress, and if necessary, help the team identify when to course correct.
For each goal, I encourage teams to draw a timeline so they can visualize the journey. At the far right, is the end goal, and at the far left, is where the team is today. Next, the team fills in the middle by brainstorming how they will get from one end to the other. If the end goal is a revenue number for example, they may start with:
- How many new customers will we need?
- How will we get those new customers?
- How many referrals do we need to convert into customers?
And so on. Once the team has exhausted the possibilities, they discuss which KPIs will truly make a difference, and come to an agreement on what metrics the team will use to hold itself accountable. (The use of SMART goals: Specific, Measurable, Achievable, Realistic, Time-bound, is highly encouraged.)
Alignment is key
The importance of team goals and KPIs is as much about the process of determining them as it is about the goals themselves. When teams gain alignment on the work they are there to do, they communicate better, are more motivated, make decisions faster, and are more productive. Failure to align, on the other hand, can have serious consequences. According to a survey of almost 8,000 managers, documented in Harvard Business Review, 40% cited “failure to align” as the single greatest challenge to executing their company’s strategy.
What it will take
For teams to be high performing, not only do they need to align on what they are there to do and how they will do it, but also on what it will take to achieve it. This is where the team answers, “How do we need to work together?”
If determining clear goals is step one; deciding on KPI’s is step two, then step three is agreeing on how the team needs to behave to be successful. For example, a team may decide that in order to meet their KPI for new customers (and not step on each other’s toes,) they will need to be transparent and communicate about their progress with the respective prospects. As with KPIs, the process is to continue to peel the onion by asking questions, such as:
- How will we communicate clearly?
- What does that look like?
- How will we document what we are doing?
- And eventually, how will we be accountable for this?
Agreeing on team behaviors helps teams be thoughtful about what they need from one another before issues arise and urgency breeds reaction or problems fester. Rather than one and done, this is a process that teams may continually revisit to ensure they remain on target, in alignment, and working together to achieve their team goals.
Organizations are becoming flatter and more reliant on teams to solve complex problems, yet too often teams are created with an expectation that just putting smart people in a room together is enough. For teams to fulfill their potential, they need systems in place that support teamwork. There is a saying that what gets measured gets done. High-performing teams set team goals and decide as a team what they need to do and how they need to be to achieve the goals. They prioritize team alignment and they follow a team compass.
Amy Kan is the founder of The Workplace Initiative, she works with executives and teams to align with their purpose, and expand their capabilities to motivate, inspire and achieve business results.