Manager's Toolkit

The 13 Skills Managers Need to Succeed

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• Publisher: Harvard Business Review Press
• Year: 2004
• Print ISBN: 9781591392897
• eBook ISBN: 9781422160756
• Topic: Business
• Subtopic: Management
• Index: Business

Zeroing in on the specific skills that make great managers stand out from the pack, this comprehensive guide is both an essential primer for new managers and a valuable resource for seasoned executives. From hiring and retaining good people to motivating and developing team members, from understanding key financial statements to delegating work effectively, and from setting goals for others to managing your own career, this actionable guide walks readers through every aspect of managing in a complex business world. Filled with practical tools and tips, this essential toolkit helps managers to stay at the top of their game.

Part One

Learning the Basics

Setting Goals That Others Will Pursue

Committing to an Outcome

Key Topics Covered in This Chapter

•Why goals must originate in the strategic objective of the enterprise

•Top-down and bottom-up goal setting

•The characteristics of effective goals

•Developing goals for the unit and oneself

•Setting priorities

•A four-step process for accomplishing goals

•After-action review

GOAL SETTING is a process for defining targets you plan to achieve. It is one of the essential functions of management. When you set goals, you commit to outcomes that you can accomplish personally or through your subordinates. Goal setting makes it possible to focus limited resources and time on the things that matter most. It sets the course of action.

By setting goals and measuring their achievement you can focus on what is most important, waste less energy on noncritical tasks, and achieve greater results. As a manager, you are responsible for setting goals for your unit and for yourself. This chapter explains how to do it right.¹

Begin with Strategy

Goals should emerge from the strategy of the enterprise. If the strategy is to become the market share leader through rapid product introductions, for example, unit and individual goals should serve that strategy. There should be, in fact, a cascading of linked and aligned goals from top to bottom, as described in figure 1-1. In this figure, the enterprise’s strategic goal is at the top. Each operating unit has goals that directly support that strategic objective. Within the operating units, teams and individuals are assigned goals that directly support those of their units. The real power of these cascading goals is their alignment with the highest purposes of the organization. Ideally, every employee would understand his or her goal, how it serves the goal of the unit, and how the unit’s activities contribute to the strategic objective of the enterprise.

FIGURE 1 - 1

Goal Alignment

Top-Down or Bottom-Up?

The two common approaches to goal setting are top-down and bottom-up. In top-down goal setting, management sets broad goals and each employee is assigned objectives that are aligned with and support those broad goals. This approach is most appropriate when rank-and-file employees need close supervision, are new to the organization, or aren’t familiar with unit or company goals.

In the bottom-up method, employees develop their own goals, and their manager integrates them into larger organizational goals. This bottom-up approach is most appropriate when employees are fairly self-directed and when they clearly understand the strategy of the business, customer needs, and their own roles in the larger scheme of things.

In both approaches, goal setting is most effective when employees are involved in the process. Involvement increases buy-in, ensures that objectives are understood, and fosters accountability at every level. This involvement may not be possible in the top-down approach. After all, the manager chooses the goals and allocates them. However, buy-in can be secured if the manager communicates the purpose of the individual employee’s assigned goals, why they are important, and how they fit in with the organization’s larger strategy.

In most cases, a company’s goals are determined through a process that subsumes both approaches. Management does not dictate objectives to employees without consultation, nor do employees have a free hand in determining their own goals. Instead, unit and individual goals are determined through a negotiating process in which what is necessary and what is feasible are discussed by management and employees.

Characteristics of Effective Goals

No matter which approach you take to goal setting, those goals must be effective. And to be effective they must be

•recognized by everyone as important;

•clear and easy to understand;

•written down in specific terms;

•measurable and framed in time;

•aligned with organizational strategy;

•achievable but challenging;

•supported by appropriate rewards.

Consider this example of a sales manager assigning goals to a field sales person:

It’s very important that our company increase its sales revenues during the coming calendar year. We’ve made sizeable investments in training and manufacturing lately, and senior management expects us to cover those investments with higher revenues. If we can do that, the company’s financial situation will be greatly improved and it will be in a better competitive position for the future. And that means more job security and higher bonuses for everybody.

The company’s goal is to increase sales revenues by $15 million over the coming year, and everyone in the sales force is expected to contribute to that goal. Your piece of the goal is to increase sales in your territory from $2 million to $2.2 million for the year—a 10 percent increase. I’ll follow up with a written statement to that effect.

A 10 percent increase won’t be easy given the outstanding job you’ve done already, but there’s still plenty of opportunity in your territory. I’m confident that you can achieve that goal, and I’ll back you up in any way I can.

Notice how this manager touched on every one of the characteristics of effective goals.

Two Mistakes to Avoid

Many organizations make two mistakes in setting goals:

1. They fail to create performance metrics. Performance metrics provide objective evidence of goal achievement—or progress toward it. Output per machine, errors per thousand units produced, and time-to-market for new products are all examples of performance metrics. Whichever metrics you use, be sure that they are linked to the goal outcomes you seek.

2. They fail to align goals and rewards. Many companies change their goals but do not follow up with a realignment of rewards. Even when they try, they often get it wrong, and end up rewarding the wrong things. Misaligned rewards encourage employees to put their energy into the wrong activities.

Developing Unit Goals

In a typical day, you probably think about how your unit can operate more smoothly, which new responsibilities it should assume, how people can work better as a team, or how operating expenses can be reduced. Each one of these areas contains potential goals. Your challenge is to sort through them and identify those that are achievable, linked to organizational goals, and likely to create the most value.

So every six or twelve months you should review your unit’s diverse activities, and try to identify opportunities to make a big difference in performance. And since several brains are better than one, call your team together—preferably on a regular basis—to brainstorm possible goals. Ask questions such as these:

•What initiatives need to be accomplished to ensure success?

•What standards are we striving for?

•Where can productivity and efficiency be improved by 10 percent or more?

•What are our customers expecting from us?

•Are customer specifications changing? How can we respond?

Don’t worry about constraints or execution as you’re brainstorming. Also, don’t forget to reexamine existing goals that may need to be revised because of changes in customer requirements and the competitive environment.

Many managers approach goal setting with apprehension. On the one hand, they know that goals should address the most important challenges facing their organizations. But these, almost by definition, are difficult and involve above-average risk. As a result, there’s a natural temptation to avoid them or to avoid setting the bar too high. After all, difficult goals may generate grumbling among subordinates. There is also a higher likelihood of failure and the career penalties that go with it. You could avoid these problems by making goals less challenging. But that might not be what’s best for the organization or for you and your subordinates. The best course is to communicate frankly with your subordinates. Explain why these challenging goals were selected and why achieving them is so important, both for the organization and for them as individuals. Make sure that they see a personal benefit.

Prioritizing

Some goals are critical to future success. Others are simply nice to have. Because resources are limited, you have to differentiate between critical and “nice to have” goals. Thus, once you have a list of goal ideas, narrow the list and select only the most important ones. Start by identifying criteria that will help you distinguish high-priority goals from low-priority ones. For example:

•Which goals do your organization value most?

•Which will have the greatest impact on performance or profitability?

•Which are most challenging?

•Which goals are your team best situated—by talent or training—to tackle?

Some goals are bound to overlap. When this happens, consolidate them into a single, larger goal. Next, review your list of goals and use your criteria to rank them as A-, B-, or C-level priorities:

Priority A: High value and primary concern.

Priority B: Medium value and secondary importance.

Priority C: Little value an...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Introduction
• Part One: Learning the Basics
• Part Two: Reaching the Next Level
• Part Three: Mastering the Financial Tools
• Appendix A: Useful Implementation Tools
• Appendix B: Legal Landmines in Hiring
• Notes
• Glossary
• For Further Reading
• Index
• About the Subject Adviser
• About the Writer