Planning for performance (1)

In our February article, we asked the question “Does Performance Management Matter?” We briefly summarised the four key steps involved in setting up the Performance Management Process for employees.

In this article, our focus is on the first, and most important of the four steps – Planning. Benjamin Franklin said “If you fail to plan, you are planning to fail” and Alan Lakein (the well known author on personal time management – How to get Control of Your time and Your Life) said “Planning is bringing the future into the present so you can do something about it now.” It has been said that every minute spent planning saves 10 minutes in execution.

“…the amount of strategic planning a firm conducts positively affects its financial performance.” This means we must be clear about our goals and objectives. There should be no ambiguity about the desired outcomes and expected results. The first step in the planning process therefore is to set clear goals for our organisation, for ourselves and for our staff.

It should be a collaborative effort, and everyone must know what they are expected to do. Employees must understand what it should look like when they’ve done it. The link between what they’ve been asked to do and the goals of the organisation should be understood. If you don’t know where you’re going, you won’t know when you get there – Lawrence Peter “Yogi” Berra. You must consider:

i) What are the expected results? – why these results?

ii) What skills and knowledge do we need within the organisation to achieve these results?

iii) What actions should we take to achieve these results?

The acronym SMART is one that is often used for goal-setting, but SMARTER is better especially when you’re planning:

a) S – Goals should be SPECIFIC – What is the task? What exactly is the objective?

b) M – You should be able to MEASURE the goal. It should be quantifiable: how will I know when it’s completed? Peter Drucker said “What doesn’t get measured doesn’t get done”

c) A –Goals should be ACHIEVABLE otherwise they end up serving as a de-motivator for employees. If the task is too much of a stretch, it’s unlikely to get done. At the same time if it’s not enough of a stretch, it won’t be challenging – another de-motivator.

d) R – Goals need to be RELEVANT to the business and have a clear link to the business direction and strategy.

e) T – There must be a TIME-frame within which a goal should be achieved or a date for review. You should be able to answer the question “When?” Deadlines should be attached to goals to make them easier to track.

f) E – It’s important to EVALUATE goals from time to time, and adjust when necessary to accommodate the inevitable changes that will occur

g) R – The achievement of the goal should be REWARDING. Is this goal something that will motivate and keep individuals engaged and focused?

I looked at some of the more successful global firms, and Toyota kept popping up. On further study, I found that the business philosophy of the company is based on an understanding of human motivation. The planning process is very detailed, starting with goal-setting with buy-in and commitment from employees. This is followed by a structured implementation and action plan.

Despite all the recent challenges of the company and the car-recall crisis (23 million cars recalled across the world) that saw Toyota’s President appear before the US House Committee on Oversight and Government Reform, Toyota still ranks as No. 1 in the G2000 list of The World’s Largest Auto Companies of 2014.

How? Part of the answer lies in Toyota’s annual goal-setting process. The goals are cascaded globally at all levels and regular reviews take place. The company then ensures that the resources are made available to help achieve the goals. The other part of this equation is people. Their people own and take responsibility for the achievement of the targets.

General Electric (GE) – ranked Number 9 on the 2014 Fortune 500 listing, and The Coca-Cola Company – the World’s largest beverage company also place critical importance on planning and goal-setting. Both these companies have in place planning processes where everyone in the organisation knows what should be done, how it should be done and who should do it.

The significance of planning is critical. It has been said that “It was not raining when Noah built the ark”. Proper Prior Planning Prevents Poor Performance.

Ibiai Ani