Setting goals and measuring

So when we look at our processes it has to be clear what they should achieve for us. The processes have to create a value; either via our core business, or indirect by delighting the customer or nice or not, simply because it is a legal obligation.

The organizations goals and the derived goals for the processes we are going to review will somehow have to reflect this.

Achieving goals means…

Reading this, it may seem so obvious that you can hardly believe this is not already done. Yet in practice we find tons of fundamental problems on those essential 3 points.

Are the right goals known and clearly defined?

Be not surprised when there is a lack of clear and unambiguous goals or even worse: when the goals given are  inducing exactly the opposite behavior from what actually is needed or wanted.

Due to the traditional approach of ‘cost cutting’ you may find several situations where sub-optimizations leads to undesired side effects and even raise of costs and decrease of value-creation.

Example:

The buying department is bonused on cheaper buying. They manage to buy cheaper boxes with a slightly higher variance on cutting size, gaining 15.000 euro yearly.

The boxes cause problems on the packaging lines leading to regular standstills, causing lost capacity worthwhile the 10-fold of the gained buying price. The down-spiral starts: Production is no longer meeting their targets, becoming frustrated, trying to make up lost time by refusing to release the equipment for maintenance etc.

Will the goal be accepted?

It is nice to have goals defined but what if some parties will not live up to the, do not support them, or even ignore them?

A good goal is

The motivation behind the goal determines the choices that will be made by the different actors that need to support and achieve them

“Why would Mr. X support this goal? What’s in it for him?”

The difference between a Goal, a Target and a Vision?

A goal is something to be achieved. It is binary: it is being achieved or not. “The ball is in or out”

A Target gives direction, it is an indicator that tells whether you are moving towards your goal or not.

A vision is the visualization of a dream. You might never achieve it, but everybody in the organization should be able to identify him or her selves with it.

Can we monitor whether we improve or not?

When the right goals are set we want to know where we are and in what direction we move. So relevant KPI (Key Performance Indicators) are needed.