Download - Goal Setting for CEOs
Get To High Performance BEST PRACTICES FOR ESTABLISHING GOALS FOR YOUR MANAGEMENT TEAM IN THE NEW YEAR
About the Webinar Speaker o Chairman, Aus-n Technology Council and Co-‐founder and Managing Partner of private equity firm Lone Rock Technology Group
o Developed and implemented an effec-ve goals management system as the former CEO of two soHware companies
o As CEO, led both of those soHware companies to successful nine-‐figure acquisi-ons by two Fortune 500 companies
o In 2010, co-‐founded Aus-n-‐based Cache IQ, a storage soHware company. NetApp acquired it in November 2012.
o Co-‐founded network management soHware company NetQoS in 1999 and led it to become one of the fastest growing technology companies in the U.S., with 31 consecu-ve quarters of double-‐digit revenue growth. CA Technologies acquired the company in 2009, genera-ng more than 10x return on capital to our private equity investors.
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Joel Trammell CEO, Khorus
Lack of Influence on the Organiza4on
CEO Challenges
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1Lack of Timely Informa4on to
Address Problems 2 Lack of Engaged Employees 3
Why Quarterly Company Goals?
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Monthly Goals
Short -meline to plan and execute a cohesive strategy
Quarterly Goals
Drive Company Priori-es
Adapt to Changing Business Condi-ons
Engage Employees
Half Yearly/Annual Goals
Not Fast enough to respond to
markets driven by
Lose sense of focus and
urgency with too much slack
built in
2-‐5 Year Goals
Excellent for company
vision, poor for transla-ng Strategy to opera-ons
and execu-on
Execution Happens When…
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Employees understand current strategy
1
Employees develop goals linked to strategy 2
Measurements are iden4fied 3Employees act with
purpose 4
Results are reviewed weekly 5
Do Employees Understand Current Strategy?
“…only 7% of employees today fully understand their company business strategies and what is expected of them in order to help achieve company goals.”
-‐Kaplan and Norton
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DO EMPLOYEES UNDERSTAND YOUR CURRENT STRATEGY? WHY DON’T EMPLOYEES GET IT?
No direct -e between corporate goals and day to day ac-vi-es
“When CEO’s talk strategy, 70% of the company does not get it.”
-‐ Harvard Business Review
Corporate Goals
Employee Goals
Strategy Executed Through Goals Grow product revenue by 40% in 1Q 2014
Develop & execute new campaigns to generate qualified leads & grow pipeline by $10 million
Close $2 M in new customer bookings in 1Q 2014
Sample Corporate Goal
Measures
● Launched? Y/N?
● Quality? ● Measure 3
● Priority Goals – new ini-a-ves that specify the priori-es of the CEO. Any one department should contribute to at most two priority goals. ◦ “Launch Product XYZ” ◦ “Reduce Product Defects by 27%”
● Sustaining Goals – normal opera-ons of the company ◦ “Con-nuous Improvement in Opera-onal Excellence”
◦ “Deliver World-‐Class Customer Sa-sfac-on”
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Setting Corporate Goals
Launch Product XYZ
● Department goals support the Corporate Goals either directly or indirectly through the hierarchy. ◦ “Develop Marke-ng Plan to Support Product XYZ Launch”
● Departments may also create goals that don’t link to the Corporate Goals ◦ “Increase Marke-ng Mee-ngs Set by 25%”
● Any one department should only support a maximum of two priority goals
Sample Department Goal
Measures
● # of Marke-ng Qualified Leads
● Measure 2
● Measure 3
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Setting Department Goals
Develop and Execute Marke-ng Plan to Support Product XYZ Launch
● Individual contributors create individual goals that link directly to department or corporate goals
● Individual goals come out of a collabora-ve process between the individual and their manager
Sample Individual Goal
Measures
● Quality?
● # of Downloads ● # of Conversions
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Setting Individual Goals
Publish Whitepaper to support Product XYZ launch
Determine exactly when the goal will be completed
Establish goals clearly -ed to higher level
goals
Make sure the goal can be accomplished
Establish clear objec-ve
measures to define the
goal
Make sure the goal is clear
Follow the SMART Goal Framework
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● Predic-ve Measures ◦ Metrics that measure the ac-vi-es that drive outcome measures. A predic-ve measure for revenue in the quarter might be number of qualified mee-ngs held.
◦ Key role of management is to iden-fy the predic-ve measures for every individual in the company and facilitate that ac-vity.
● Outcome Measures ◦ Metrics that focus on the results at the end of a -me period, aka historical performance. Example, revenue in the quarter.
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Choosing the Proper Measures
Website Visitors
Sales Mee-ngs/ Demos
Closed Bookings
Free Trials
Predic-ve Measures
Outcome Measure
Execution Happens When…
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Employees understand current strategy
1
Employees develop goals linked to strategy 2
Measurements are iden4fied 3Employees act with
purpose 4
Results are reviewed weekly 5
● Feedback needs to be bi-‐direc-onal. Individual contributor to management. Management to individual contributor.
● Individual contributors must be able to communicate their issues without interpreta-on to the top of the organiza-on.
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Results are Reviewed Weekly
Complete the Process
Final status for all goals is recorded.
CEO summarizes corporate goal results to the en-re organiza-on.
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● Corporate Goal 1: Grow revenue by 20% Y/Y in Q2
● CEO Comment: ◦ Revenue growth for Q2 came in at ~26%. I want to thank everyone involved for delivering another excellent performance.
◦ I want to specifically note the efforts of our western region in signing four new Fortune 500 customers.
◦ Our new XYZ product contributed 5 million in revenue in only its 2nd quarter on the market. It is clear we are gaining market share across all regions.
◦ Let’s con-nue this momentum into Q3.
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CEO Goal Review ● Elements of CEO Commentary: ◦ Candid performance assessment ◦ Gra-tude ◦ Commenda-on ◦ Mo-va-on
10 Weeks
Goal Setting and Execution Timeline
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5 4 6 1 2 3 12 11 10 7 8 9
Goals Cascaded and Aligned
QUARTER 1
1-‐2 Weeks
Upda4ng Goals throughout the Quarter
1 Week
Next Quarter goals discussions begin
2 Weeks
Next Quarter goals discussions begin
14 13
QUARTER 2
16 15
2 Weeks
Complete and Submit Results
þ Make the goals posi-ve
þ Include everyone
þ Build a rhythm
þ Insure closure
þ Train your managers
þ Encourage input from the botom
þ Keep it simple
ý Unrealis-c targets ý Try to capture every ac-vity
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Do’s and Don’ts
● 31 Consecu-ve Quarters of Double Digit Y/Y Growth
● 10X return for investors ● <3% Unwanted Employee Turnover
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Case Studies Was acquired by In 2009
Conclusion
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A properly executed goal system will drive the following benefits:
Allow the leader to drive the organiza4on instead of
each group ac4ng individually
1
Last minute surprises will be drama4cally reduced
2
Employees will be much more engaged as they understand how they
contribute directly to the goals of the company
3
Contact the Speaker ● Joel Trammell
* : [email protected] ! : htp://khorus.com : @TheAmericanCEO : htp://theamericanceo.com : htp://www.linkedin.com/in/joeltrammell : htp://www.forbes.com/sites/joeltrammell/
Joel Trammell