What if we made annual objective setting actually useful?

The annual objective setting process as practiced in most organisations is badly broken. It is bureaucratic, consumes an enormous amount of energy and produces results which at best are irrelevant, but more often actually hinder organisational performance.

The problems are many. The process is typically detached from budgeting and intertwined with individual performance management. It fails to set real priorities, lacks transparency, does not engage the wider organisation, does not align department or team contributions, focuses on tasks rather than outcomes, and tends to be detached from operational reality. No wonder it reinforces silos, hurts cooperation and contributes to organisational overload.

And no wonder leaders and team members alike loathe the process. Still they keep filling in these forms year after year.

But what if we made annual objective setting actually useful?

What if we used the beginning of the year to have a meaningful, organisation-wide conversation about what is important and needs to be accomplished this year?

What if the result of this conversation were clear priorities for the organisation, its departments, teams and individuals?

What if these priorities together actually told a coherent, inspiring story about what it is an organisation aims to achieve over the coming months?

What if it were so totally transparent and consistent that everybody clearly understood how they themselves and everybody else is going to contribute?

What if the priorities were actually consistent with the way budget and resources are allocated?

What if setting priorities involved actual trade-offs? If it not only identified what’s most important — but also what’s not and therefore will not be done?

What if the objectives were actually inspiring and meaningful from a human perspective? What if it acknowledged that financials are always a consequence, not the objectives per se?

What if the objectives were actually used on a daily basis to make decisions and set meeting agendas?

What if clarity were more important than certainty? If there was a built-in mechanism to adjust priorities explicitly and consistently when required?

What if there were regular progress reviews for reflection and learning?

What if?

It’s your choice

All of this can be achieved. It is not easy, but it is not rocket science. It is one of the most fundamental aspects of good management. Management’s job is to make organisations function and resources productive. Clearly, this can only be achieved if there’s a shared understanding of what the organisation aims to achieve, when everybody works towards this common goal and is inspired by it. In the long term, as in purpose and vision, but also in the short term, as in annual or quarterly objectives.

If you’re wondering how to do it, these earlier posts may help you get started: A better way to set objectives and Objectives — the one thing to get right.

Are you going to fill in these forms or are you going to make objective setting useful?

This post first appeared on www.raymondhofmann.com.