How to Set Annual Goals - HOF 2025

Summary

Podcast Summary: Manager Tools – How to Set Annual Goals (HOF 2025)

Episode Air Date: December 22, 2025
Hosts: Mike & Mark (Manager Tools)

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Overview

This classic Manager Tools series (in three parts) is devoted to the actionable, practical, and effective process of setting annual goals. The hosts challenge the prevailing use of "SMART" goals, advocate for their alternative "MT Goals" methodology, and provide a comprehensive framework to make goal-setting both simpler and more results-driven. The series concludes with an instructive real-life story about transforming abstract principles into practical value, reinforcing that anyone can set meaningful, actionable goals regardless of role or context.

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Key Discussion Points & Insights

1. The Problem with Traditional Goal-Setting (SMART Goals)

(Start – 34:13)

• Widespread Frustration: Managers often feel burdened by annual goal-setting, particularly the wordsmithing required by corporate frameworks. Many create goals just "to be noticed," fearing to set them too high or too low.

  "It's dramatic, it's high drama, it's soap-operatic... managers saying to themselves, 'we must do it just right'. Yes, yes, we must." (C, 05:56)

• Lack of Collaboration: Managers rarely share their goals, methods, or processes with peers, leading to inefficiency and missed opportunities for synergy.

  "Managers don't talk to each other nearly enough about the content of their goals. They don't share how they do it with their peers." (B, 06:48)

• Fundamental Flaws with SMART:

  • S.M.A.R.T. stands for Specific, Measurable, Achievable, Relevant/Realistic/Results-oriented, and Time-bound/Tangible.
  • The hosts see issues with the multiplicity and vagueness of several letters, especially the R and T.
  • Organizations often end up with goals that fail to focus on the truly essential elements: measurement and deadlines.
  • Most goals labeled "SMART" aren’t actually smart, lacking clear metrics or timelines.
  • There’s a tendency toward over-editing for “specific/achievable/results-oriented” while neglecting the measurable and time-bound aspects.

  "Over two-thirds of the goals that I see developed by managers who have been told to use smart guidelines end up not being smart goals. They're not." (C, 28:26)

• Memorable Analogy:

  "If you set a SMART goal without a deadline, you’re in a 'weird parallel universe'…I simply do not see how you can have a goal that does not have a deadline." (C, 24:25)

2. Introducing MT Goals: Measurable & Time-Bound

(34:13 – 97:11)

• Core Recommendation:
  Focus exclusively on goals that are Measurable and Time-based ("MT Goals").

  "Any goal you come up with should…be measurable and…have a deadline." (C, 14:08)

• Why M & T Only?

  • Measurement and deadlines are what make goals real and actionable.
  • Everything else (specific, achievable, relevant) is either redundant or generally handled by context (e.g., bosses won’t allow irrelevant goals).

• Examples of MT Goals vs. Traditional:

  • Bad: "Improve outbound freight order processing to reduce negative impact."
  • Good: "Improve ship accuracy to 85% by October 30th." (C, 31:51)

• Iconic Examples:

  • JFK’s “put a man on the moon in this decade” – clear, measurable, and time-bound. (C, 32:00)

3. Practical Framework for Setting Effective Annual Goals

a. Six Recommendations for MT Goals

(45:06 – 75:08)

1. The Best Metrics Are Numbers

   • Use hard numbers; even for soft outcomes, create a quantifiable metric.
   • Convert abstract concepts to proxies or numerical scale (e.g., “number of customer complaints as a proxy for service quality”).

2. Zero Is a Number

   • Don’t be afraid to set ambitious targets like “eliminate X.” Zero, as a goal, can drive substantial improvement.
   • Example: "Eliminate waste due to shipping mistakes." (C, 51:15)

3. Consider Proxies

   • If the ideal metric is unavailable, use a closely linked proxy measure (e.g., survey responses, complaints count, referrals).

4. Consider Surveys (Caveat)

   • Useful if direct measurement is challenging, but may demand more effort.

5. Always Address Costs

   • Every manager should set at least one goal focused on reducing (or containing growth of) costs.

6. Avoid “Improving” as a Goal

   • “Improve”, “increase”, “enhance”, etc., are too vague—quantify the desired change.
   • "When you think goals, think targets." (C, 63:29)

b. Additional Broad Recommendations

(64:04 – 75:08)

• Stay Narrow:
  Focus on 2–3 key goals that matter most; resist the urge to impress with quantity.

  "Commit your life and career to the three big ones... take full credit for the rest, but the big three should be where you focus." (C, 65:54)

• Plan for Q4 Completion (by Q4):
  Set deadlines for the end of September, not December. This creates buffer for unexpected disruptions.

• Backwards Planning:
  Map out each step from the deadline back to the present, identifying dependencies and daily/weekly tasks to avoid “the Q4 scramble”.

• Front Load Tasks:
  Push to complete as much as possible early in the year. Use early momentum to beat slippage and allow for adjustments.

"Do your 12-month goal in nine months. If you can’t get it done in the first nine, chances are you won’t in the last quarter." (C, 67:12)

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4. The Story of John and the Gate Guards (The Epilogue)

(77:24 – 97:11)

Summary

John, a manager of facility gate guards at a Fortune 200 company, is overwhelmed when tasked with creating “metrics” for his team—which, by nature, seemed unmeasurable. Seeking guidance, he reaches out to Mark for “the book” of performance metrics.

Mark coaches John to focus on what actually matters for the job:

• Employees value friendliness (courtesy) and punctual gate opening (timeliness).

These principles are then translated into two straightforward MT goals:

1. Timeliness — Track the “number of complaints about late gate opening.” Set the initial goal at zero.
2. Courtesy — Check for smiles: John samples guards' behavior and records if they smile at incoming employees.

As Mark notes:

"If a guy like John... can make it as simple as how many complaints and did you or did you not smile... I truly believe that effective, measurable and time-based goals are in reach for anybody." (C, 95:20)

Key Lessons from John’s Story

• Start with the obvious: What's important to those served?
• Use proxies: Complaints and smiles can stand in for softer traits.
• Anyone can do this: No secret book, no special pedigree required.
• Simplicity wins: Ease of measurement drives adoption and improvement.
• Metrics can evolve: Once you hit zero complaints, start tallying positive comments instead.

"We don’t tie ourselves slavishly to an old goal if it doesn’t serve our purpose anymore." (C, 92:10)

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Notable Quotes and Moments

• On empty (MT) goals:
  "Measurability and timeliness are the only factors that count in effective goal setting." (C, 27:18)

• On setting a date:
  "A date is a number between 0 and 32 with one of the 12 months of the year next to it." (B, 40:46)

• On using imperfect metrics:
  "Don’t let perfection be the enemy of good here… just use the proxy, refine it over time." (B/C, 53:40–54:09)

• On staying narrow:
  "All of the great strategists... have as one of their core principles something that sounds like Napoleon’s mass at the point of decision, or Pareto… or Drucker’s admonition against three-ring circuses. Don’t come up with 10 goals. Come up with 3 you’d fall on your sword for." (C, 65:02-65:53)

• The John Madden moment:
  "That’s an MT goal... it just sounds good, doesn’t it? It’s John Madden’s BAM." (C/B, 31:54-32:00)

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Timestamps for Important Segments

| Timestamp | Segment / Topic | |---------------------|-------------------------------------------------------| | 03:34–07:10 | The drama and inefficiency of annual goal-setting | | 14:08–15:35 | What “MT Goals” are and why only M (Measurable) & T (Time-bound) matter | | 15:56–33:27 | Detailed breakdown and critique of SMART goals | | 36:58–43:11 | Rule #1 for effective goals: Use measurable & time-based only | | 45:06–45:56 | Six core guidance points for metrics and goals | | 64:04–69:21 | Staying narrow; planning for Q4 completion | | 69:31–73:53 | Backwards planning and front-loading tasks | | 77:24–97:11 | Epilogue – John and the Gate Guards Story |

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Final Wrap-Up

• MT Goals (measurable and time-bound) are the foundation for annual goal-setting.
• Focus on numeric metrics and clear deadlines—not wordy, vague ambitions.
• Use proxies and surveys as needed, favoring simplicity and practicality.
• Limit the number of annual goals to the few that deliver the most impact.
• Backwards-plan and front-load work to avoid year-end crunch.
• Anyone can apply this approach, regardless of the complexity or perceived measurability of their team’s work.

"This story alone is not a manager tool. It’s not actionable, it’s not deliverable, but it is uplifting and inspiring. And for no other reason, your people deserve it. Period." (C, 97:11)

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For Further Application

• Review your current goals: Are they measurable and time-bound?
• Eliminate vague verbs; replace them with numbers and deadlines.
• Share your goals and planning process with peers for collective improvement.
• Remember John and his gate guards: every responsibility can be measured and improved.

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End of Summary

Transcript

[A]

Hey folks, Sarah here from Manager Tools. And it's that time of year again. We're off celebrating with our family and we hope that you're off doing the same and therefore we're going to release to you a classic Manager Tools podcast, one which we always release around this time of the year. While everyone out there is starting to think about what they need to get done for next year today, how to Set Annual goals. We know that schedules fill up fast and let's face it, life gets busy. That's why you should start thinking about the events you need on your calendar in 2026 before that coveted time slips away on you. The M Conference is up for sale. Now you can plan early and start networking with the folks that will be there using our Group Slack channel, which is already available for use. Check it out today at manager-tools.com training to learn more information about next year's mConference.

[B]

Welcome to Manager Duels. Today's topic how to Set annual goals. Part 1 of 3. Hi everyone, this is Mike and welcome to Manager Tools. Many managers are going through goal setting efforts right now for 2008, and typically at this time of year we get lots of questions about goals and goal setting. Sometimes they're dispiriting. Managers spend an awful lot of time wordsmithing their intent into corporate frameworks. All that time would be far better spent thinking about goals themselves and how the achievement of those goals will help the organization. A lot of managers also have to create goals that are smart, and as you'll find in today's cast, we don't recommend your doing so unless you have to. We dislike them so much, we almost call this cast. Smart goals are stupid. Yeah, we really don't like them. In fact, we spent a good bit of our time in our introduction talking about smart goals, so beware. The fact that the technique is so widespread and so often ineffective causes us to want to dress it fully. And hey, who would have thought that our answer would be MT Goals? Yeah, right. Okay, here we go. I have something for you here. I have a soapbox just built just right for smart goals. So feel free.

[C]

Yes, well, I'll do my best to help you rein me in, but you don't like smart goals either.

[B]

No, you're right, I don't. But like you said, I take my role of reigning you in sometimes very seriously. So this will be no different and.

[C]

Our wonderful audience and I will thank you for it. Why don't you like smart goals?

[B]

You see, you're already inciting the ranting we're just getting started.

[C]

There you go.

[B]

Feel free.

[C]

Let your inner rant loose for me.

[B]

Yeah, yeah, Smart goals. Okay, so before we do that, let's just start more slowly talking about annual goals. When this cast comes out, folks will be in the middle, right smack in the middle of them all this kind of individual floundering happening.

[C]

Yeah, you know, it's very much like what happens around annual reviews. Of course, as we've said many times in the cast before, and for newer managers, they don't understand this, or newer people to large organizations, they don't understand that there are two types of corporations that in terms of how they handle any reviews, some do them on higher anniversary or date of higher anniversary or what have you. And so managers are doing reviews year round. And then most companies, I don't have a number for it, but I would say the majority, and perhaps even the vast majority, do them annually at the end of the calendar year. And so in the January time frame, there's this frisson of, of wasted energy of managers. I don't know, maybe it has something to do with being cold outside in the north. And so people feel like they're not gonna get anything done anyway. But really, when annual reviews are being done in companies where they're all done at the same time of the year, the entire mission of most organizations gets set aside to some degree. You just can't get stuff done because everyone is trying to figure out what their goals will be for next year. Or in the case of reviews, everyone's trying to figure out, okay, what's the appropriate verbiage? And can I say that for this guy? And who do I have to trade for that? And what is the boss and how big is the pot and how is the pie going to be touching base and making sure your mentors talking you up to your boss and blah, blah, blah, blah. It's the same thing happening when it comes to goal setting. You can just hear in December and early January, when bosses are saying, okay, you got to come up with goals mind boggling to me that the boss isn't saying, okay, let's sit down and talk about what my goals are and where you're going to fit in. But anyway, you can hear the inner voices of managers and best friends saying, okay, okay, here's the deal. Now you want to be high. I mean, you want to set a good goal. You want people to notice your goal. You got to be high. You got to stand out, but not too high. You know, you don't, you know, no no, no, don't, don't, don't overdo it, Mister or miss. It's got to be. That would be bad if it was too high. Gosh, a career killer. You know, you can't do that. You have a great year. And then your boss says, well, gee, sorry, no bonus for you. And you feel like your boss is a grinch. But of course, you did it to yourself a year in advance by setting a goal that was too high because you thought you would shoot for the moon. And so these managers saying to themselves, no, no, no, no, no. They're rubbing their fingers and thumbs together saying, we must do it just right. Just, just right. Just so. Yes, yes, we must, we must. And it's. It's dramatic, it's high drama, it's soap operatic. In fact, it's soapboxian, maybe. I don't know.

[B]

Wow. I feel like I just got done listening to a Dr. Seuss.

[C]

Yeah, I feel like I'm Gollum or something in the Hobbit. It is a slight dramatization, but sadly only a slight dramatization.

[B]

Yeah, yeah. Well, in my experience, because goals are the first step in the year later doling out of limited rewards, it becomes very personal, almost private, really. Managers don't talk to each other nearly enough about the content of their goals. Totally agree and not even process. They don't share how they do it with their peers. They don't pass on tips or even other last year's goals.

[C]

Yeah, people aren't sitting down together, are they? They're not saying, hey, look, what do you got? And you know, let's talk about it, and maybe I can steal some verbiage for you. In fact, you really touched a nerve on that one for me that what you just said is totally true in many, many places. And it is a sad indictment of far too many managers. Every once in a while, we get a note from someone that confesses to guiltily not sharing manager tools with. You know, they say, oh, you know, I want to get ahead. And I just, you know, I don't want them to know where I got all my smarts. It just seems wrong to me and frankly, sad. To say nothing of the fact that it makes organizations in general woefully inefficient in this regard that we're not sharing with one another. And that's not even it. I mean, there's another piece of this that's a problem for me as well.

[B]

Yeah. And I know what you're going to say, so you don't need to. When we say managers aren't sharing. They're not even sharing with the managers. Report to them. I mean, talking about being inefficient.

[C]

Yeah, you think about that. What's scary about that is that our process, which this cast is not about for goal development among managers is really kind of iterative. Right. It takes a few weeks. The manager, the director will talk about. The manager of managers. We'll call director, even though many people use different terms. But we're going to. In the US A manager of managers is often called a director. We don't mean a corporate director director as in board member, but we mean a director one level above manager and usually some level below vice president. As an example, a director is working with her managers for a number of weeks, batting back and forth. Okay, here's my purview. Where do you guys. Where do you all fit in? And then here's what I'm thinking, and let's make sure that we're all on the same page, because ultimately everybody, all of your manager's goals should fit in in a way that allows you to achieve your goals. And it takes a few weeks. Look, if you don't share, per your point, if you're not sharing vertically, you get a lot of sort of partially frozen kind of ice floes. They're kind of slushing around and bumping into each other. And it's just. You feel like it's terribly inefficient. There's no. There's no synergy. And you really need a process shift, or quite frankly, a business shift. Manager's thinking, oh, we have to pay attention. We better get aligned to get everybody moving in the right direction.

[B]

Yeah. Okay. But we're really talking about a different cast now.

[C]

Yes. Yes, we are. As if. As if there's not a lot to talk about with goals. Yeah.

[B]

I think our team process for goals is probably another topic. So let's share the basics for now.

[C]

Okay, good. We've really got three sections to this cast. An introduction, which. Which I think you tell me you disagree or disagree, but I think it's going to be long. Okay, then we're going to have. We've got three points we're going to make in the introduction. We've got. Then we're going to talk about how to create effective annual goals. And then we're going to finish with an epilogue. And so let me just go in a little more detail first. And that's in the introduction. We're going to. We're going to. We're going to do something a little bit unusual, a little bit of a departure for us because we have a long introduction. I'm not sure. I'm not sure we need to do this that often, but in this case I think it may be warranted. We'll see what happens. We'll do a little beta test here, which is we're going to start with bluff bottom up front and we're going to say that in the introduction. We're going to tell you the core of this cast is we recommend what we call MT Goals. Okay, then in part two of the introduction, we're going to tell you what smart goals are because there are some people who are listening. This is. What is this smart goal stuff? Well, we're going to walk through that so everybody understands. And then we're also going to tell you why we think they aren't smart. Or as one person says, you know, it's pretty harsh to say why smart goals are stupid. We're going to try to avoid the word stupid. But the fact is, even if they're not stupid, they're definitely not smart.

[B]

And you try hard not to be harsh. So.

[C]

Yeah, I do. I try very hard and sometimes I fail occasionally. I really am a nice guy.

[B]

Really?

[C]

Really.

[B]

Keep saying that.

[C]

Yeah, keep saying. It's a little mantra. I'm a nice guy.

[B]

I'm a nice guy. I'm a nice guy.

[C]

Yeah. How to get part two the meat of the cast is how to create effective annual goals. We're going to start with using MT Goals. We'll go into a great deal of detail there, talking about goals and proxies and so on. We've got a series of, I think we've got six sub points to using MT Goals and then further some guidance regarding the goal setting environment you're in. We're going to recommend that you stay narrow, that you plan for Q4 completion. That's fourth quarter completion. We recommend you do backwards planning, which again is another cast all by itself. We want to introduce it here. And then we're also going to talk about front loading tasks. And then I mentioned the epilogue. We're going to share what I call the story of John and the Gate guards, which is a really neat true story from my consulting experience about a great manager and an experience I had helping a manager see the simplicity of goals and how to use them and his transformation from somebody else owns all the goals and I have to go pay for them sort of to, wow, it's not as hard as I thought. And I hope that many managers Listening now will say after they hear that and after they do goals this year will say, wow. Okay, he's right. It wasn't that hard. So that's it.

[B]

It's a great story. So, okay, so let's start. So let's start with bluff. This, like you said earlier, this is a little different for us, but I like it because our introduction here is a bit longer than usual. So the bluff for this cast is we recommend MT goals now. And everyone just stop the groaning right now because there you go. Full disclosure, we were using that name long before manager tools ever came into being.

[C]

So stop and groaning. Yeah, in much the same way that we recommend in a hot wash exercise that we use what went well. And take a look at. We had the WWW over the world wide web long before the world wide web dip. Just so everybody knows, we did not trademark it, much to our chagrin. But yes, we do recommend MT goals. And we are absolutely at our very soul opposed to the idea of creating acronyms that end up getting twisted around as much as a pretzel just to give somebody a convenient mnemonic so they can remember things. I hate them.

[B]

Yeah, but we're lucky in that we have one we didn't even have to try. So, okay, what are MT goals?

[C]

Simple MT goals are just the M and the T of the smart goal concept, which is to say measurable and time bound. What we mean when we recommend MT goals is that any goal that you come up with should be by definition measurable, which we'll describe in detail later, and it should be bound by time. In other words, it should or we recommend it have a deadline. Okay, now look, the reason we recommend those two is that they really, truly are the heart of the smart goal concept. We're going to be blunt here. Fancy that. And say that not too many managers go around coming up with non specific goals. The measurable part of MT usually eliminates that. Furthermore, there's enough reason not to come up with unachievable goals that the a part of smart goals isn't really necessary either, nor is the word relevant. Your boss will absolutely keep you from coming up with irrelevant goal in my experience.

[B]

Maybe.

[C]

Maybe, maybe, maybe. Yeah, I promise she will. The only two tenants of smart goals that are inviolable are measurable and time bound or time constrained. And that's where you should spend. We recommend you spend all of your energy.

[B]

And we can go on for hours. But we will. People know us by now, but this is just a quick bluff. So everyone knows the core of the show this week. But let's get on with the rest of the introduction. We want everyone to know about smart goals because really, I mean, they're just all over the place.

[C]

Yes.

[B]

So what are smart goals?

[C]

Yeah, this is a little bit unusual, I think, for us to talk about something that we disagree with. But I think it's instructive. You cannot turn around at the end of a calendar year or at the end of a fiscal year in some organizations without hearing people talk about smart goals. Right. In fact, there are some directors and managers and vice presidents and so on who act as if they're delivering manna from heaven. Oh, by the way, this year we're going to use this new concept I just read about. It's called smart goals. And this is no ageism implied here. This is a 55 year old VP saying, I just learned about smart goals. Where were you when we invented fire? Okay.

[B]

Be the nice mark. Nice.

[C]

Yes, that's right. I'll be the. I'll be the. I won't be the dark mark. But let's spend a minute and let's walk through what the acronym stands for. And we've already really alluded to it and then we'll talk about why it works and why we believe it does not work. Okay. Smart is an acronym that stands for specific, measurable, achievable or attainable, which I think is essentially a fair exchange. Achievable or attainable or large or the same thing. The R is relevant or realistic or results oriented. Very bad sign there three different Rs, all of which mean different things. And the last one is time based or tangible. I can't wait to talk about tangible. Okay, so let's talk about each one these for a minute. Okay. So specific. What that means is that your goal should address something direct and related to your work that is easily understood and is not as broad as if I do this one goal, I will have achieved everything else. Specific is designed to get managers to think about their organizations, their purview somewhat granularly. And it really encourages, and I would argue in a good way, it argues for smaller, more clearly understood goals that aren't tied to 17 different measures. They tend to be easier to understand. So that's what specific means. Measurable simply means that you can measure it. And we're going to talk later about the word improve. I see that that is the most used word when it comes to goals in annual reviews and development plans. Improve my X, improve the organization's Y or something like that. It's just the worst word in the world. And it is absolutely not measurable in any real sense. There are people who will argue, well, Mark, technically it's measurable. If we had $100 in sales and we went to 101, I improved sales. So technically I achieved my goal. The definition of a goal is not better than the previous performance. The definition of a goal is a difference between your performance and the new performance, and improvement doesn't do it. So anyway, measurable means usually there's a number associated with that, and we'll talk more about that later. Achievable or attainable just means you don't say the company is going to double in size next year because I, as a purchasing manager is going to help it do it. It just doesn't work that way. There's nothing wrong with Reaching for the stars. Although, to tell the truth, we are not going to recommend that in this cast. Right? I mean, we really can't tell people in this cast with the breadth of folks we have listening, that they should swing to the fences. Because too often in too many organizations, there's a chance that those fence swingers will be punished because they didn't achieve their goals. Even though, in fact, the majority of organizations respond to goals at the end of the year with a polite disdain and don't seem to go back and revisit them unless they need ammunition to get somebody in trouble. The R is a particularly interesting one. R stands for relevant or realistic or results oriented. I hesitate to describe all three, define all three. But relevant means, well, it's related to your work. Okay? Guess what? Your boss will take care of that for you. Realistic, I think, is addressed by the whole achievable thing. Either it's achievable or it's not. And if it's not achievable, it's not realistic. And then results oriented. And I think there's some value in that one, in the sense that you, you want to make it something that is, you're not measuring the first step, but you're measuring an output for your organization. You're not just going to measure whether or not you do one on ones. You're going to measure retention. You're not just going to measure feedback. You're going to measure improvement or you're going to measure performance versus a known standard. And feedback is the way to get there.

[B]

That's the only R that ever made sense to me. The other two just.

[C]

Yeah, the other one. But look, go to the web. Go to the web.

[B]

Dude, I did yeah, you're right. It's there, it's all over.

[C]

But my favorite one is the T for time based or tangible. Okay. I just really think somebody in HR got a hold of time based and said we wouldn't want to scare anybody by putting a deadline on these things because that would be bad. Right. It could be replaced with tangible. And really I'm kind of getting in here. Why do we think they aren't smart? But anyway, the idea of all of these is that if you subject the goals that you write down on paper to this test of smart, and if it meets all five tests, it's a good or worthy goal. And I want to caveat that a little bit by saying if a goal that you set actually meets the smart criteria, it is better by definition, I believe, than the vast majority of goals. If in fact you meet all five and you're not kidding yourself is going to be better than a goal that doesn't meet those five. So I believe it is an incremental improvement. The problem is it's treated as if it is the synchronon of goal setting. Oh, well, you know, if we're going to do goals, then we've definitely got to use smart. And this is said by a billion, the CEO of a billion dollar company. That's like saying, you know, if we're going to do math, we really need to use a calculator and not an abacus. Okay, good call there. Right.

[B]

But as you said, but as far as they go, they're not bad. So why do we think they're not smart though?

[C]

First, you're right. As far as they go, they're not bad. If every manager, like I said, if they tried smart goals and they didn't have any idea what they were doing, and that is a lot of managers in my experience, when it comes to goal setting, we'd be a lot better off than we are right now. It makes people think about their goals and the metric, though it is often hilariously applied, moves folks towards something that will create better results in the long run. Okay, but let me just tell you a couple of things that I think are really misleading and quite frankly ineffective. And if you want to use a short word, just plain bad the whole time based thing, it could be that people would, that would go to a website or something not knowing any better. Some manager says to, to his admin, he says, hey look Bob, go out and get some stuff on smart goals because we need them, because we got to do goals again. And I haven't been in this job that long. I got new people. I really know what the. You know, we got to get to know them better. So let's do smart goals. And Bob goes out, and he happens to fasten himself to a website that doesn't use time based. He use. They use the word tangible. And I think at one website, it's in something like you can touch or something you can feel, as if. As if a. As if getting improving or Getting sales of $50 million is something you can. Or touch. I don't know. That's a pretty vague use of the words feel and touch. If every manager. I'm sorry, but if every manager set every goal that was totally tangible and realistic. Now listen to this. Now, if every manager set every goal that was totally tangible and realistic and specific and achievable, and none of them had any time constraints, you're talking a monumental disaster. Maybe I'm crazy, but I simply do not see how you can have a goal that does not have a deadline. This is like some weird parallel universe. Oh, time doesn't exist here if we have everything else. And I set one of those goals. One of those kind of goals. A smart goal, but it's not time constrained. And my boss dings me for it halfway through the year, all the way through the year, I can simply say to him or her, hey, I'm not done yet.

[B]

Yeah, and I'm your boss, and I say, well, I need to be done for this other stuff. We're good. We're doing.

[C]

And I say, dude, now, now. I probably wouldn't say dude to my boss. Now you're being unfair. We agreed on this goal. You said this goal was okay. It's the whole smart thing. Tangible, right. It is tangible. Right. And now you're punishing me because I need two more months here at the end of the year.

[B]

Look, I never thought it was gonna take you this long.

[C]

Well, neither did I, but time isn't one of our criteria, boss. The T in smart stands for tangible. Let me tell you something. I can taste this stuff.

[B]

Oh, God. Okay. Well, we could probably go on for hours with this one.

[C]

I can defend myself pretty well. If you're my boss and you don't put a deadline on my work, let me tell you, I can string it out. We're gonna be here a long time. Yeah. Look, bad bosses complain that their directs do that very thing. And the bad boss was essentially complicit in the beginning by not putting a deadline on it. And I'll tell you, I've actually Had HR people say, when it comes to coaching, when it comes to these big things, we better not put a deadline because it can stress people out. And, you know, I don't know, maybe I'm alone, but I'm the boss who would look at them and says, if stress makes them do better, I'm okay with that. In fact, I told an HR person once, Mike, I said, look, you know, there are two types of stress, right? And they said, no, no, no, no, no. What do you mean? I said, there are two types of stress. No, there's not. I said, yeah, there are. You just need to do some research. And I said, there is distress, which is stress that causes the body to engage in fight or flight mechanism and tends to overly tax the brain and the body. And then there's something called eustress, spelled eu. And then the word stress, which is a heightening of what you feel before you have to sink an important free throw. Or when Michael Jordan says I want the ball. When all your senses are attuned, that's a form of stress too. The whole no pain, no gain thing is all about stress. You stress your system and the system improves because of that. But I've actually had HR people say, no, no, no, no deadlines. We don't, we don't want stress here. Like, man, how do you think the CEO got to be CEO? It's because she's been stressed for a long time and she stepped up because of it. In fact, her tolerance for stress has greatly increased because of that. And look, I'm overplaying it to make a point and I apologize for that.

[B]

Put your hands in the air and step away from the soapbox.

[C]

There you go. Put my hands in my pockets. As a friend of mine, I told Neff Hudson once, I said, look, you know, when things get hot and heavy, hands in your pockets. Measurability and timeliness are the only factors that count in effective goal setting.

[B]

It's not like companies are measured or need to be sensitive to time. Right? Come on.

[C]

Yeah. The whole idea of having to produce a financial report which is a big fat pile of measures on a certain timeline just absolutely flies in the face. The idea of specific or achievable results oriented. It's all about measurability and timeliness. Look, I'm just getting started to how do you balance relevant, realistic and results oriented? I mean, you know, you go, like I said, I went out there to like 20 websites and I looked and they're all over the map again. You know, I'll Say it one more time. You don't need realistic goals if they're achievable and attainable. If they're achievable and attainable, then they are realistic.

[B]

Yeah, okay, but here's what's going to surprise everyone. That wasn't even your real issue with them.

[C]

No, that's not my big issue with smart goals. I disagree with the concept as being intellectually flawed. Okay? And I acknowledge that there are plenty of intellectually flawed ideas that work, that provide value, that deliver with the same amount of time, more value than an unstructured, unfocused, undirected effort. Essentially a very inefficient effort. So smart goals do make us slightly more efficient. Of course, efficiency in the service of ineffectiveness is not a very good thing. But my big issue really is something process related and not definitional. Look, here's my fundamental issue. Over two thirds of the goals that I see developed by managers who have been told to use smart guidelines end up not being smart goals. They're not. Now wait, you say wait, how can that be? Their bosses wanted smart goals. Yes, they were told what smart goals were or they were asked to go find out. And of course, individually, of course, no group help going on during this process. And then they put those goals together. I mean, you can find it. Look, we happen to like Google. Just Google smart goals, folks. There's a bunch of them and you'll get the response back in 0.19 seconds or 0.019 seconds. So. So they, they put their smart goals together, or what intelligent people believe are smart goals. They sent them into their boss and she either read them or, or she met with the direct, or the direct met with their boss and their boss went over those goals. And then for some reason, some consultant was called in and they were still not smart goals. Yes, I submit to you, no, they were not. In fact, I always wanted to say that. Yes, I submit, no, they were not. Sounds like something I would say on the witness stand. Yeah, two thirds of the time they're not.

[B]

Yeah. And here's the really, really sad part. With the two most likely ports of the smart to be violated, are the two most critical ones measurable and time constrained?

[C]

Why is that? Because they're the important ones. They're the hard ones. They know. Look, why would you want to worry about the, why would you want to spend a lot of time on those? Because those, the ones are going to actually catch you.

[B]

Right, Exactly. Those are the ones that prevent you.

[C]

From actually a lot of time worrying Wordsmithing, editing for the other characteristics because they don't know exactly what specific or achievable or results oriented or relevant or realistic for that matter means or have them for fend tangible. Okay. It ends up being more words meaning a great deal less. Let me give you an example, Mike. It's the difference between improve functions and outbound freight order processing to reduce negative impact of not meeting 80% ship accuracy, plant standard and an empty goal. Improve ship accuracy to 85% by October 30th. Period.

[B]

I like that. Now that's an MT goal.

[C]

Yeah, it just sounds good, doesn't it?

[B]

Yeah, absolutely. It sounds like John Madden saying bam.

[C]

Yeah, it's bam. And you know what, you know, we have so many international listeners and I would love to hear some international examples of this. The one that is most that comes to mind most clearly culturally in America is John F. Kennedy as president saying we will put a man on the moon in this decade. And you know what, if he didn't say in this decade, that didn't happen in 1969. It's just not. Yeah. And, and by the way, man in the moon. Man on the moon, quite measurable.

[B]

Yeah, yeah.

[C]

Either he did or he did not.

[B]

Yeah. That's why that whole first step was so important. He, Kennedy would have failed one of his goals. So you want to make sure the whole first step thing going.

[C]

And look, here's the beauty of that second one and I just want to repeat it because it has such a. It's the BAM. It's the. It's John Madden's BAM. As you said, improve ship accuracy to 85% by October 30th. Here's the cool little secret about that short little MT goal. It is also a smart goal. It is specific, it is measurable, it is achievable, it is results oriented and it is time based by definition. I love that.

[B]

Yeah.

[C]

But if you spend a lot of time worrying about specific and achievable and results aren't it and you don't get to measurable and time based smart is killing you.

[B]

Right.

[C]

You need to get rid of the time spin on S and A and R and focus on M and T. Yeah. Having nothing to do with manager tools.

[B]

Yeah. Cool. Well, okay folks, so we apologize a little bit for the length here. But yeah, we just want you all to understand the smart process because you know it's possible that it's going to be coming to a neighborhood near you.

[C]

Yeah. And look, the fact is not everybody uses manager tool stuff. We respect that and understand it. And it's not like every manager at Walmart, the biggest company in the world is using smart goals and yet they tend to be doing pretty well or they're not using mt, but they tended to be doing pretty well. Right?

[B]

Yeah.

[C]

So we understand that many of you will have to consume smart goals. And you might as well know what our take on it is and what we recommend you do around smart goals.

[B]

Okay, so now the soapbox disappears, we stick it under the desk and we move on to the core of our show. Our recommendations for how to avoid the stupid trap of smart. So let's cover how to create effective annual goals now.

[C]

You know, just before I let go of my soapbox, I just want to tell everybody, I don't know if any I've ever said this on air. I think I have. I actually do have a soapbox. It is in my living room. When I was at Proctor, they gave away gifts and it was one of the. It was a replica of a wooden box that was used to ship soap from the riverfront in Cincinnati. And every day I walked by it ten times a day. I couldn't stand on it. I'm too big and way too much.

[B]

But yeah, good. Thanks for sharing. Well, there you go. We'll end it there for this week's show and we'll continue next week. If you're thinking about signing up for the Chicago Manager Tools effective manager conference March 25th and 26th in Chicago, you'll want to do so quickly. We literally have less than a handful of slots left, so if you have your heart set on it, you might want to do it really quickly. We'd love to be able to put more than 100 people in the conference, but we just really can't deliver an effective experience that way. So there you go. Thanks everyone for a great 2007. I can't tell you how much Mark and I are just loving what we're doing and everyone listening here is a part of that. So thank you very much. We had a great 2007 and we're looking forward to even greater things in 2008. I hope you stick around for it. Alright, we'll see you all next year. So long. Welcome to manager tools. Today's topic, annual goal setting part two of three. Hi everyone, this is Mike and welcome back. Today Mark and I continue our conversation on annual goal setting. Last week we covered our general views on goal setting, in particular on our thinly veiled disdain for smart goals. Focus on the measurable and time bound nature of Goals. And in our opinion, you'll be there today. We go on to discuss our core rules or guidelines for setting goals. So here we go.

[C]

Okay, look. How to create effective annual goals. Rule number one. We talked about this in bottom line up front, right in the beginning of the cast. Use mt. Measurable and time based goals. To be clear here, we recommend that you ignore all guidance relative to smart. At least the S and the A and the R. Focus only on the measurement and the deadline. That's it. The secret, of course, is that no one, I alluded to this just a minute ago. No one is going to accuse an MT goal of not only not being smart because they are. People are going to see that and go, wow, that is cool. That's good, I get it. They will also be impressed by the simplicity your work. And the more you add the S and the A and the R, the more words you got and the more tangled it is and the easier it is to hide the lack of the M and the T. And professionals don't want to hide the M and the.

[B]

T. Yeah, can we expand a little bit on the M and T?

[C]

Yeah, let me just start with the T. Time based because it's easier. In fact, it's not just easier, it's trivially simpler. Every goal has a deadline that is a specific date within the coming calendar year. The easiest way for a savvy boss to see a time based goal is to look for the word buy in the goal. Now look. So in other words, it would be buy blank, Right? Okay. There are people out there going, no, no, no, Mark, I don't actually need to do that if you leave it off. What I'm saying is the implied goal is December 31st. Okay, I'm sorry, but that's not really what most managers mean by leaving the goal off. What most managers secretly mean by leaving the goal, the deadline off is that they want full credits for getting most of the way there during the year so that they don't get there. They'll be judged on progress as opposed to success. And success is simple. Did you achieve the measurable number by the deadline? If you did not, you failed. And everyone knows that maybe one goal out of a hundred actually is inspiring enough, even to its own author, quite frankly, to get everybody to come in the last week of the year. And when this cast is coming out, that'll be in the near term, future surely, to make sure you get there. So if you leave off the goal, what you're saying is if you leave off the deadline, I'M sorry, if you leave off that deadline and you're Suggesting that implies December 31st, I better see you in the office every day from December 26 to December 31, working feverishly because you knew that goal all along was December 31st. The fact is, we don't see. And the reason we don't see that is because managers don't really mean what they say they mean, which is, I meant December 31st. What you want is to be let off the hook because there wasn't a specific deadline attached to it.

[B]

Yeah, we'll talk more about when. When we recommend the deadline here shortly. But the short answer is an empty goal. A good goal has a deadline, and that reads as by blank date. Fill in the goal itself. No implied dates, actual written dates on every goal. And I'll add, not Q3. That's not a date.

[C]

Yeah. Q3 is not a date, is it?

[B]

No. A date is a number between 0 and 32 with one of the 12 months of the year next to it. That's a date.

[C]

I totally wish I'd said that. A date is a number between 0 and 32 with one of the 12 months of the year next to it. Partner. That is sweet and is more.

[B]

What about measurable?

[C]

Okay, boy, that's good. 0 and 32 of the month. I love that. Okay, first, when we talk about measurable, I have to say that in our epilogue, the story that we're going to share about John and the gate guards, we're going to address measurable pretty neatly with this story about this great manager that I know. Until then, though, let's start with this. Measurements are so important to goals that we must be willing to create new ones if we don't already have them.

[B]

But let's go back a step here for everyone. Let's not get everyone running off creating goals if they don't have to.

[C]

Okay, but wait. You and I both know that next year, if we start asking them about measurable, people start doing empty goals, they will be doing that very thing. They will go out and find specific. They will create goals. They will create deadlines and measures. Measures really being the key part. They will create measures to get to the goals based on our approach. Right.

[B]

I don't dispute that. I just think that we have to start by saying that the best place to start thinking about goals is where the organization already has measures in place.

[C]

Oh, you're so right. Yes. Okay. Greatest management principle in the world, right?

[B]

Exactly. The things that get measured are the things that get done. Companies measure the Stuff they care about. I mean, we know that, right? Already today, your company, or listening, is measuring something. They're measuring the stuff that they care about. We measure financial matters because they matter. Obviously.

[C]

You know, it's interesting about. You say you pick financials first. You know, they're not just that there are laws about it, but that's the scorecard, right? I mean, that's what everybody reports. That's the thing that everybody sees. Of course you have. I mean, there are people who don't want to go into finance because they don't understand it because there are so many measures. Right.

[B]

Most of the world. That's why the company exists in the first place.

[C]

Yeah, exactly. Okay, so we measure financial stuff because they matter.

[B]

Right. And then we start measuring those things that most closely influence those financial matters, and then those things that influence those things, and so on and so on. So the bottom line really is, if you're wondering what to set goals on, start with those areas that are already measured and achieve a higher standard than what has previously been set or achieved. Simple.

[C]

Yeah. You know what? What you just said is the first rule of setting MT goals. Choose goals in those processes and systems for which there are already measures. Because it's very likely that those areas, by the definition of that they have measures, are more important generally than those areas where there are not measures. Basically, I think what we're doing, what we're saying here, partner, is I would have had everyone off setting up new metrics so they could plan a goal against one of those metrics, all the while spinning energy away from where they might best need their energy to be. So brilliant.

[B]

Thank you, sir.

[C]

Okay. Okay, so now I want to go back to something I just said. Metrics or measures are just the criteria that we use. Goals. And this is maybe vocabulary a little bit here, but goals are the actual number we're going to achieve of that metric. Let's not confuse the words by saying we met our metric. That's like saying we met our inch. Doesn't really sound very good. Metric is what we're measuring or how we measure. And the goal is how high or how low low we have to go to say we succeeded. So we know to start with those things the organization already has metrics for per year. Brilliant point. First rule of MT goals, Then we ask ourselves what we believe are the most effective things we can do to achieve our mission, which, as we say, is likely to be those things we already have metrics for. Once we decide what those areas are, we either set a standing we either set a standard against an existing goal or we create a new metric.

[B]

Okay, so let's talk about our guidance for setting goals in general for a minute.

[C]

Okay. We actually have six recommendations.

[B]

This is a.

[C]

This is going to be a long cast, I think. It's not that we're not having fun though, that's for sure. I had a soapbox for a few minutes, six recommendations about goal setting in general relative to MT goals. And then we have. We even have more broad recommendations here in just a minute as well. So our six MT recommendations are. The best metrics are numbers. Zero is a number. Number three, consider proxies to get to a number. Number four, consider surveys, although there's a caveat with that one. Number five is please reduce costs. And number six, avoid improving things she.

[B]

Talked about for a little bit. Okay, let's talk about them one at a time.

[C]

Okay, so the first one, the best metrics are numbers. What we mean here is that even if you're measuring something very soft, like customer satisfaction or corporate reputation or service experience, right. How does a customer describe the experience? You're going to want to have a number to describe your goal. It could be as simple as counting the number of positive emails you've gotten on one trivial level. It could be the number of surveys that come written surveys that come back to you with a perfect score. It could be the number of surveys that say that you're likely or very likely to recommend somebody. It could be the number of people who say that they got. I mean, it's actually a number, the number of people who say they were referred to your company by somebody else. And you have to. Have to have a way of capturing that number. All of those things are numbers that are designed to represent something that quite frankly, is impossible to measure, which is how do our customers, in this case with the example we're using, feel about us? Is it fair to say we want our customers to feel great about us? Yes. A great example of a number which also relates to our concept about proxies, which we'll talk about in just a minute, is the ultimate question, Reichelt's book that you and I both like, which talks about your Net promoter score, which basically says on a scale of 1 to 10, how likely are you? And I may get this wrong because I don't have the data right in front of me, but how likely would you recommend this company or this work to someone else? And basically you take the number of tens and nines and you subtract the numbers of sixes. And below. And that gives you a number from negative 100 to positive 100. And that gives you a score. It's not to suggest that the score is what customers think about you. It is a number. It is a representation of something. But what we find is metrics that are respected, Metrics that are paid attention to are ones that have numbers. And I'll tell you a little trick trick that I use when it comes to numbers or when it comes to metrics. If you know immediately, you could put it into a graph and you could chart where it is now and where it has been and where it's going. You know, you have a number. How people feel is something really hard to put into a graph. I'm sure there's somebody trying to do it, but I think it's pretty hard. Okay, so the key here is to recognize that you're going to have to show performance probably over time, and your boss is going to want something that is understandable to him or to her. Everybody understands numbers as a part of the process of measures and metrics. And everyone understands when you say, I'm at 80, but I need to get to 83, the fact that one of your competitors calls what you're at 80, they call it 87 is irrelevant. The only question is where you are now, where you were and where you're going to be saying, we're getting there or I'm feeling good about this is not sufficient. You need a number.

[B]

And zero is a good number.

[C]

Yeah, zero is a very good number. What we mean by zero is a number is. If you're trying to reduce something, please don't use the word reduce. First of all, driving it to zero is the ultimate form of reduction. Right. It's not reduction ad absurdio. It's. It's actually a good thing. Driving it to zero is often a good goal. I mean, you. In fact, that was one of your goals when you were running osis, right?

[B]

Yeah, exactly.

[C]

People thought you were crazy to take it from 650 plus down to zero. And the fact is, the point of you setting at zero was what caused people to get down to seven. If you'd set it at 200 or 300, they probably gotten close to 200 or 300. They would never have gotten down to seven in terms of eliminating trouble tickets on an enormously complex, terribly Byzantine system.

[B]

Yeah, well, we failed, though. We only got it to seven.

[C]

Yeah, we failed. We got to seven.

[B]

How exciting is it to talk about getting down to. If you're talking, in this case, trouble Tickets. How exciting is it to say we're gonna go from 657 down to 200? Well, there's no emotional content there. Zero sounds good.

[C]

Zero increases the pucker factor, doesn't it?

[B]

No. Yeah.

[C]

Like hula. Yeah. And there are people who say, don't ever set a goal of 100 because you can never get there because there's always a chance. No, no, no. The good people say, I want the ball late in the game. The good people say, no, set it at zero. Man. When I get down from 10 to 1, I'm really going to push doubly hard to get from one to zero. I want five minutes at zero just so I can say I did it to the next guy who takes over my job after me. Yeah, yeah. If you're thinking about reducing something, consider, even if just for a moment, the concept of setting the reduction target or the goal at zero. Maybe it's not smart cost benefit wise, and we respect that, but it may just be doable with some outside the box thinking. I happen to really like the word eliminate.

[A]

Eliminate.

[C]

It's such a clear and powerful word. Eliminate Rand dollars. Eliminate waste due to production overage. Eliminate waste due to shipping mistakes. There's no ambiguity about it. Unlike perhaps some other words we're going to talk about today.

[B]

Yeah. Okay, so let's talk about proxies. What is there to consider about proxies and why do we need them?

[C]

Yeah. Too often I find that managers just flail at what kind of goals they could come up with. They don't know how to measure something. They think that the thing that they do, whatever their organization does, provide customer service, provide engineering services, provide production development, product development or marketing or whatever. They think that what they do is too big or too diffuse or too soft or too hard to describe to measure. Or it's like the Supreme Court. Potter Stewart, on another topic, which is I shall not attempt to describe what it is, but I know it when I see it. Okay, look, managers, you're not the Supreme Court, the United States Supreme Court. You're not a justice. You don't have life tenure. You've got to measure stuff to set goals around it. Using proxies just means measuring something else that you believe is an accurate representation without actually being the thing itself. You could measure the number of complaints to get a measure of quality. It's not that you care about complaints, it's that you believe less complaints means higher quality. And there are some places who say we don't have the systems in place to measure Quality. But you can certainly measure complaints, can't you? You, you can have a company 100 years ago that had no quality systems at all, didn't know anything about the very basics of quality, about designing it in, about getting it on the front end, about AQP and things like that. They could still measure complaints and arguably could say lower complaints is a proxy for better quality. And if you have a large enough sample size, it is in fact a good proxy to measure by. It may not be perfect, it may not be measuring every dollar that you waste on low quality products that you can't ship to a customer. That's an even better measure. But proxies may not be perfect. They're simply better than nothing at all. And we recommend managers consider them.

[B]

Yeah. And don't let perfection be the enemy of good here. I see this happening all the time, which is it's not perfect, therefore I can't use it. Well, you know. No, you can use it.

[C]

Yeah, you can. Yeah. In fact, we talk about this all the time, about the difference between being right and being effective. Yeah. It's technically not a 100% accurate measure of what we do. Yeah. But it's better nothing.

[B]

Right.

[C]

Let's put our toe in the water and see how it feels.

[B]

Right. And refine it over time. Yeah, okay.

[C]

Yeah. You could measure total new orders as a proxy for sales growth. Now obviously that may be a bad example because you're thinking, well, I could also measure sales growth. Yeah, you could, but in some places it's hard to do or it lags the market or whatever. In fact, in the technology market, there's the technology markets and high, high tech, high dollar equipment, there's something called book to bill ratio. They don't even tell you the sales numbers. They tell you the book to bill ratio, which is how many booked orders they had versus how many they billed. And if the book to bill is greater than one, that means they sold more orders for future delivery this month than they actually delivered this month, which means business is growing. So book to bill is a form of proxy to talk about future earnings versus present earnings. You could measure new housing starts as a proxy for economic improvement. And by the way, they do, in fact, all metrics, at least in the U.S. i'm sure, overseas as well, all metrics talked about relative to our economies are only proxies for the economy. And you'll have two economists arguing two different proxies and suggesting two different things about the economy. And it's basically an argument about which proxy is a More accurate proxy. And by definition, it depends on the size of the sample and the size of population and a bunch of other stuff as well. So any metric relative to our economies are only proxies for the economy. Now, housing starts is a measure of housing starts. Foreclosures are a measure of foreclosures. And IPOs in the marketplace are a measure of initial public offers. But they can also be used as proxies for the larger market in the same way that you could come up with a proxy like. And the example I'll use again is reduced customer complaints. Number of customer complaints doesn't mean quality is going up, but it is an indicator and it's worthwhile if you have no measure to consider using a proxy.

[B]

And then surveys are simply a form of proxies.

[C]

Yeah, exactly. Nobody's job is to improve survey results. Right. Companies don't say, we're going to have really great survey results. They're going to say, we're going to have great profitability. Surveys are a way to measure something that we don't have other numbers for. If you're in customer service, you may have to survey customers. Come up with a number. You may have to survey an internal customer about their standards for you serving them if there's not an external competitor for the work that you do in your company. Now, look, surveys are generally well received as measures about which you can set goals toward. But they're also a lot of work, and we don't recommend them first on anybody's list. But in some cases there's something to consider and what you don't want to do is go to your boss and say, I don't have any goals. When in fact, you could probably create a survey. And it may not be the best survey in the world, but it's something that will give you some proxy that will help you measure. And if all of a sudden the number your first year is 40 and you say, look, I'd like it to be 30 next year, if people believe in the proxy, they'll figure out a way to get it to 30.

[B]

Yep. And how about reducing costs?

[C]

Oh, who cares about reducing costs? Right. All that means is your margins go up. And who really cares about margins? Companies aren't about margins.

[B]

No, they're about margins.

[C]

Yeah, look, we're kind of cheating here, but it sure seems like a lot of managers. When I look at goal sheets and I'm talking this time of year, I've got 500 of them near my desk, on my desk, on my way, on their way to me or leaving the office. A lot of managers miss cost reduction as a fabulous annual goal. They just miss it. It's just, well, we're going to do personnel development. We're going to do this, we're going to do that. What about taking your budget and say, I'm going to cut 3% out of my budget while delivering the same results I did last year? That's real. I mean, you talk about. And that's not a 3% improvement in margins. That's more than a 3% improvement in margins. We're joking a little bit. Using the word reducing, it's not a great word. And we'll talk about that in just a minute. Although that's what most managers would probably talk about. I need to reduce my costs. No, you need to choose a goal and drive your costs below that goal. That's what you to do. We recommend that every manager every year have a goal relative to costs. And of course, by definition, the cost would. The goal would be reduction.

[B]

Yeah, I do that all the time. I had one that said, I'm going to reduce my cost to below what they would have been otherwise, which would have been an increase, so. Really?

[C]

Yeah, exactly. Yeah. In a growth market, your goal is to grow costs more slowly than you grow revenue. And people say all the time, well, I look at the last 10 years. No, I'm sorry, wrong. Most managers don't look 10 years back. They look back the past two years and they say, my costs keep going up. Okay, what has been the rate of growth? Can we shut that down by a third? Can we decrease growth from 3% to 2% if everybody decreased cost growth from 3% across the board in the organization to 2%, wow, what a difference would that make? And it's totally additive, year over year, the next year you go for 2% versus 3%. I don't do that. I don't want to do the math, but somebody please email us and tell us what the difference is in terms of at the end of two years, achieving 2% cost growth rather than 3% cost growth. It's not trivial. It might mean a bonus for certain managers who were particularly good, creative and effective at setting good goals and then actually achieving them for cost reduction. Maybe it's just to reduce the increase of salary costs below the increased levels of previous years. Again, as you said, even if costs go up, if yours go up less than others, that's a start. Now, for some managers, the bottom line here is to know your costs. And we recommend each manager have at Least one goal that attacks one or more of your costs. If you can't go after all of them because for some reason you're not in control of salaries, choose of all the costs that you control, the biggest contributor and attempt to either slow its growth or reduce it in real terms rather than just improve. Increasing a reduction in the increase.

[B]

Good. Okay, well, our next.

[C]

Miss it. You've got to have. If you're going to be a professional manager, you've got to have reduction of costs against a goal. Don't get tied around the axle around reduction. You've got to have reduction of cost against a goal as one of your objectives, one of your goals.

[B]

Agreed. Okay. Finally, and this is just going to drive people crazy because we actually recommend avoiding improving things with goals.

[C]

Yeah, we hate improving things. We're just having a little vocabulary fun. We do want things to improve, but we hate that word. In fact, one of the words I hate the most in the English language is thing. Thing is just about the grossest, the largest, most vague word in the language. That thing over there. You know, any more specificity than thing helps the listener enormously. Well, the word we hate the most when it comes to goal is improve. Amazingly, and this is what's stunning to me, with all the smart goal discussions going on out there this time of the year, I'm assuming this cast is going to come out in December. That time frame. This has got to be the single most used word in goals in the universe that I read. And again, maybe I'm in a parallel universe. Improvement is not a goal. Here are some more words that we see that are completely non starters as they relate to goals. Words like boost. Correct. Develop, Elevate. Oh, by the way, folks, these all came from goal objective sheets on my desk this week. Week. Boost. Correct. Develop. Elevate, Enhance. I love that word. Enhance. It sounds sexy. Grow. Help. Increase. Revamp, Revamp. What is that? Revise? Yeah, I got rid of all the spelling errors. I technically revised it. Update, upgrade, etc, etc, Etc. My favorite one about people is develop. I'm going to develop my people this year. Yeah, okay, great.

[B]

Yeah, we've seen all these things for sure. But you can fix these, right? I mean, there's one way to use these words and to be okay, which is simply just attach a number to it, right? Which is increase revenues to $10 million from 9.5 million.

[C]

Yeah, okay, but. Okay, yeah, I'll grant that. But really what you should say is achieve revenue of $10 million.

[B]

Right, right.

[C]

Yeah. The target is the key, not the difference.

[B]

Yeah.

[C]

When you think goals, think targets. Yeah.

[B]

And the different. The problem is that people use these words and they do not follow them by a number.

[C]

Right.

[B]

That's the problem. We see a lot. Okay, so let's listen.

[C]

Why should they if their boss will allow them not to? Because if they increase a little bit, but they don't get to 10.0 from 9.5, they're good. They technically increased.

[B]

Yeah. But now MT managers will be setting and only allowing MT goals. So we got that covered.

[C]

Yes. There we go. 50,000 listeners going hooah. Yeah.

[B]

Okay, so let's move on to one of our favorite recommendations about goals. And I love this one, which is stay narrow.

[C]

Yeah, this is one of my favorites, too. Everybody that I know that's exceeded performance standards that succeeded beyond the norm noticeably, and I'm talking two or three standard deviations versus everybody else's career, they totally embrace this recommendation. If you told me, Mark, what's the one hidden gem in this show? It is this one right here, folks. Stay narrow. Too many managers want to impress their boss with more goals, and it's totally counterproductive. Okay, you set nine goals or 12 goals or 13 goals, and you're totally motivated about impressing your boss in January and February. And then you end up spinning plates, running around trying to move all of them forward every week, every month, and you get tired and you get, you know, and you straggle after ripe blackberries and suddenly you can't get it all done.

[A]

All.

[C]

I mean, all of the great strategists and tacticians and leaders and consultants and thinkers of the world all have as one of their core principles something that sounds like Napoleon's mass at the point of decision. Or focus on key priorities or Pareto sales distributions, which says 80% of your sales come from 20% of your customers. It's. It's weird. It's shockingly weird how true that is in so many cases. Or. Or Drucker's famous admonition against three ring circuses. Folks, don't come up with 10 goals. Don't come up with three that you will fall on your sword for. Maybe you get those 10 things done. Maybe you do. Lucky you.

[B]

Great.

[C]

Take full credit for them. But commit your life and your career to the three big ones. And by the way, going back to Mike's earlier point, make sure those big ones are related to the big levers that make the most difference in your organization. Rather than trying to do everything, choose an area to focus on. If your boss is somebody who will let you slide on 10 goals. He or she is also a boss who will let you slide on 3. Why spend your time running around when you can spend your time moving forward?

[B]

Yeah. I mean, look it, you're going to have curve balls thrown at you early on in the year.

[C]

No. Really?

[B]

Yeah.

[C]

Probably things are going to change during the year. Yeah, I didn't know that.

[B]

And probably in the first quarter, right?

[C]

Yeah.

[B]

Don't have so many goals in so many areas that you end up having to throw them overboard and worry about how much your boss is going to actually use them at the end of the year. Stay narrow.

[C]

Good. I love. I agree. That is your and my favorite one out of this cast. It's not soapbox. It's just the one that we know that CEOs and EVPs and SVPs are use.

[B]

Okay, next is plan for Q4 completion. And we mean when we say Q4 completion, we mean by Q4 completion.

[C]

Yes, exactly. Yeah. And this is a simple cheat again, but it's a powerful one. I got to stop calling these things cheats, but I have sons who play video games. This is a simple tool, but it's a powerful one. Too many rookie managers set goals without deadlines. We talked about this before, thinking that there's an implied deadline, December 31st. And you know, technically I think grammatically they're right, but they miss the point that deadlines motivate behavior. But your reality and your boss's priorities, as you alluded to, have a way of intruding. And so for virtually all annual goals, save for those few that are really, truly dependent on Q4 economic activity, set the deadline, the time part of your empty goal at the start of Q4. Okay. In other words, do your 12 month goal in nine months. Because if you can't get it done in the first nine months, the chances of you finishing it in the last quarter are very slim. Anyway, if you're going to get in trouble for failing to meet a goal, let it be just because you were late, not that you didn't get it done at all. If you're getting reviewed in January, you can say all you want that you'll be done in February because you didn't get done by December 31st. But no boss is going to believe you for that. I'm sorry. It's just an untenable position because they're going to expect you to set new goals for next year anyway, which are going to be more important because your salary's already been decided on. Last year's Performance.

[B]

Yeah. But if you miss September, but make the goal by October 20th, 20th, no boss is going to punish you either.

[C]

Exactly. Right. Yep. Yep. And to sit with other managers, your peers, and to say, actually, all my goals have to be done by September 30th or October 1st, or even October 2nd or October 3rd, they're going to go, what, are you crazy? Hey, look, man, I want a buffer. I want. I want to be able to fail and then be motivated to have my boss ask me every week about it. So I get done in November. So at the end of the year when it's December, I can say, yeah, I achieved every one of the goals that I. Yeah.

[B]

So the video game cheat here is to give yourself some wiggle room. So this, I think, guidance leads us to our next recommendation, which is backwards planning.

[C]

Yeah, you and I love this one too. This is one the military is famous for. That it's too bad the military gets a bad rap so often for managerial techniques because a lot of the professionalism and managerial behaviors today come from military stuff. And quite frankly, we could be wrong here. And everyone might be doing this, but frankly, I doubt it. I think Google and the Internet have become the death of planning and developing a plan and then having tasks and having dependencies and those kinds of things. Except for project managers who make it an art to the point of, my Gosh, there are 75,000 tasks in this project. Perfect. I'm sorry, that's too many. Look, when you throw down a goal, it has a deadline and has an end state. Usually annual goals have many, many, many steps that get you from today to their backwards planning means laying out what needs to get done in reverse order. That is to say, what are the last things you would do right before you would call the goal done? And then what would you have to have done right before those things? And then what would you have to have done right before those things? And actually, the way I think about backward planning is a fishbone diagram, only it kind of looks like an upside down tree. It looks like you've taken a tree, you've ripped it out of the ground, and you've turned it over upside down. So your hand is holding it and you're on top of it, of it. And the tree branches are all sort of branching out and down. The base of the trunk is at the top and that's the MT goal that you've set. And each branch with all of its sub branches is an area that support the goal. And basically the series of things that have to happen in the day, 2 days, 3 days, 5 days, 7 days, 12 days, 15 days before the goal, they move from the top to the bottom of the document. And as there are dependencies, the tree becomes more and more broad and has more and more branches. Branches. And basically, each branch, with all of its sub branches is an area that supports the goal. And basically, what we see really, really effective managers and executives do is they come up with a goal and they say, okay, let's backward plan what we need to do to get that. What are the criteria that have to be met in order for us to get to that? And then in order to get to that, what we need to do to get to that. And then that, and so on and so forth backwards. And the best way to get a list of all those tasks to essentially build that tree or that fishbone diagram is to sit down and brainstorm with directs. I mean, okay, second best is to brainstorm with yourself. But frankly, with your directs, you're gonna get a whole nother level. It's just gonna really impress you because they're gonna be ones doing some of the work, just you. And then once you do that, use your best judgment, assign some due dates, and that becomes a framework so that you can begin to assess the health of a project during the entire year, rather than just continuing to put things off until the end of the year and then wondering why things didn't get done done. Look, you're going to be wrong on some of this stuff in terms of backwards planning, because you're going to get thrown curve balls in the beginning of the year, as you said. But being wrong on any one task deadline isn't going to ruin your overall goal, if you understand the dependencies and so on.

[B]

Yeah.

[C]

And the mistake that most managers make. Mike, I just want to say this very briefly, and I think most managers will feel this is that they have a goal. The goal connects is essentially almost a bridge too far, some three to six, nine 12 months in the future. Future. And then they have an idea of what the first three or four steps are. But never having done any backward planning, they don't have any clue about a couple of big chasms that exist. They're just going from task to task to task. And I don't have any problem with knocking out tasks. The problem is if you're knocking out tasks and you haven't thought even for a minute about what the big chasm or second chasm or third chasm are out there, you're going to be in real trouble. Backwards planning gives you some really good insight about what tasks will get you where and how quickly and what to process problems will be.

[B]

Yeah, you don't do that. The problem is you get to the, you get to the fourth quarter and go like, oh, crap, yeah, I got two quarters worth of work to do before I get to the end. Okay. That whole thing there brings us very neatly to our last recommendation, which is front loading tasks.

[C]

Yeah. And that's really simple. Don't, folks, don't try to make things equal throughout your year other than things that have quarterly tethers, like quarterly sales numbers, for instance. You can't do your quarterly sales numbers by January 15th. Okay. Try to get everything done by the start of Q4. As we've said, it gives you the room for curveballs and, and generally what you want to do is you do your backward planning, add to it and say, okay, what are the stuff I need to do? Can I accelerate in January in order to make sure that I find out where I'm going to really stumble and I have to add some extra time in because it's going to take longer than I thought. Okay, be smart about it. As Mike said, you're going to get thrown curveballs. Your entire professional history tells you this, but somehow we avoid it. Use Q1 and Q2 to be a little maniacal about things and to rush a little bit and to gather data and to maybe fail a few times in achieving some pretty assertive or aggressive objectives along the way toward your goal. So you're gathering more data and you have time to adjust as you go through the rest of the. The year.

[B]

Good. Wow. Did we get through it? That's a pretty long cast.

[C]

We're not done.

[B]

Oh, no. We have our epilogue. Our first ever.

[C]

That's right.

[B]

Well, that will end it for this week's show next week we'll conclude with the best selling story of John and the Gate Guard, an exclusive Manager Tools only story guaranteed not to be told on any other podcast. You won't want to miss it. No, when I, when I write that stuff, it doesn't sound quite as bad as when I read it. So sorry. All right, folks, we'll see you next week.

[C]

So long.

[B]

Welcome to Manager Tools. Today's topic, how to set Annual goals, Part three of three. Hello, everyone, this is Mike, and welcome back to Manager Tools. Today, Mark and I conclude our conversation on Setting annual goals by Mark sharing a story that I think you'll find instructive. Now, it's just a story, but sometimes there's a lot to Be learned by a story. Before we go on, I wanted to thank everyone who might have had some troubles on the website the last 24 hours. We just did fairly major upgrade. We moved our servers over to our own purchase servers. You won't see much of a change initially, perhaps a little bit snappier and speedier response times, but other than that, this is just one of those things that we're doing in preparation for great things to come. So it didn't quite go off without a hitch. But I think we're through the. The worst of it. So if you do run into any problems, be sure to send us a note and we'll get right on it. Alright with that. Here we go with today's cat. Did we get through it? That was a pretty long cast.

[C]

We're not done.

[B]

Oh, no, yeah, we already have the. We have our epilogue, our first ever.

[C]

That's right. We've never, we've never done that. And you know, it is, it is such a worthy story and it's a tribute in part to the manager I was working with. We just didn't want to shoehorn it in between, you know, a minute or two in between, two bullet points. And I think it would be easy for some folks to forget, and I know that our really loyal listeners will never forget it, that this show is not about you and I. We're thrilled that people think that we have a great relationship and we do, and that it makes it fun to listen to. But this show is about managers. This show is about people who go to work every day and have people working for them and struggle with. With the day to day of how to be good, how to be effective, how to be professional, how to be ethical, not how to get ahead. Although the really good managers know that if they're professional and ethical and effective, they'll get ahead far beyond their wildest dreams. We're certainly motivated to help people who want to get ahead, but not at the expense of professionalism and ethics. But this is a show about managers and this story just deserves to be told. And we have hundreds, we have a thousand stories like this. And I know this is a long cast and probably there's. Some people are thinking, I just don't want to hear John's story. But it is so instructive about a person who has. If you met him in five minutes, you'd say, that's a guy I want to work for. And yet, much like many of you right now, if I met you, if Mike met you, we'd say we'd want to work for you. And yet you still struggle day to day with some of the things that organizations or individuals or your job throws at you. And this is a story of John and his gate guards. John is a manager at a Fortune 200 company. This particular company is very well known in its niche, so much so that it has become a target. And I say that in the worst possible way. It's a company that is associated with a line of business that is, let's just say, it makes them part of a list of targets in the United States for terrorists. And so consequently, this company and its physical facilities, its presence on the ground, has a special need for security. And as most of you know, particularly if you work in high tech, security is one of those things that you can make things secure, much like US and international airlines. But at some question, sometimes the question is, okay, you can make it perfectly secure, but it'll cost you a billion dollars. And so there's a constant analysis of cost and benefit about, okay, we can make it secure, we can make it more secure and even more secure and more secure. But then we start questioning, how much does it cost and what is the impact on people? And John was tasked with managing. I want to say the number is 50, but I could be wrong about that because it's been many years ago now that I was working with John. I was consulting to this firm and spent a couple of years there virtually every waking day of my life. And this particular firm, a company that is well regarded, well respected, and John managed all of the gate guards. He was a security manager. And probably some of you are out there saying, oh, boy, he's not a line manager. But let me tell you, John was one of the best line managers I ever worked with. He cared about his people, and his people were responsible for manning the gates that you drove through when you came to work in the morning and drove by on the way out. At the end of the day, it's one of those hygiene jobs that everybody takes for granted until something goes wrong. The company was in a big measurement push at the time. And John, who really cared about his people and really cared about the company and really bought into the culture and the mission and so on in all the best possible ways. Ethical, professional, caring, great guy. John came to me one day in a total panic, and he said to me something I'll never forget. He said, you got to go talk to your consultant friends and find out who's got the book. And I remember thinking to myself, my friends are actually guys who live near me. It's not like I only have consultant friends. And what is this book he's talking about? And knowing John, I'm like, wow, if John thinks a book is that valuable, I want to know what it is. And I said, hey, buddy, what do you mean? He said, look, he says, dude, I'm sorry, but I need some help. The company has decided that metrics are everything. We got to start measuring everything. He says, I don't know. He says, my guys, I got great guys. I got the greatest team. Everybody says I'm a great manager. I'm not a great manager. I just got great guys. Guys. Which of course is a true sign of a great manager. They're always deferential toward their people about why they're great. And John said, I got great guys, and that's why I'm a great manager. But I've got to come up with some way to measure what it is my gate guards do. And I know you, Mark. I know you've got somebody out there in some consulting firm somewhere, they've got a book. And the book says for any given job, for any managerial job, for any technical job, for any operations or logistics or marketing or sales channel job, there is a list of measures that good companies use. Now look, folks, if you're thinking that some other company out there knows how to do their job so much better than you, and you're being kept in the dark just because you don't know somebody or know something or haven't read the right book, you're mistaken. Every company, every organization that Mike and I work with, with have their strengths and their weaknesses. And there is not some magic book somewhere of every possible measure. The closest thing to it in management would be something probably like competencies, which we just want to get sick about every time we talk about. But interestingly enough, competencies don't really apply to gate guards. It's a terribly prosaic thing to be the person at 6 o' clock in the morning standing in front of the gate, opening the gate and letting cars come through and checking badges to make sure that everybody who comes in is supposed to be in. It is actually a very impressive thing to be responsible for security in an organization with thousands, actually tens of thousands of employees in this one location, the corporate headquarters. And for security to be. To make people feel absolutely secure while not being obtrusive. In other words, security happens, but it doesn't take so much. It's not so painful that people feel like I want it to be less secure. I'd rather it be less secure because it's just so hard to deal with the security measures. It's not the case at this company. John and his gate guards were responsible for part of the security that made people feel secure, but didn't make them feel like they had to go do nutrolls every time they needed to get something done. So John was responsible for the gate guards, and John cares about his folks. And he comes to me and he says, you got to give me the book, right? You got to talk to your buddies, your consultant buddies. Because, of course, who would want to be friends with a consultant but other consultants, right? We're the unwashed. And I said, dude, there's no book. We just. Let's talk about what it is you want to measure. He says, well, I don't know what to measure. He says, look, I'm just. I haven't graduated from college. They told me I had to measure my guys. I said, well, okay, let's talk about that for a minute. What makes you good? He says, well, everybody loves my guys. Said, yeah, that's right. I know that. I drive by them every morning, and I love them. They're great guys. They all say, I mean, I don't. Yeah, I happen to go there every day, but I'm not an employee. And they all say, hi, Mr. Horstman, how are you? Hey, Mark, how's it going? Good to see you again. What's going on, you guys? You kicking butt up there in the executive suite? No, I'm really not. Okay, thanks. Good luck. Just great, guys. And I said, so look, when you think about your job, what's important to you? He says, oh, that's easy. And I kind of was surprised that he. I mean, he was very quick. He's been tasked with the responsibility of coming up with goals and objective goals, essentially for his organization. And here he is. Everybody loves what his guys do, and suddenly he's panicking. And then when I say, well, what do you think's important? He says, oh, that's easy. He says, there are two things that people comment on, one positive, one negative. People like the fact that we're friendly. Really? I said, yeah, they like that. He says, it's something I screen for when I hire. I said, oh, I love this guy. He screens his own guys. He doesn't let HR do it right. He's good. I said, oh, okay. What's the other thing? He says, well, they don't like it when the gates aren't open on time. I said, really? Oh, yeah, man. If we're late, if one of my guys is late, we get hammered. You know, it's 6:01 in the morning and the gates supposed to be open at 6. Oh, that gate guard is in a lot of trouble because somebody knows who that gate guard is and they know he's responsible for opening the gate. And man, they come in early and they want to be. If they left their family at five in the morning to drive in, they want that gate open when it's supposed to be open. And there's usually a line of cars at the gate to get in. He said, so, man, what, I mean, you can't measure gate guards, right? I can measure marketing, I can measure sales. I can measure productivity or efficiency or IT or Tara Flops or anything else. He says, I know all that stuff. How do you measure gate guards? Man, there's got to be a book. No, there's not a book. Said, you need to measure the two things that are most important, which are in your business, timeliness and courtesy. And he looked at me, says, yeah, that's it. Find the book with the timeliness and the courtesy thing. I said, no, John, it's not a book. He says, well, I'm in trouble because my guys have to be measured. He says, I know they're good, but I need something to defend them. I said, okay, well, let's come up with something. A proxy for measuring timeliness and courtesy. He says, well, how can you measure that? I said, well, you say people complain when people come in late, right? When the, when the gates are open late. Yep. I said, okay, let's measure the number of complaints that come in because the gate isn't open on time. And he said, well, gosh, wouldn't that then imply that we were wrong? I said, well, yeah, yeah, sure. Every time your gate is not open on time, that's going to be a complaint and you're going to find out about it. But don't you find out about already? He says, oh, sure I do. I get creamed for it every time. I mean, I get an email from somebody very senior, senior in the organization saying, how come the gate Wasn't open at 6? They said it opened at 6:02. I wanted to tell him, john, you understand that that guy's not a nice guy, right? But anyway, so you're already hearing about negatives, so why not track it and measure it? He says, you think I can do that? I said, well, sure. Do you think you can figure out a way to increase the chances that it won't Be open late. He says, I bet if we start measuring it, it won't be. I said, yeah, I think you're probably right. He says, yeah, but okay, that's an easy one. It's kind of timeliness thing. But what about courtesy? You know, how do you measure courtesy? Well, let me ask you the question I always ask managers whenever I'm working with them. How would you measure courtesy? And then he said the same thing again. This is a great manager. He says, oh, that's easy. It's whether or not they smile at you. So what do you mean? He says, look, if the gate card smiles at you people, I. I can't tell. I did the job. When you smile at people, they have a better experience if you don't smile and there's even the chance of something not going wrong, like they have to look twice at your badge or whatever else, boy, it can go south really fast. I said, john, you don't need me and you sure don't need a book. You just need to measure the number of complaints that you get for gates being open late. I said, you could also measure gates being opened late, but I would argue that's harder because you actually have to be at the gate or rely on somebody else to measure whether or not the gate was open on time. Let's just measure complaints. And quite frankly, if you opened every gate late, John, who cares if nobody complains, right? I said, and the second thing is, we need to measure whether or not your gate guards smile at people. And he said, this is the funny part. He says, is that what we pay you for? I said, no, really not, but I'm glad I could help you. He said, but wait, wait, wait. How do you measure smiling? Well, it's easy. You go out there and you check. Oh, but I can't be in every place every time. I said, you don't have to be. Just do a sample. He says, what do you mean, sample? I said, well, the population is every one of your gate guard from the time the gate opens until the guy in the gate closes. And they have that population is that individual guard times the number of cars or actually individuals in the car that he or she has a chance to smile at and whether or not they. They do. He says, yeah, that's a lot. I can't be everywhere. I said, no, but you need a sample of that. Well, how do I sample? I said, well, this is just statistics. You just go to a random gate every given morning. I said, are you here first thing in the morning? He says, what, are you crazy? I'm here an hour before the gates open just to make sure. Said, great. So it won't be anything out of the ordinary for you. You go, you pick a different gate each day, establish a pattern, don't establish a pattern. I don't care. And on a given day, go down, down and watch your gate guard. He said, what do you mean, watch them? I said, stand there as they do their job and observe them doing their job and see whether or not they smile at people. Well, you think that'll work? Well, I'll tell you what. You'll be able to measure whether or not they smile. Oh, but I think they'll cheat. I think they'll actually smile at people just because I'm there. And I said, and how is that bad, right? I mean, why is that a bad thing? But even. And so, John, in my experience, it doesn't matter whether you're there or not. Within five minutes, they will forget you're there, and they'll go right back to their habitual standard. They'll forget. I work with executives all the time. It happens all the time. And he said, so, okay, so what you're telling me is this. I need to measure the number of complaints. Said, yeah, it'd be good to put it on a little graph or something. He said, oh, yeah, I got that. I can put a graph. In fact, I got two years worth of history data. I'm like, oh, my God, this is great. He's going to have a graph. Half of how many complaints each month? I said, what's your goal going to be? He said, well, that's easy. Zero. I said, okay, when you've been doing it for six months, what's your goal going to be? He says, oh, that's different. Then I'm not looking for complaints anymore. Now I'm looking for positive comments about timeliness and courtesy. I said, okay, now you're thinking, buddy. Now we're on track. He said, but I can change my metric. I said, sure, if the metric's not serving your purpose. The only reason we have metrics and goals, the only reason we have goals at all, is to improve our performance so we can be better at doing what we.

[B]

We do.

[C]

We don't tie ourselves slavishly to an old goal if it doesn't serve our purposes anymore. He says, oh, I'm beginning to. I'm beginning to get this. So we're going to measure whether or not the. How many complaints we get, believing that complaints are a good proxy for whether or not the gate was open on time, because right now gates aren't open on time. We get complaints, rest assured. And then the other thing is, I'm going to actually check whether or not they smile at people. I said, yeah, that's one way, John. I'm not saying that's the only way anyway, but it is as simple as that if you want it to be. And the look on his face of, oh, you mean there's not some priesthood of consultants that have a book that decide what the goals are? No, there's really not. And, John, you're probably smart enough, you probably could have figured this out on your own. You don't need me, really. And we happen to be having lunch while we were doing this, while we were having this conversation, and. And he went out and started measuring things, and his guys all said the same thing. They said, what are you going to measure? Whether or not we smile? Yep, that's the criteria. I've decided that you guys are all pretty good, and if you smile at people, it makes a difference. And John told me some amazing things. He said, you know what? I could have told you which one smiled and which ones didn't, because the ones that didn't are the ones I got complaints against whether the gate was open or not on time. And he said, I can tell you when the good ones started having problems at home or at work or related to something else because they stop smiling. He said, separate from the fact that this gave me numbers that I could talk to my bosses about how good my people were, it also gave me insights into how well my people were doing. He's been promoted three or four times since then. I think he run. He's near to running all of security for this Fortune 200 company. And I would argue that that, in a nutshell, is what goal setting is all about, which is understanding what it is your team does and coming up with either proxies or something that you can measure that you can track over time that you believe is a reasonable approximation in this case. Proxies really play a big role in this story, and you don't have to make it rocket science in order to get a good start on how well your team does what it does. And if a guy like John, who's as good as it comes, really when it comes to managing, who cares about his folks, who knows his family folks, who wants them to do better, who sees gate guards not as a job that nobody wants, but as a place where somebody who is really good could start at the company and spend 30 years there. When a guy like John says it's as simple as having a check mark next to whether or not they smiled at two or three people inside the car. And then he started adding eye contact and saying people's names and all those kind of things as well. He ratcheted up over 60 time. If a guy like that can make it as simple as how many complaints and did you or did you not smile based on the samples that I'm there and they all know I'm there and they still forget to smile on given days. I believe that goals good, effective, measurable and time based goals are in reach for anybody.

[B]

Wow.

[C]

That's the story for the epilogue for today.

[B]

Wow.

[C]

I hope it was, I hope I was excited talking about it. I hope it was instructive and exciting and energizing for people because seeing John do that was just, it was the old saying of a thing of joy. A thing of beauty is a joy forever. To watch John accept, adopt, do, and then get all kinds of benefits from something as simple as complaints and smiles, you don't have to impress people. You just have to figure out something that you believe will work and then measure it, have a number associated with it and in his case, stay narrow and deliver big results.

[B]

Yeah. And if, if somebody can create a great exciting story about gate guard, just imagine what most of our listeners can do with, with their organizations good at doing things that, that are probably, probably more complex.

[C]

Man.

[B]

It's just, that's why we love this business.

[C]

Yeah. And I admit two years ago when we started, I knew I was going to figure out a way to tell this story. Because ultimately management is about people and the challenges they face. This story alone is not a manager tool. It's not actionable, it's not deliverable, but it is uplifting and inspiring hiring. And we've got to figure out ways to share more of these kind of stories. But it instructs and informs this particular process of setting annual goals. And this is the kind of story that makes it more likely, I think that our listeners will go out and actually do, enact, use, utilize whatever word you want to use the tools that we share with them because for no other reason than your people deserve it. Period.

[B]

Good. Well, that great story is how we end other than our wrap up.

[C]

So what do we do today? We talked about bottom line up front. We recommend empty goals which are, no pun intended, measurable and time based. We definitely talked about smart goals and how we didn't think that they were that smart. But we didn't go so far as saying they were stupid. Not exactly. Anyway, we talked about how to create effective annual goals by using MT goals. Goals. We talked about staying narrow, planning for Q4 completion, which means finishing in nine months rather than 12 backwards planning and front loading tasks. And we ended with the story of John and the gate guards. Pretty simple. Long but simple.

[B]

Cool. Thank you, my friend.

[C]

Thanks partner.

[B]

We'll see you. Well, there you go everyone. Finally, the end of the series of goal setting. Or so you may think. Stay tuned. You never know, there might be more coming down the road, but for today, that's it. We'll see you next time. So long, everyone.