The art of setting goals and objectives
Our Art of setting objectives and goals event gathered an audience of professionals from different business areas. Three inspirational speakers talked about ever changing challenges, objectives, and smart means to reach them. Please enjoy the summary.
Save the dates for the coming Fingertip’s Breakfast. They will be hold on Tuesdays at 8-10 a.m. on February 26, March 19, April 9, May 7, and June 4. Speakers and topics will be revealed soon.
Wood fibres and good vibes!
Paptic is a new packaging material that shares properties of both textile and paper. It’s a replacement for plastic in bags and packages, and answering the need for renewable, reusable and recyclable options. In 2018, the awareness of the plastic situation increased exponentially. Now everyone is aware of it, globally. Paptic aims to build, not a paper mill, but a Paptic mill in Europe.
Paptic’s COO Juha Ebeling has seen many management positions in different kinds of environments and management cultures, with various kinds of objectives and goals. He’s seen political games where true achievements counted little. He’s been in tough change management situations. “The Finnish low-hierarchy and open-door policy works mostly well, but it’s not effective in all situations”, Ebeling says. “When the change is needed, a lot of management activity is required. Another situation where a great deal of management is needed is ensuring that the successful path is made part of the company’s every-day life. But when people have a clear sense of the direction and things are moving well, management can be less visible.”
Learning requires experience and that’s usually the combination of good and bad results. “It’s the hard situations and failures that teach us the most” Ebeling says. Challenging yourself continuously, even though when things are going well, is crucial in management and leadership. To learn from the past, to make sure you are following the right targets, to be able to react to changes, it’s also important to reserve time to reflect the big picture. Management is challenging as two different levels of thinking are constantly required – on the one hand focus on the execution and results, and simultaneously being aware and sharpening the big picture.
“I like pipeline management. It can be used in sales, as well as in idea management or cash management. Having a pipeline “full”, you know what you can achieve in the next e.g. 12 months”. A company has it a lot easier if they have well defined processes for project management, exchanging the best practices, benchmarking, tracking the progress situation. A good tracking system helps to follow the business results, but also other important aspects like how the employees and customers are doing and how the development projects are proceeding. Ebeling is an experienced Fingertip user, skilled with the nuances of the digital Management system. “Fingertip is a great tool for building all these management aspects into a company.”
From roofshots to moonshots!
Fingertip’s CTD Jukka Ala-Mutka, dived into the philosophy of OKR (Objectives and Key Result) method and shared as an example his own objectives with the audience.
“There are fundamental steps that make OKR different from other management methods. You need to aim higher than you could realistically reach, over the moon and back. You’re not supposed to explain your achievements through tasks and ‘done’ lists. You’re not told what to do, let alone how. That’s for you to decide as long as your actions are aligned with the organization’s targets and values”, Ala-Mutka explains the theory.
Objectives are memorable qualitative descriptions, short, inspirational, and challenging. Key Results are a set of metrics. For each objective, there are 2–5 Key Results. According to Ala-Mutka, 10 metrics is a sufficient amount, but there can be as many as 25.
An objective could, for instance, be “Create an Awesome Customer Experience”. The Key Result metrics to measure the success of this objective could be “Improve Net Promoter Score (NPS) from X to Y”, “Increase Repurchase Rate from X to Y”, and “Maintain Customer Acquisition cost under Y”.
Separating OKRs from compensations is crucial to enable ambitious goals. This means that the OKR is not a performance review but just one angle used to determine how well an individual is doing. It helps solve problems, improve processes, and drive innovation.
“When estimating employee compensation, the tool should be KPI. Again, the NPS could then be used both as a Key Result and KPI metric, but it would have different values as well as a purpose. If we don’t even try to get to the moon, we never will. But getting on the roof might still be sufficient when we’re talking about performance”, Ala-Mutka says.
When defining OKRs you start by defining what success looks like. This question is for company, team, and each employee. Especially the employees should start setting goals based on success, not by what they are used to, just because it’s been done earlier. True success means different things to different people. When used correctly, OKR helps teams and organizations define shared success criteria, and to set clear, measurable criteria for reaching success.
Social Decision Making Quality is the core of OKR Alignment
Fingertip’s CEO Jaakko Pellosniemi stepped on the floor for the closing words. “Fingertip has implemented OKRs and found it a good way of recognizing, setting and aligning objectives and goals, and our application supports this beautifully”, Pellosniemi says.
“To reach your objectives, it’s crucial to focus on decision making capability and quality. Fingertip gathers the necessary stakeholders within an organization for the situation at hand, and enables to form and design objectives without bottle necks”, Pellosniemi continues.
Quality factors in decision making consist of 7 elements
- framing the question
- bringing up alternatives
- sharing information and intuition
- defining consequences
- reasoning and dialogue with others
- commitment and agreement to take actions
- and finally pondering if the timing is right.
Each and every one of these deserves time and consideration. Apart from decision making, using Fingertip for OKR Management creates necessary relations and bridges between people’s objectives, key results, projects, and task lists. It streamlines decision making and planning. To change the culture, you need to change the decision making system. And to navigate complexity you need to focus on decision capability and quality.