Perhaps you have heard of the Yale or Harvard Business School study of goals, in which only 3% of the graduating class had specific written goals for their futures. Twenty years later that 3% was found to be earning an astounding 10 times that of the group that had no clear goals. However, it turns out that this study never existed and was made up to emphasise the importance of goal setting.
A link has been shown between effective goal-setting, management processes and business outcomes. Creating a clear connection between employees’ work and the organisation’s goals is also a key driver of employee engagement levels. Goal setting, however, is a challenge. According to research conducted by Deloitte, only 51% of organisations even attempt to develop aligned goals, and, among these, only 6% regularly revisit them. Too many organisations write down annual goals and only look at them at the end of the year. This research found that organisations that revisit goals quarterly have threefold greater improvement in performance and retention than those that revisit goals yearly.
Teams which are engaged in reaching goals see a 28% higher same-year operating margin, yet a mere 7% of employees understand what they need to actually do to help their organisation reach its goals. Further, while more than half (51%) of senior leaders convene a series of meetings throughout the year to discuss goals with business leaders, only 6% of those business leaders use the same engaging approach to communicate goals to their direct reports, including team and middle managers. The simple truth is that your team cannot achieve a goal it does not know about.
The abovementioned non-existent study prompted a study conducted by a psychology professor at the Dominican University in California. A total of 149 participants partook in the study, from different countries and in a variety of different professions. Participants were randomly assigned to one of 5 conditions all with variations, including and excluding writing down goals, creating actions, sharing actions with a friend and providing progress reports regarding actions to a friend.
At the end of the study, only 43% of Group 1 (did not write down any goals) either accomplished their goals or were at least half way there. Sixty-two percent of Group 4 (wrote down goals and shared actions with a friend) accomplished their goals or were at least half way there. However, 76% of those in Group 5 (wrote down goals and provided progress reports regarding actions with a friend) either accomplished their goals or were at least half way there.
What the findings showed was that the group of subjects who reaped the best results (Group 5) followed a specific model:
- Commitment to action: Rather than simply writing down a goal, the group was asked to commit to an action by partaking in a thorough thought process. Essentially, they were making a commitment, on paper, to achieve their goal.
- Accountability to peers. This group had to follow up their concrete goal planning and action commitment by enlisting another person. They needed to send their commitment to a peer, making them more accountable.
- Regular Updates: This group had to update their friend or accountability person on a weekly basis, which kept them focused on their progress.
When the above three factors are included in goal-setting, the results are shown to be positive. However, there are certain dos and don’ts when setting goals.
Bersin by Deloitte (2015). Effective employee goal management is linked to strong business outcomes. Retrieved from https://www.prnewswire.com/news-releases/bersin-by-deloitte-effective-employee-goal-management-is-linked-to-strong-business-outcomes-300011399.html.
Buckingham, M. (2005). What great managers do. Retrieved from http://hbr.org/2005/03/what-great-managers-do/ar/.
Chowdhury, S., & Hioe, E. (2017). How effective goal-setting motivates employees. McKinsey & Company. Retrieved from https://www.mckinsey.com/business-functions/organization/our-insights/the-organization-blog/how-effective-goal-setting-motivates-employees.
Dominican University. (2015). Goals Research Summary. Retrieved from http://www.dominican.edu/academics/ahss/undergraduate-programs/psych/faculty/assets-gail-matthews/researchsummary2.pdf.