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How many companies have company-wide and individual goals? It’s not a trick question; the answer, of course, is that all companies have goals. But how many companies actually train their employees on how to set goals? How to create goals that are challenging and achievable? The second point (achievability) cannot be overlooked; the tendency is for companies to look for incredible stretch goals in order to motivate their people to go beyond where they thought they could, but it may not be that simple.

According to the Harvard Business Review’s post “Are Your Goals Impossible,” goal setting, when done in concert with competency frameworks (in general a great idea), can quickly spiral into an unproductive activity—“the attempt to be comprehensive it is common for organizations to have 15, 20, even 300 competencies for a single job role. Talk about goals gone wild!” says columnist Susan David.

Similarly, BusinessWeek, in an article titled Beware the Harmful Effects of Goal Setting, careless goal setting can have disastrous consequences, as companies like GM and Fannie Mae had overly ambitious goals in areas that didn’t necessarily reflect reality (“affordable housing” goals in the case of Fannie and Freddie).

So how should goals be set? Here are simple but effective goal setting fundamentals that will work for any organization and the leaders and employees within them. Fundamentally, setting goals comes down to whether a goal meets the following criteria.

Who, What, When, How and Conditions:

  • Who: A goal needs to have exactly who is accountable for achieving it.
  • What: What exactly needs to be done to achieve the goal?
  • When: When does the goal need to be accomplished by?
  • How: Expectations must be clearly stated for how the goal should be accomplished.
  • Conditions: Are there conditions that need to be taken into account to achieve the goal?

These five simple criteria will go a long way in helping an organization set effective goals. The next step is to make goals that work in a competency framework, are measurable, and equate to success on numerous fronts (not just financial or growth, etc.).

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