Setting targets in business is a nuanced process, but one that can’t be passed by.
Developed by psychologist Edwin Locke, goal-setting theory suggests that specific and challenging goals lead to higher levels of performance when accompanied by feedback and commitment.
According to this theory, setting ambitious yet attainable targets motivates individuals or teams to exert effort and take appropriate actions to achieve them. This has been supported by various studies across different fields.
For instance, a meta-analysis of 35 years of research by Edwin Locke and Gary Latham showed that setting specific and challenging goals improves performance across diverse domains, including business.
All of the above factors play important roles in driving performance and fostering growth within an organisation, but in order to get the most out of them, there are some key factors to balance while setting your targets.
Too ambitious, and you could demotivate your staff. Too achievable and you may not see the success you’re hoping for.
So, in order to understand the science behind setting the right targets, we’ve outlined the facts.
Achievable vs. Ambitious Targets
These two target types may seem at odds with one another, however, utilised in the right way in the right timescale, they can actually both be extremely effective in business.
- Achievable Targets: Setting achievable targets is crucial for maintaining employee motivation and preventing discouragement. Realistic, yet challenging goals that are within reach provide a sense of accomplishment and build confidence. Your employees are more likely to be engaged and committed when they believe their efforts can lead to success and that success is celebrated. Achievable targets also ensure that resources are allocated appropriately and that there is a practical plan for achieving the goals you set for your business and yourself.
- Ambitious Targets: Ambitious targets push individuals and organisations to reach beyond their comfort zones and achieve extraordinary results. They encourage innovation, creativity, and breakthrough thinking. Ambitious targets can inspire employees to stretch their capabilities, leading to higher levels of performance and long-term growth. However, it is essential to strike a balance and ensure that the targets remain within the realm of possibility to avoid setting unrealistic expectations that can demotivate or disengage employees.
As you can see, both of these types of target setting can provide powerful results in different ways.
However, the way you use them in order to keep staff motivated and empowered is a delicate process, and one that could lead to success if well executed, or burnout if not.
So, what’s the secret behind setting these targets?
How to set achievable and ambitious targets
When it comes to achievable and ambitious targets, the key is in the balance.
- Short-term Achievable Targets: Setting short-term targets that are realistic and achievable helps build momentum and keeps employees motivated. These targets can be incremental steps towards larger, more ambitious goals, allowing individuals and teams to experience frequent successes and maintain enthusiasm.
- Long-term Ambitious Targets: Establishing long-term ambitious targets provides a vision for the future and challenges employees to reach for greater heights. While these targets may not be immediately attainable, they serve as aspirational benchmarks that guide strategic planning and inspire innovation.
- Regular Assessment and Adjustment: Regularly assessing progress and adjusting targets based on performance and market conditions are essential. This ensures that targets remain challenging yet attainable, reflecting the changing dynamics of the business environment.
Verne Harnish, business expert and founder of Scaling Up, supports this approach to setting targets.
He claims that setting intermediate targets, which are short term and achievable allow your employees to work towards bigger, longer-term ambitious goals, which lead to success.
Intermediate goals will be developed around timescales of a month or quarters to allow for a more realistically achievable outcome. The bigger, more ambitious targets will be measured in years.
In alignment with SMART goals, Harnish also suggests utilising FAST goals as follows:
Frequently discussed – to ensure everyone is focussed on what they’re doing and motivated to keep everything moving forward
Ambitious – just enough to be exciting and drive change but not enough to be demoralising to staff
Specific – so measuring progress is easy and straightforward
Transparent – so everyone at all levels can work towards the same common goal
This last point of transparency is a very important one. Patrick Lencioni, author of The Five Dysfunctions of a Team, suggests that accountability is absolutely key to high performing teams who achieve their targets.
According to Lencioni, by understanding each other’s responsibilities and the expectations placed on them as a team, it allows staff to take accountability for their progress towards targets and encourages a more disciplined approach to their work.
So, when setting targets, it’s important to ensure the timescales are balanced with levels of ambition, while ensuring all goals are widely communicated between teams too, in order to promote motivation and accountability within your workforce.
What are the outcomes of good target setting?
As we’ve outlined above, there are some benefits to setting strong targets. But what does this look like in terms of team and business performance outcomes?
- Increased Focus: Clear targets provide a sense of shared direction and focus for your teams, helping organisations prioritise their efforts towards specific outcomes. This reduces distractions, improves efficiency and increases team working.
- Motivation and Performance: Ambitious yet attainable targets set at effective timescales motivate employees to work towards their goals, leading to increased effort, productivity, and performance.
- Measurement and Accountability: Setting targets enables organisations to measure progress, assess performance, and hold individuals or teams accountable for their results. This promotes a culture of transparency and continuous improvement.
- Alignment and Coordination: Cascading targets across different levels of an organisation fosters alignment, ensuring that individual and departmental goals are in sync with the overall business strategy. This improves coordination and collaboration.
- Adaptation and Learning: Regularly reviewing and adjusting targets based on performance data allows organisations to adapt to changing circumstances and learn from their experiences.
The science behind setting business targets is all about balance and a measured approach that allows teams to feel like they are all aligned towards working one common goal and business strategy.
For more methods on how to set goals, take a look at our goal setting article today.
Or, if you think your business could benefit from support on taking the next steps towards growth and development, get in touch with the Ascentis team today.