With the budget and planning season almost upon us, I would like to share some tips about stating goals that will make your life a lot easier. We will assume that you are fortunate enough to have corporate or organizational goals that are SMART (specific, measurable, actionable, realistic, and with a time component). For example, most organizations have a goal to increase sales or revenue, and let’s say the goal is to increase U.S. sales from $10 million last year to $11 million in the coming year. It is specific, measurable and time constrained, and hopefully it is actionable and realistic as well. Another goal that is common in many organizations is to increase the level of employee engagement, which is typically measured by an annual or semi-annual survey. In this case, let’s say the goal is to increase the score from 60 percent (favorable) to 65 percent for next year. Again, the goal is specific, measurable and time constrained.
My advice is to restate these organizational goals in terms of the change or delta from last year to the coming year. This makes the goal more meaningful and allows for a far easier and richer discussion about the contribution of human capital initiatives. So, for our first goal we would restate it as “Increase U.S. sales by 10 percent,” assuming it is understood the goal is for the coming year. The 10 percent is simple the percentage change or the delta from last year. For our second goal, the delta is 5 percent (65 percent minus 60 percent). However, since this could be misinterpreted to mean a 5 percent x 60 percent = 3 percent increase to 63 percent, I recommend the delta be stated in percentage points whenever the underlying goal is already in percentage terms. Thus, the goal would be “Increase employee engagement by 5 percentage points” or “Increase employee engagement by 5 points to 65 percent.” In either case (sales or engagement) the focus is now on the delta or the change. It is much easier to remember that the goal is a 10 percent increase rather than to achieve $11 million, and the delta indicates how much work is going to be required to achieve it. For example, it will probably be easier for an organization to achieve a 1 percent increase in sales to $100 million than a 10 percent increase to $10 million.
Last, it is much easier to discuss the impact of a learning initiative on a 10 percent increase in sales or a 5 point increase in engagement than to discuss the impact of learning on $11 million in sales or 65 percent engagement level. Your learning initiatives next year are far more likely to impact the delta (10 percent) than the level ($11 million). So, engage the stakeholder (such as the VP of sales) in a discussion of all the factors that are expected to influence sales next year, including learning. How much of a contribution could learning make compared to the others? Could it contribute 20 percent of the 10 percent increase (this would be a 2 percent increase in sales due to learning), or 40 percent of the 10 percent (4 percent increase in sales due to learning)? Likewise, what impact could reasonably be expected on the five-point increase in engagement? Could your learning initiatives deliver 20 percent of the five-point increase (this would be a 1 point increase due to learning)? You will find it much easier to have this outcome discussion with a stakeholder if you first restate organizational goals in terms of the delta.