Goal Alignment–A Performance Roadblock

Too often, I sit in meetings of top executives and it seems each is speaking a different language.  Marketing talks about their performance, sales, customer success, product management, engineering, development, finance, manufacturing, HR…..

Each has metrics and can go through pages and pages of data showing their performance.

Yet when taken together, too often, the organization isn’t meeting their goals.  (That’s usually why I’m invited to join these meetings.)

Recently, I sat in a conversation between a marketing team and a sales team.  Marketing presented tremendous data about web traffic, email hits, SEO results, and so forth–but when the Sales exec stood up, his pipelines were drying up, transactional sales were flat to slightly declining—the story was completely different.

I posed the question, “How can the marketing data look so good–yet the sales data presents a completely different picture?”

At the root of all of these organizational performance issues is Goal Alignment.  It’s often pervasive–you go across organizations, each group has it’s goals, but somehow they are disconnected from other groups–yet each group depends on each other to achieve their goals.

The same thing happens vertically within a function.  The goals of top executives become disconnected with the goals much lower in the organization.  For example, sales people are meeting all their activity metrics, but the results at the top aren’t satisfactory.  Quota’s may be missed, new customer acquisition may be off, customer retention may be off, sales by product or region may be off.

Let’s go back to those meetings–since there is such a problem with goal alignment, we spend (waste) a lot of time trying to translate performance across functions to understand what’s happening and the linkages.  It takes time to understand the reason manufacturing inventories are skyrocketing is they bought to support a new product, yet marketing hasn’t implemented it’s product launch programs and sales is selling the products they always sold, not spending time on the new products.  Product management is upset because they aren’t meeting their launch goals and finance just sees expense piling up with no offsetting revenue or orders.  Customer service levels are down because they’ve been in training on the new products and focused on addressing those calls while other calls aren’t being handled by a smaller team that is overwhelmed.

It takes a huge amount of time to trace through all these problems, understand how they are connected—-and we haven’t even gotten to the point of talking about what to do, what actions do we have to take to fix the issues.  Sometimes, we never do because we are so distracted by trying to connect the dots on the performance issues.

All of this because we aren’t aligned–cross functionally and vertically within our organizations.

Goal Alignment—actually “Interlock” is critical if we are to maximize performance of the organization and each part of the organization.

Interlock has to happen in multiple dimensions.

It has to happen vertically in the organization.  The top goals of the Board/CEO/Exec Team have to translate down to the very bottom of the organization.  Each functional leader needs to agree with the Executive team how their top goals contribute to the goals of the organization.

In turn, functional execs have to cascade those goals to the managers reporting to them, making sure the goals and priorities of their direct reports are absolutely aligned with their own goals (which are already aligned with the top corporate goals).  In turn, those managers cascade it to their direct reports–until everyone in the organization is aligned.  The goals at each level are interlocked with the goals of subordinates and goals of their managers.  Each person in the organization can then know exactly what they must do to contribute to the overall goals of the organization.  They know that not achieving their goals has a ripple effect all the way through the organization to the top.

Goal alignment and Interlock has to also work cross functions and departments at each of these levels.  Since each function is dependent on many others, we need to make sure our goals are synced across the organization.  We have to know who we depend on and who depends on us to meet our goals and commitments.

Going back to the marketing sales discussion I referenced at the top of the post, the goals of marketing weren’t aligned with the goals of sales.  Marketing thought they were performing well.  All their typical measures showed improvements–but those measures weren’t aligned with sales.  Sales complained that lead volumes and call volumes had plummeted.  As we dug down into the data, Marketing had a goal for MQLs/SQLs–but sales had a different goal.

While it seems so simple, these disconnects across functions and organizations impact the performance of each function and the organization as a whole.

Finally, we have to be Interlocked across time.  One of the greatest examples of the challenge with these disconnects was with a client several years ago.  They were launching a major new product category.  To support the sale of those new products, sales had decided to hire a specialized sales team–trained killers in that product/solution category.  Sales management thought, “We need to have these people hired and onboarded, ready to hit the ground running by the end of Q2.”  Likewise, marketing was planning to support the launch with major trade show, conference and media blitzes–starting in early Q2 and ramping rapidly in Q3.  They were starting to spend money to support this launch.

Early in Q1, product development ran into a major technology glitch (pardon my use of these very technical terms).  They needed to slip product launch from the end of Q2 into early Q1 of the following year.

You can imagine what happened.  Dozens of sales people had been hired–with nothing to do.  Most got frustrated and left for other jobs.  Marketing had spent hundreds of thousands preparing for the launch.  In total, 10’s of millions were spent.  Furthermore, sales had a gaping hole in their revenue plan.  They had committed millions in revenue from the new product–now none of that would be achieved in the current fiscal year.  (Fortunately, they got relief from that.)

While this example is extreme, we see huge disconnects in timing of performance commitments across functions in the organization.  Again, the ripple effect is profound.

So things change–stuff happens.  But as these shifts across time happens, it’s critical that we reset expectations and realign across and up/down the organization.

All of this leads to 1000’s of person hours of wasted time, millions of wasted spending/lost productivity, and 10’s of millions of lost opportunity.  Add on the frustration, confusion, and in-fighting across and up and down organizations.

Goal alignment—strong Interlock—up and down, across functions, and across time is critical in maximizing organizational and individual performance.

It sounds like it can be overwhelming–it does take time, and more importantly attention to detail at all levels of management.  But not doing this is even more overwhelming or devastating in terms of lost time, productivity, opportunity–and possibly missed customer commitments.

As a side note, there are an emerging category of tools that help organizations manage, align, measure, track goal alignment across and up/down the organization.  One of my favorites is Khorus–I’m seeing it have a tremendous impact with several of my clients.

Postscript:  The concept of goal alignment and interlock extends to our customers, partners (channel/supply chain) and others as well.  I’ll be writing about this in the future.