The Effect of Stretch Goals on Employee Engagement
Stretch goals are performance goals that can only be achieved by extending oneself to the limit.  According to Google, which has become known for its audacious business goal philosophy, “Stretch goals are the building blocks for remarkable achievements in the long term.”  But even Google sometimes fails to reach its goals and those disappointing results can have unwanted consequences – killing motivation and damaging performance.  We need to understand the effect of stretch goals on employee engagement.

Positive or Negative Effect of Stretch Goals
Regarding the question of the effect of stretch goals on employee engagement–whether stretch goals positively or negatively affect employee engagement–it depends.  It’s all a matter of degree.  Realistically attainable and appropriate goals can be a spur to employees’ expending extra effort.  But near-impossible goals can have the opposite effect.

What We Know
At its core, employee engagement is the willingness of employees to consistently exert discretionary effort toward their work.  It is human nature to want to succeed.  Most of us are psychologically predisposed to prove our ability to meet reasonable challenges.  And, so, when offered realistic and meaningful challenges at work, employees are naturally drawn to address them.

To Increase Employee Engagement
One of the ways to increase the engagement of your employees is to ensure that you offer them opportunities to grow and to “stretch” appropriately beyond their comfort zone.  Employees want a certain amount of variety in their work responsibilities.  Just doing the “same old-same old” crushes one’s spirit.

If you want to encourage creativity and innovation, you need to expand the boundaries of what you ask your employees to do.

A Manager’s Role
Managers have a direct impact on employee engagement.  Managers have the means to offer challenges to their employees at both the team and individual levels.  They can work with their teams to identify goals that will inspire coordinated effort and improved performance.

For the individual employee, managers can identify challenges that take advantage of the worker’s specific talents and personal aspirations.  The closer a challenge is to what an employee does well and likes to do, the more engaged they will be in meeting it.

The Bottom Line
When you are working toward increasing employee engagement, it would be smart to evaluate how you set goals.  Be sure you take into account the effect of stretch goals on employee engagement. If you want to create a high performance culture, strive to create goals that are:

  • Clear and relevant
  • Reachable but only with extra effort
  • Meaningful personally and professionally
  • Aligned with the corporate strategy and cultural norms
  • Recognized and rewarded

Then watch your engagement measures increase as they reflect the positive effect of appropriate challenges.

If you want to learn about research-backed ways to improve employee engagement, download The Top 10 Most Powerful Ways To Boost Engagement

Making the Right Decision
Kids don’t have to worry about decision making tips for new managers.  They have it easy.  They only need to use “eenie, meenie, miny, mo” to help them choose.  But in the business world and especially for new managers who care so much about steering their team in the right direction, decisions are far more difficult to make.

Decisions for new leaders can be complex, involve multiple stakeholders, have far-reaching implications, and seldom can you predict which of several options will be the best in the end.

5 Decision Making Tips for New Managers
Here are some decision making tips for new managers that can help once you know you have a decision to make:

1. Agree Upon the Levels of Importance, Urgency and Risk
Before gathering information and allocating resources, the most effective leaders agree upon the levels of importance, urgency and risk. They understand the impact of the decision upon their key stakeholders; they know how high a priority it is in the grand scheme of things; they identify the key risks; and they define the required time parameters.

2. Define Your Decision Making Criteria
Once the big picture is clear, it is time to identify and prioritize all of the different factors you and your team must take into account. Your decision making criteria should be measurable and relevant to your strategy, culture, team and the scope of the problem you are trying to solve. Typical decision making criteria include factors such as ability to implement, financial, scalability, time, quality, flexibility, risk, culture and people implications, customer impact, competition, and change readiness.

3. Gather Relevant Information
Once your decision making criteria is clear, it the responsibility of new managers to ensure that the information required to make an informed, timely and effective decision is gathered. Use whatever means you have at your disposal—knowledgeable colleagues, relevant reports, past experience, and future trends. Understand that you are unlikely to be able to pull together all the data that would highlight a single path to take.

Focus on narrowing the choices by eliminating some that are clearly wrong and make informed strategic, cultural and people assumptions to overcome the common barrier of unclear information.  Then document the most important information you are missing so you know where you stand.

4. Identify Viable Alternatives and Consequences
Help your team to identify at least three or four realistic alternatives. For each alternative identify the pros, the cons, the uncertainties and the potential consequences.  Generating alternatives may sound like it will slow you down, but expanding your choices forces your team to innovate and look at the problem from different perspectives.  These decision making tips for new managers ease the pain and difficulty of choosing the best path.

5. Be Decisive
Once you’ve evaluated the viable options, the next step is to make your decision. Yes, take some time to consider all options.  But then don’t postpone your decision too long.  Remember, there is rarely a “perfect” answer for complex decisions.

You need to make the best decisions with the information available and begin to move in the chosen direction.  Just make sure you have a process in place to track progress and adjust as needed.

The Bottom Line
As a new manager, you have a lot invested in you and your team making the best decisions.  You want your team to trust your leadership from the get-go.  You can certainly ask for and consider their input. In the end, however, the decision is up to you.  Follow the field-tested decision making tips for new managers.

To learn more about how to create the environment for good decision making, download 29 Ways to Build and Maintain Trust as a Leader

Top Performing Sales Reps Add Value
The difference between selling and helping your customers to succeed cannot be overemphasized.  Selling solutions is not just about you, your products or your sales quota.  Selling solutions is about creating measurable value for your customers.  Selling solutions is about helping your customers to succeed – personally and professionally.

Low Performing Sales Reps Try to Close Deals
Selling a solution that matters to the customer is very different from selling a product without regard to the customer’s wants or needs.  The difference is in the salesperson’s perspective and purpose.  Low performing sales reps prioritize pushing products, meeting internal targets and closing deals ahead of the best interests of their customers.

What High Performing Sales Reps Do Differently
High performing sales reps understand the difference between selling and helping your customers to succeed.  They behave differently in two key areas:

1. Customer Focus
The biggest difference between “just selling” and helping your customers to succeed has to do with customer focus.  The best solution sellers understand their customer’s business and focus on solving important customer problems in a way that makes sense for the customer’s unique situation.  They excel at identifying what matters most, linking their solutions to customer priorities and articulating their unique value-add.

If you want to improve sales performance, help your sales reps improve customer intimacy by having enough knowledge of the client’s industry, business, organization and the client themselves that they can add unique and measurable value.

2. Conviction
We define conviction as your most deeply held beliefs about the value of your role, your offerings and your contribution.  Sales conviction strongly influences how sales reps present new ideas, which in turn influences those around them.  Sales reps who believe that their company and their solutions can make a difference deliver an average of 12.4% more revenue than their equally skilled and experienced peers.

The Bottom Line
When you deeply focus on your customer rather than on what you have to sell and when you deeply believe in the purpose and value of your offering, your sales performance will increase.  Pushing a sale without a sense of what you can do for your customer and how you can support their success is only a temporary win.  The personal and professional value that you get from providing something your customer truly needs is worth the effort.

To learn more about the difference between selling and helping your customers to succeed, download The Top Sales Skills to Challenge Customers

Beware of Eliminating Employee Performance Ratings
Leaders, human resources and employees have been debating the pros and cons of eliminating employee performance ratings for years.  The debate centers on questions of approach, cost and effectiveness.  For most, the goal of employee performance ratings is to help improve performance.

What the Experts Say
Let us start by saying that there is a lot of conflicting and unsubstantiated research.  Just as with the question over whether a student’s performance improves when letter or number grades are abolished, the question about the effectiveness of employee ratings is debatable.  In fact, most experts seem to disagree.

Many well-known companies like Accenture, Adobe, Deloitte, the Gap, GE and Microsoft have all revamped their performance review processes to remove forced rankings, to reduce unconscious bias, to save managers time and to create an environment more conducive for real time feedback and coaching.  Their experiences have helped to identify what works and what does not work.

The Downside of Eliminating Employee Performance Ratings
Most of the negatives associated with eliminating employee performance ratings seem to stem from an ineffective implementation of the performance measurement process, not from measuring employee performance itself.  In fact, Gartner recently found that the elimination of employee performance ratings caused a:

  • 10% decrease in employee performance
  • 95% of managers to report they were having more difficulty effectively managing employees
  • 14% decline in the quality of performance conversations
  • Decrease in employee satisfaction of 8% by top performers
  • 6% drop in employee engagement

Three Things All High Performance Environments Have in Common
Our organizational alignment research found that the highest performing cultures have three things in common when it comes to the performance review process:

1. Clear Performance Direction
High performance cultures provide crystal clear direction as to where people should focus. Everyone knows the actions that must be taken, the expected outcomes of those actions, and how success will be measured.

2. Transparent Performance Status
High performance cultures use clear, credible and fair methods to consistently let teams and individuals know where they stand compared to performance standards in terms of Doing (generating desired results) and Being (achieving them in the right way).

3. Aligned and Meaningful Motivation to Perform
High performance cultures create motivation by providing positive feedback for desired behaviors, negative feedback for undesired behaviors and compelling reasons for people to stay and improve.

The Bottom Line
While eliminating employee performance ratings may seem like a good idea to improve an ineffective performance management process, you still need to ensure that goals are relevant and crystal clear, that people know where they stand vis-à-vis performance standards, and that motivational mechanisms for achievement and improvement are meaningful.  In our opinion, effective performance management has less to do with the details like ratings or grades and more to do with being thoughtful about setting clear performance expectations and giving people meaningful and timely feedback.

To learn more about creating a high performance culture, download The Top 5 High Performance Culture Warning Signs

Too Many Leaders Underestimate Barriers to Rapid Growth
Most companies want to rapidly grow revenues and profits.  High growth helps set the stage to dominate market segments, to win big clients, to make strategic investments and to provide opportunities to attract and retain top talent.  High growth, however, also creates additional pressures on the business and the people to consistently deliver at a high quality at high speed.  These pressures are the barriers to rapid growth.

As one CEO put it, “We are trying to build and fly the airplane at the same time, and we’re not even sure where we are going to land the darn plane or who will be aboard when we do.”

Rapid Growth Can Take Many Forms
You may be expanding into new markets, acquiring or merging with another business, developing new products or simply growing the work force to meet increasing demand.  Regardless of the source, smart leaders pay attention to the impact rapid growth can have on your people, processes and culture.

1. People Barriers to Rapid Growth
While the specific challenges rapid growth companies face differ from company to company, almost all rapid growth organizations face acute people pressures.  It is not easy to attract, develop, engage and retain the right people in the right roles fast enough to meet high demand.  Smart leaders get ahead of the curve and create talent management plans that align with the growth plans for the business by answering some fundamental questions early on:

  • How many people do we need and at what pace to meet growth targets? In what roles?  With what skills?  Which roles and skills matter most?
  • How will we effectively assimilate new hires into our existing culture?
  • Will our current work force need to learn new ways of doing their job or need to take on different roles?
  • How will we support our employees as these changes are made?
  • How can we keep our top talent engaged and reduce the stress as greater demands are made of them?

Talent accounts for 29% of the difference between high and low performing companies.  Make sure you prepare your employees for the changes ahead; otherwise talent constraints may be a drag on growth plans.

2. Structure and Process Barriers
You will need, too, to examine your existing organizational structures and processes.  High growth plans can be stymied by ineffective and unaligned structures and processes more appropriate for smaller companies.  Smart leaders identify the critical few processes that matter most and ensure that they are aligned with their growth strategy by answering a few fundamental questions:

  • What processes and structures matter most for us to execute our growth plans?
  • Will our current ways stand up to the pressures of rapid growth or do we need them to adapt to the new world order?
  • Where are the pain points most likely to be vis-à-vis our growth strategy?
  • Do we need to alter the depth or pace of our growth plans so we don’t reach the breaking point in terms of getting work done?

3. Cultural Barriers
Our organizational alignment research found that culture accounts for 40% of the difference between high and low performing companies. Culture and strategy are inextricably linked.  Successful leaders align their culture (how work gets done) to their high growth strategies by ensuring total agreement and understanding of how work gets done across several key cultural dimensions related to growth:

  • Market Approach – Should your growth be fueled by only introducing new offerings after the market has proven that they work (like Dell) or should you lead the market and consistently develop completely new offerings (like Apple)?
  • Customers – Should you scale the business based upon short-term and repeatable transactions with customers (like McDonalds) or should your growth be based upon intimate, customized and relationship-based experiences with each and every customer (like a 5-star restaurant)?
  • Focus – Do you need to focus more on internal systems and processes to support your growth (like Walmart) or more on external customers and market trends (like Whole Foods)?
  • Risk Tolerance – Should you try to eliminate all risk before making decisions (like Prudential) or should you encourage and reward smart risk-taking (like Goldman Sachs) to meet your growth targets?
  • Operational Approach – To meet your growth targets, should you strive for low process variation and high standardization (like In-and-Out Burger) or should you encourage employees to treat each job uniquely to meet customer needs (like a high-end consulting firm)?
  • Decision Making – Should the majority of key decisions be made by top leadership (like the US Army) or should the front line be empowered to make key decisions in the field (like paramedics) to support high growth?
  • Results – And lastly, does growth at all costs matter most (like Oracle) or is growing the “right” way of highest priority (like Outward Bound)?

Companies that agree upon how to approach these seven cultural dimensions of growth build strong corporate cultures to support and accelerate growth.

The Bottom Line
Leaders who blithely ignore the stresses that the barriers to rapid growth can place on their strategy do so at their peril.  It is the purposefully aligned organizations who can foresee the barriers to rapid growth and adjust accordingly that will win in the end.  Are your people, processes, systems and cultural norms ready for rapid growth?

To learn more about whether your strategy is set up to overcome barriers to rapid growth, download 7 Ways to Stress Test Your Growth Strategy

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