“Plans are nothing; planning is everything”. Dwight D. Eisenhower

Setting goals is, besides aligning the company with a suitable strategy and creating efficient structures, one of the essential tasks of a company’s management.

This, or something similar, is what I learned during my studies 20 years ago. From my point of view, not much has changed.

It is still important to have a clear strategy, suitable structures and consistent goals across the organization. The big difference to the past seems to be in the planning horizon.

Where in the past you might have set yourself 3 or 5 annual targets, today you often plan in much shorter cycles. This can go so far that in agile projects, large or small, only the next 2-3 sprints (2-4 weeks each) are planned concretely. In the longer term, everyone certainly has and still needs clear ideas, but they are only trend-setting and in broad outlines.

Not so long ago, the focus was often on setting goals and pursuing them with as little deviation as possible. In the meantime, however, one may see it a little more flexible: set goals are also now constantly pursued, but should be able to be changed quickly if necessary, as soon as one notices that they no longer fit well.

These 2 approaches are not so different. However, they have a very different time horizon – long-term or short-term perspective.

So if the cycle of objectives changes due to digitalisation and the associated necessity to be able to react more quickly, the question arises as to what effects this has on our actions in the companies and how this can be anchored anew.

As many have already painfully discovered, the effects are manifold: First of all, there are obviously the corporate goals that are listed on the website, in the annual report and in many other publications as well. There is already a lot of caution at this point, as this concerns external communication. And we don’t want to make any mistakes here.

But what about the internal objectives for the departments, teams and people? The annual targets for employees, for example. Imagine you are a manager and have to complete your projects in short cycles, because you don’t know exactly what requirements you will have at the end of the year to secure your business.

Maybe you’ve started running projects agilely long ago so you don’t have to get involved with long planning horizons. At the same time, however, established processes may prompt you to agree annual targets with your employees. So you set longer target horizons with your employees than for your business. Did something go wrong? Is there a need for repairs here?

So what can targets look like that meet agile requirements?

  • Aligned with the vision and/or the purpose of the company
  • Focused, few instead of many (maybe only 2 or 3)
  • Transparent, so colleagues can see what’s important to them
  • Iterative in short cycles incl. feedback in these cycles (perhaps for a quarter?)
  • Immediate adjustment of goals if something changes. What reason should there be to pursue a goal that no longer has any particular meaning?
  • And of course they should be measurable, unambiguous, comprehensible, etc.

Probably some further requirements could be listed. But what seems to be changing in many companies at the moment is the time horizon of the goals.
To underline this, I would like to point out three already well-known approaches that are used in the agile or VUCA context:

Scrum – at project level

Scrum is a project management method that focuses on short cycles, among other things. It is about targeting long-term product visions and only setting clear, concrete goals in the short term. This method is already so widespread that it can now be found in one way or another in almost every company involved in digitization.

OKRs – at organisational level

“Objectives and Key Results” (OKRs) are an agile framework for goal setting and performance management at the organizational level. With OKRs, the strategy of a company can be broken down, coordinated and linked to measurable goals of the organization in such a way that employees can be better involved.

This applies to corporate goals, team goals and personal goals. Ultimately, it is a matter of talking about goals and progress iteratively and transparently on the basis of agile principles, and it is a matter of thinking objectively and across team boundaries, sharing learnings and quickly readjusting them. Ultimately, this will be
company-wide to leadership, strategy and cooperation.

Thus, OMCs help to strategically align teams at a level above project management, so that they pull together more strongly and even become aware of the higher purpose for which things are being done. Therefore, OKRs also function as a transformation tool, which can be adapted to the
The focus is on the corporate culture and organizational design.

The big challenge with OKRs lies in the coordination between Big Picture and individual or team goals and the adaptation at short intervals.

One or two staff appraisals per year are not enough in an agile context, as it is not possible to give adequate feedback within such a large distance.

In any case, this offers a solution for working with goals in short cycles.

Effectuation – from the perspective of top management

Effectuation is a strategic and operational approach for the VUCA world. If you can’t yet “grasp” the goal because it changes too quickly, it doesn’t make sense to set long-term goals based only on assumptions.

Effectuation focuses on everything that we can shape through our actions when the basis for forecasting and planning is missing: everything that I can shape and control I don’t need to predict. Everything that is based on existing resources and has an affordable loss can be shaped. It is also possible to shape what becomes possible through coincidences and changed circumstances and what results from agreements with partners.

Effectuation stands for very practical rules of thumb for

  • Get started
  • limit risk
  • to negotiate partnerships and
  • cooperate with chance.

Companies that apply efficiency spend less time at the desk and act more quickly. They often do the opposite of what the classic management guide says.

The focus is not on planning, but on working with the existing situation.

Even if Scrum, OKRs and Effectuation serve very different areas, they are based on very similar principles. Among other things, it is about offering solutions that can support us in the fast pace of the VUCA world.

Reference to Scrum:
https://www.scrumalliance.org/learn-about-scrum/scrum-elearning-series

Reference and further sources to OKRs:
https://en.wikipedia.org/wiki/OKR
https://medium.com/the-new-worker/agiles-ziel-performance-management-mit-okrs-e0316a292e17
https://hrgoesagile.com/2018/06/01/ziele-in-agilen-unternehmen/

References to Effectuation:
https://www.effectuation.at