#25 Setting performance benchmarks for your company using goal trees 🌲

At the end of a long work day have you ever wondered if the work you did was useful or not?

There are a number of reasons why an employee at a company can feel this way.

If a large number of employees often feel this way then the leadership at this company needs to take action.

Leadership must clearly define an organization's purpose, what must be done to achieve it and communicate the same to it's employees.

Once this has been defined and communicated, it should help employees answer the following questions:

• Are we on course toward our goal?

• Are we doing the things we should be doing to get there? What's missing?

• Are we doing things that don’t contribute to the early attainment of our goal? If so, what should we stop doing?

• How do we know when we’ve achieved our goal?

It's not enough for leadership to define only the mission and vision for the company/product/project. Employees should be able to connect their day to day efforts and activities to the company's goal.

How does the leadership at a company solve this problem? One option is to use a goal tree or an Intermediate Objectives (IO) Map, an adaptation of the Theory of Constraints’ Thinking Processes‘ Prerequisite Tree (PRT).

A goal tree is a visual representation of three components - the goal, the critical success factors and conditions necessary  for realizing the critical success factors.

The system's owner get's to define the goal, no one else.

Critical success factors are 3-5 high level terminal system outcomes which, collectively, when fulfilled constitute goal attainment. The leadership team has to define the critical success factors. They should be expressed in measurable units. The critical success factors becomes part of the top management's dashboard, that gets reviewed on a regular basis to see if the organization is getting closer to its goal or drifting away from it.

The entire tree is built on necessity logic i.e. in order to have A we need B, conversely B is absolutely necessary for A to happen. Critical success factors need to be fulfilled in order to achieve the goal, appropriate necessary conditions need to be fulfilled in order to achieve the appropriate critical success factors. This logic ensures that only true necessary conditions are part of the tree, thus eliminating any unnecessary but resource consuming nice-to-haves.

Once the owner and the leadership team has filled in the goal and critical success factors, different departments/functions/units/geographies will plug-in their org's role in fulfilling the critical success factors or necessary conditions. These are filled in as further linked necessary conditions.

The goal tree thus provides the following benefits:

• A real-time benchmark for current system performance

• Where to focus the problem solving efforts

• Basis for long term strategy

• Roadmap for taking action - start from the necessary conditions at the bottom and work your way to the goal

A well defined goal tree will help every employee in the organization to determine if the next task he will perform will take the organization closer to it's goal, no more wondering.