Objectives are essential roadmaps for driving desired outcomes in professional services firms. They are a strategic management tool that can be used to improve organisational performance by getting employee and supervisor agreement on a set of objectives and improving collaboration.
Most people like having goals in their personal and professional lives. At work, a clear set of personal and organisational objectives can provide the aspiration and inspiration needed to fuel the effort and engagement it takes to reach desired outcomes.
A firm that uses objectives effectively gains momentum. Rather than taking a ‘set and forget’ approach, these firms actively use goal-setting aligned to both organisational and individual objectives and have leaders who regularly check-in with their teams to guide – and be responsible for – progress. Where goals are laid out clearly, things get done because people feel energised to do work that has impact and meaning.
Technology can play a significant role in how objectives are managed. Software platforms can help partners record progress and edit objectives. This data then flows to the contribution review process. The right software can make it easy for leaders to track the progress of the people they oversee. For plan owners, it can also provide a means to stay connected to people across the firm.
There are two foundational aspects of creating a successful approach to objectives:
While there are many objectives methodologies, each has its pros and cons. For example, SMART objectives are well-understood and create a level of detail that demonstrates planning – however they can be repetitive and limit focus to output. In contrast, other methodologies, such as OKRs and Performance Leader’s AIMS methodology, can be more effective in focussing on impact and meaning.
Choosing the right objectives methodology is critical to having a clear and robust objective at the firm level – one that considers common pitfalls and seeks to overcome them.
SMART objective-setting is a popular methodology in professional services firms that creates a level of detail that demonstrates planning.
SMART stands for:
However, the SMART methodology limits a firm’s focus to output. It can be quite repetitive and misses several key elements for setting goals, including engagement, collaboration and agility. For example, the SMART methodology can fail to engage team members by omitting meaning and purpose. It also doesn’t encourage the regular check-ins that allow for agility and can lead to missed collaboration opportunities as shared objectives are not considered.
FAST objectives are also commonly used in businesses – however, they are less popular in professional services firms than SMART objectives.
FAST stands for:
FAST objectives go some way towards addressing the agility and collaboration concerns surrounding SMART goals. Agility is addressed by building frequent discussions into the objectives. The need for collaboration is partially addressed by including transparency in the objectives. However, being able to see everyone’s objectives only goes so far. Actively discovering what other people’s objectives are, then connecting with them, would take the potential created by transparency to the next level.
OKR goal-setting has been popularised by Silicon Valley tech firms. OKR stands for:
The power of the OKR system is in its simplicity. It minimises the number of goals set by a firm and promotes each action as a step towards them. Advocates of the methodology recommend not using more than five objectives at any one time in a performance cycle.
Another concept that the OKR model engages is the ‘top down, bottom up’ approach to leadership. This means that, even when goals are non-negotiable, supervisors should provide some flexibility in agreeing the key result areas.
While minimising goals and taking a ‘top down, bottom up’ approach are key features of OKRs, these concepts can apply to any objective methodology.
Performance Leader has developed the AIMS methodology specifically for the professional services sector. AIMS objectives promote engagement, transparency, agility and creativity in a tailored format and work particularly well for partners and other firm leaders.
AIMS stands for:
AIMS works because it:
The various objective models are designed to align firm and individual goals, such as professional development, remuneration or personal gratification from the work itself. That is laudable, but there is also a role for personal objectives that are only loosely aligned to the firm.
These personal objectives should relate to professional development and, ideally, support well-being or health objectives or long-held personal ambitions. In this way, firms can support the whole person through the goal-setting process.
A key challenge for firm leaders is achieving alignment between the firm’s strategy and individual objectives. Particularly at the senior level, this can take guidance and inspiration rather than heavy-handed management.
There are many methods of aligning objectives, including cascading objectives, strategic pillars, ‘one-up, one-down’ models and communities of interest.
Cascading objectives involves linking goals from one level of the firm to another, usually top-down. The appeal of this approach is that individuals become connected to the firm’s strategic objectives. This type of alignment can create clarity and purpose.
However, in professional services firms, cascading objectives requires assertive leadership to deliver the contingent layers of the model in a timely way. This top-down pressure can demotivate high performers. Another challenge is that cascading objectives work best along functional lines, which means they may not be the best solution in collaborative, sector and client-focused firms.
Arguably the simplest method of aligning objectives is for individuals to align their objectives to the firm’s strategic pillars. The advantage of this model is its simplicity and autonomy.
The success of this model depends on individual discretion and the extent to which an individual is recognised and rewarded for contribution in this area. That is an inherently difficult task because this method, which relies on a higher-level description of the strategic pillar, often lacks context and meaning at the objective level.
The one-up, one-down alignment model blends concepts from the cascading objectives and strategic pillar models. In this model, people responsible for plans align the plans directly with the strategy (one level of plans, not cascading levels). They may also cross-reference other plans. Objectives are then tied to a client or sector plan.
The advantages of this model are that it maintains simplicity, as it is relatively easy to align objectives to plans, and supports autonomy, given much of the onus falls on the individual to set objectives. A potential challenge is in ensuring that that plan owners, individuals and leaders are aligned. To address this challenge, all stakeholders need to agree objectives and share progress and accountability for execution. This collaboration is likely to be aided by technology.
The best objective models and alignment approaches develop strong communication, effective collaboration, transparency and accountability. For firm leaders, this creates strategic focus that drives the right activities. For individuals, it highlights the impact of their efforts and supports personal meaning in their work.
We explore these concepts in more depth in Chapter 12 of our book The Partner Remuneration Handbook: A comprehensive guide to partner compensation and contribution management in professional services firms. You can buy a copy of the book here.
Book a discovery meeting with us to explore your firm’s approach to building a sustainable high performance cultureWatch a 3-minute demoContact us