Setting Organizational Goals: Does your team know what to do?

It’s important that nonprofit leaders take the time to define what success looks like.

Do your employees know when they are doing a good job? If you were to ask your team what the most important thing the organization needs to accomplish this year, would you get consistent answers? When your organization’s managers write performance reviews, do they evaluate specific, mutually agreed-upon goals or do they write in generalities about some broad job description?

In the nonprofit world, we can sometimes get caught up in day-to-day firefighting. We forget how important it is for leaders to take the time to define what success looks like in clear, preferably quantitative terms. Quantitative goals lessen the chance for misunderstandings.

Nonprofits work on big, hairy problems that don’t lend themselves to obvious finish lines; as a result, it is up to leaders to help their team recognize when they’re making progress. The clearer your organization’s goals are, the better everyone in the organization is at weighing tradeoffs and making decisions.

And as an organization grows, the executive director or CEO can’t always be available to weigh in on all decisions. Clear organizational goals also help different teams see how they relate to each other and act as part of one unified team. No single team is more important than the organization as a whole.

For the past 30 years, I have worked in management and/or leadership in some capacity for several nonprofit organizations, often focusing on human resources, operations, and strategy. What I have found in both big and small organizations alike is that clarity of purpose turbocharges performance.

One of my favorite ways to begin an engagement is to assess an organization’s collective understanding of what they are trying to do together. For example, I was once working with a small organization (7 employees). I shared a confidential poll that asked the following question: What is the one most important thing for this organization to accomplish this year?

Here are the responses I gathered, which have been edited for confidentiality though they still convey the substance accurately:

1. Double our program partners
2. Add more program partners
3. Break the one-million-dollar fund-raising ceiling
4. Expand our base of support with both institutional and individual donors
5. Reach 5,000 beneficiaries
6. Increase our visibility
7. Continue to prove our own sustainability

Out of seven responses, there were essentially five different answers:

1. Grow program activities (A, B)
2. Raise more money (C)
3. Diversify funding sources (D)
4. Add more end beneficiaries (E)
5. Improve our marketing (F, G)

There were five categories of goals, but no consensus on what success looked like. As I looked at who had submitted the responses, it became clear that everybody looked at the most important goal for the organization through the lens of their own functional responsibility. Instead of unifying the team, the way they perceived their goals actually set the team members against each other.

In an environment as fractured as this, how does an organization make decisions about whether to pursue a visibility opportunity? Does the nonprofit instead decide to use its precious management time to focus on program outreach? If so, should it focus on new partners or new beneficiaries?

On the other hand, while we all know that fundraising is crucial for organizational success, it is almost never the most important reason that a nonprofit organization exists. Unless the organization strictly exists to fundraise for a particular cause, fundraising is an enabler for solving a problem, not an end in and of itself.

So how do you go about setting goals for the organization?

I used to believe that it was the responsibility of leaders to sit and think deep thoughts in order to design the exact right goals for their teams. But I realized that this top-down approach was a recipe for disaster. Top-down goal-setting often resulted in teams questioning the goals’ premise and rationale as well as feeling that their input should have been part of originating the goals.

No one likes being dictated to, especially the engaged and passionate employees of the nonprofit sector. As a result, I’ve found that it is important for leaders to find ways to engage their teams in setting goals that are meaningful and encourage growth. Goals should be achievable through the team’s own actions but also inspire creativity and out-of-the-box thinking to be able to reach them.

Here is an exercise my team of 11 and I have engaged in successfully that can be tailored depending to the size of the organization. For example, larger organizations might do the same exercise through sub-teams or through groups of managers.

1. On a virtual team call, we share a Google doc and ask everyone in the organization to enter what they think the next year’s organizational goals should be. We spend about 10 minutes writing and watching as the document fills up with goals across the organization from program to operations to fundraising.
2. When everyone has had a chance to enter their thoughts, we consolidate similar goals and organize by functional area.
3. We then ask the whole team to prioritize which goals resonate the most with them. We use asterisks in the document so the goals that get a lot of votes are visually distinctive—a virtual version of post-its!
4. This document forms the basis of our eventual top-level organizational goals. We like to start with around six to eight, as this range feels neither constricting nor overwhelming. Similarly, these goals are mutually supportive of each other. There will, of course, be more granular goals under those top-level goals. Also, it is extremely valuable to have an apex goal—often defined as a measurement of your core mission. In my organization, it is always how many jobs we can help create for the poor.

It is important to note that we are not a pure democracy. The management team takes the input of the whole team and makes adjustments based on our assessment of organizational priorities.

However, we begin with a clear grounding in where the team thinks we should go. We can then iterate on the goals based on the team’s analysis of what is possible and what is a stretch for us, ultimately landing on final, mutually agreed-upon goals.

This is infinitely better than the previous top-down process of sharing goals and asking for team reactions, which vary between crickets and protest. Of course, there is still some downhill flow, as it were: organizational goals cascade down to team goals, which then flow down to individual goals.

With this waterfall structure, no one in the organization is confused about what we are trying to accomplish in the coming year. On a quarterly basis, we check on our progress and discuss whether any new information would argue for making changes to this goal.

Admittedly, we are a small organization, but I think this practice could still be facilitated for much larger organizations or, alternately, be done at a team level. It also helps when this operational planning is done within the context of a larger strategic plan, which is completed every three years and involves a broader set of stakeholders.

A Note of Caution

While crisp goal-setting can align teams and clarify purpose, too much emphasis on reaching goals can make for an oppressive organizational culture. No one can predict the future, and a goal set at the beginning of the year cannot anticipate the twists and turns that the year may bring. If your team lives in fear of missing a goal, they will not be able to perform at their best. This is especially true if your compensation system includes performance-based incentives.

The real art to goal-setting is using goals to align and inspire but also knowing when to relax objectives in the face of unintended circumstances (pandemic anyone?). I have always felt that it is better to set high but achievable goals and slightly miss them than to reliably knock off incremental improvements. Your team wants to be working toward something big, but they also need to know that they won’t be punished for taking calculated risks. There is a sweet spot in organizational culture where ambitious goals can inspire both strong individual performance as well as a sense of team camaraderie and mutual purpose.

About the Author

Kate Cochran

Kate Cochran is a fierce believer that global poverty is not inevitable and that entrepreneurialism is one of the sharpest tools to fight it. She is currently CEO at Upaya Social Ventures, a nonprofit organization that accelerates and invests in early-stage companies that create lasting jobs for the poorest of the poor in India. Since 2011, Upaya has accelerated over 65 companies and invested in 28 companies that have created more than 25,000 lasting jobs for the extreme poor in India. Dedicated to proving impact and not just assuming it, Upaya assiduously tracks jobholder income, which shows an average doubling at the household level following a job with an Upaya portfolio company.

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