Setting Effective Goals Using Indicators of Performance

Why is the beginning of the year a time when people like to set goals; Isn’t January 1 just another day like April 13th? The answer is, people like to use January 1 as a time to set goals and make resolutions because it is a quantifiable milestone – the beginning of a new year. Similarly when setting goals, you must try and quantify them (i.e. make them measurable) so that you can easily track and determine if you achieved what you set out to. Setting a goal like, “Lose a lot of Weight” is meaningless. You want to turn your goal or resolution into a well defined Indicator of Performance (IOP), something solid and realistic to aim for.

An IOP is basically a goal or target that is quantified (measurable by numbers) so that you can track your progress towards it. IOPs should also be as simple as possible and defined in a single statement with a clear measurable target and time frame. Here are some examples of good indicators of performance, based on common resolutions people adopt throughout the year.

- Lose 20 pounds by September 2009.

- Cut my credit card debt by $6000 before October 2009

- Make 2 extra mortgage payments by December 2009.

- Learn basic Spanish by Sep 2009 before my Mexican holiday

- Send an email to 10 friends I have lost touch with, by April 2009

- Grow my blog revenue and subscriber base by 20%, by the end of 2009

You can see how simple, yet specific the above are. However it does take time to “develop” good IOPs that are well defined and realistic. Ensure you have an action plan (written down if possible) as to how you will achieve the IOPs. You should develop this plan when you set the IOP so that you pick targets that are achievable.

Review and revise IOPs regularly. Ideally you want to review your IOPs monthly to ensure you are on track, but for year long IOPs you can review quarterly. I would recommend against adjusting your baseline targets unless you have very good reasons. If you have to keep changing your IOP, it was probably because you didn’t spend enough time thinking about it upfront or lost focus during the year. But don’t worry, after using IOPs for one year, you will get very adept at setting them and soon realize why they are so effective for goal setting.

I recommend setting 4 to 6 primary IOPs (must-do’s) and a few secondary (nice to accomplish) ones. The more you achieve the more the rewards. Because your IOPs are short and specific, they can fit onto a small piece of paper which you can carry with you at all times in your wallet or purse to constantly remind you of what you are aiming for.

Photo credit: akseabird

Other posts which can help you with effective goal setting:

- Time To Set Goals For The New Year: Why Goals Are Important
- My New Years Resolutions
- New Year, New Try
- How to set SMART financial goals

{ If you have any other good articles/posts related to goal setting, leave a comment (with link) and I will add it to the list after reviewing it}