How to set up your 2024 Goals for Success

It is that time of year again, time to analyze what went wrong, rejoice in what went well, measure your gains, and learn from any gaps. We know that 2024 is going to be full of challenges; from geopolitical challenges affecting our procurement processes, to port congestions impacting our delivery times, to labor shortages threatening our ability to fulfill customer needs.

Nonetheless, having clear goals and plans to achieve them increases our chance of riding out the storm, it can improve the confidence and motivation in our teams, and it can keep you focused through all the noise in which we find ourselves.

After implementing goal-driven strategies across tens of Supply Chains, we put together a list of 5 Tips to help you navigate this time of year. So, whether you already have all your goals and metrics in place or you are just starting the exercise, here are some ideas to keep you on the right track:

1. Forge Your Path

2. Not all Goals and Metrics are created equal.

3. Less is more (unless you are making tacos)

4. Consistency is Key

5. Rely on Brainpower, not Willpower

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Tip 1: Forge your path

We all know the annual planning drill: spreadsheet wrangling, budget battles, and the ever-present pressure to hit those targets. But before you get swept up in the vortex of "same old, same old," let's hit the brakes and give our brains a quick pit stop.

Think about it. Did that "killer inventory reduction" strategy from 2023 still fly after that surprise holiday shipping crunch in December? Does that cost reduction initiative still make sense with the procurement issues we had related to the Russia-Ukraine conflict? Are the metrics that you have been reporting on for the past 10 years still relevant?

The supply chain landscape is fickle and what worked yesterday might leave you flat on your tires tomorrow. That's why taking a mindful moment – a mental pit stop of sorts – to question, re-evaluate, and adapt those precious planning metrics is crucial. Trust your gut, analyze those trends, and don't be afraid to ditch the rearview mirror for a panoramic view of what's truly coming down the road. Remember, a little strategic pit stop now can save you a world of headaches (and missed targets) later. So, put down the spreadsheets (for a moment), grab a latte, and let's plan for a year that's anything but the same old, same old!

Are the metrics that you have been reporting on for the past 10 years still relevant?

Tip 2: Not all goals and metrics are created equal

When setting goals, it’s essential to recognize that there are different hierarchies of goals.

1. Outcome Goals: Think of these as the "big picture" aspirations. They are the results you're aiming for, like becoming the market leader in delivery speed or achieving a specific cost reduction percentage. These goals are vital for setting direction, but they are often influenced by external factors beyond our control.

2. Performance Goals: These are your personal bests, the benchmarks you set for yourself or your team based on past performances. Instead of looking outward, you're focusing inward, aiming to beat your previous records. In supply chain terms, this might mean aiming for a higher on-time delivery rate or reducing average shipment times compared to last quarter. Performance goals are more within your control and are incredibly motivating as they push you to level up.

3. Process Goals: The nitty-gritty of your daily operations lies here. Process goals are all about the "how." They are the actionable steps you take to reach your performance and outcome goals. This could be project-oriented like implementing a new inventory management system, or training staff on the latest logistic software. Or they could be habit-oriented like enforcing a process to be done by your truck drivers daily or holding weekly meetings with your carriers to keep them focused on the metrics that matter to you. These goals are entirely under your control and directly influence your ability to achieve performance and outcome goals.

The major caveat with this approach is that it requires a clear understanding of which process goals impact your performance goals and so on. If you are still on the learning curve, we suggest taking an iterative approach of setting monthly or quarterly process goals to test out which habits end up moving the needle. It will take some iterations but by the end, you will understand your system and you will be in a much better position.

These goals are entirely under your control and directly influence your ability to achieve performance and outcome goals.

Tip 3: Less is more (unless you’re making tacos)

Adopting a 'less is more' approach can significantly refine your annual planning and goal selection. Consider the case of Michael, a Procurement VP from a Fortune 500 with whom we work, we started working with him a couple of years ago as he was settling into his role. He was handed down a list of tens of KPIs for his new role. Each of the KPIs had a specific purpose and role but Michael decided to forge his path and focus on one single KPI, yes, just one customer-centric metric to rule them all. The result has been nothing less than impressive. We have been part of a cascading effect on not only that metric being improved but also some interesting side effects like his team’s recognition as an innovative leader, suppliers that are more engaged and proactive, and most surprising and motivating: overall increased happiness in the teams that report to him.

We wouldn’t advise relying strictly on a single metric as this could leave you with problems like focusing on quantity and foregoing quality. But you could have one key metric that you want everyone to focus on (commonly referred to as an OKR) and then have other metrics that are monitored so that they remain constant (commonly referred to as Health Metrics).

As you sift through potential goals and metrics, it's tempting to cover all bases by setting numerous objectives. However, this can lead to a cluttered strategy, diluting focus and resources. Instead, prioritize lean, impactful goals that directly enhance efficiency and customer satisfaction. As a rule of thumb, we don’t suggest having more than 3-7 metrics with goals. By streamlining your objectives, you not only make your targets more attainable but also allow for deeper, more meaningful improvements. Remember, in a world brimming with complexity, simplicity is your strategic advantage.

Tip 4: Consistency is key

The more you talk about something, the more your team will concentrate on it. What you consistently echo becomes the beat they march to! In our personal lives, we have all seen how quickly New Year’s resolutions disappear, in business, the same pattern repeats itself. It is only leaders who keep their eyes on the ball week in and week out that can change how things operate. Our recommendation is to add a Scorecard section to each one of your weekly meetings to make sure that you are constantly communicating the importance of the goals and metrics. And it is possible, to set data pipelines to automatically send updates and alerts to keep everyone involved.

When goals and metrics remain consistent, teams understand what's expected and can steadily progress toward these targets. This stability allows for long-term planning and continuous improvement, rather than reacting to changing goalposts. Moreover, consistent metrics make it easier to track performance over time, identify trends, and make informed decisions. It encourages a culture of steady progress and accountability, where each team member knows how their efforts contribute to broader objectives. In essence, while agility is vital in responding to supply chain disruptions, consistency in your goals and metrics provides the compass to guide your team forward.

What you consistently echo becomes the beat they march to!

Tip 5: Rely on brainpower, not willpower

Atomic Habits’ author, James Clear, is fond of saying “We don’t rise to the level of our goals, we fall to the level of our systems”. Countless goals have been forgotten and not achieved because leaders failed to set the appropriate systems to support their ambitions. There are several concepts we can borrow from the field of behavioral economics that can help us nurture achievement.

Through a well-designed program, we can introduce concepts such as nudges, incentives, and gamification. Consider framing goals as challenges, celebrating milestones with public recognition, or implementing progress dashboards that spark healthy competition. Research shows that small, positive reinforcements can significantly boost motivation and productivity. Imagine a system where exceeding inventory targets earns teams badges displayed on digital leaderboards, igniting a playful spirit of accomplishment. Or setting up healthy competition between suppliers through the use of leaderboards and prizes.

Remember, it's not just about setting the bar high, it's about creating an environment where success feels not only attainable but exhilarating. So, let's unleash the power of behavioral science and build systems that turn ambitious goals into tangible victories.

The challenges that lay ahead of us in 2024 may be daunting, but we know that armed with the right goals, systems, and analytics you will be better prepared to deal with whatever the year throws your way. As we've seen, forging your path, recognizing the hierarchy of goals, embracing simplicity, maintaining consistency, and leveraging brainpower over willpower are not just tips, but essential strategies for success.

So, as you embark on this journey, be bold, be thoughtful, and let these principles guide you to a year of impactful achievements and growth. Happy planning!