By Bill Letendre, MSPharm, MBA, PCCA Vice President of Pharmacy Management Services

If you read the literature on the topic of goal setting, business experts refer to the reasons why setting goals is one of the best practices a business owner can adopt. Many concur that you can accomplish more and go farther if you dedicate yourself to written goals, keep the goals on your organization’s and your personal radar screens, and follow through on the steps required to achieve them.

Business expert Angelo Kinicki, who co-authored the textbook Organizational Behavior, found that 68 out of 70 organizations examined in various studies enjoyed productivity gains as a result of management by objectives. Goal setting is the first step in management by objectives. “Research on goal setting shows that it’s a very powerful technique to improve individual productivity and organizational productivity,” says Kinicki. Another business expert, Rick Houcek, states, “Goals give us focus, get us going, add to our resolve and lead to actions. This is a common element of high achievers. In writing goals, high achievers are prepared to risk failure — and the demands of success.”

Types of Goals

These experts warn that when setting goals, finding the right amount of “stretch” — for growth — is crucial for an organization. Goals that are too easy do not boost performance, so they are of little value. Studies report that it is best to challenge employees, and expect them to challenge themselves, with goals that are attainable but that will require considerable effort. Kinicki provides another caveat when setting goals as well: Don’t fall prey to the allure of setting only financial goals. In doing so, it may compromise the other reasons you are in business — such as employing people and contributing to your community. He postulates that there are four corporate goal categories:

• Financial — although an important driver, it should not be the only focus.
• Customer service — in the pharmacy compounding industry, this may be the most important goal to focus on.
• Employee based — these goals should focus on personal development and innovation and are a very important component for a successful compounding pharmacy.
• Internal business process — in a compounding pharmacy, this may focus on lab efficiencies as well as research and development efforts.

Although one might intuitively believe that including employees in the process of setting goals will result in better performance, studies report that is not the case. Whether they set goals for themselves or are assigned goals, one method does not appear to be better than the other. What studies do find is that the more closely a manager can match the goal-setting style with the employees’ wishes, the better the chances for an outcome everyone seeks.

Kinicki also warns that bonuses and other pay-for-performance incentives that are gaining in popularity may not always work as one would expect. He says, “Pay should not be linked to achieving goals unless:

• The performance goals are actually under the employees’ sphere of influence.
• The goals can be quantified and then measured.
• Frequent and relatively large payments are made for achieving goals.

If these three conditions are not met, undesirable outcomes are possible. Other studies have shown that quality suffers when quantitative goals are given highest priority.”

Setting goals for next year should be a priority for your compounding pharmacy. If you have not completed this exercise yet, I urge you to do so today. Follow the best practices reported in this article. The experts all agree that writing your goals and keeping them on your radar screen will result in a more effective performance next year. For a step-by-step guide to help you sit down and develop your goals, read my previous blog post, Pharmacy Goal Setting for the New Year .

Key Points

• Write down your goals and keep them on your radar throughout the year.
• Make sure your goals are attainable but not easy.
• Don’t just set financial goals; consider goals that focus on customer service, employee development, and internal efficiencies or innovation as well.
• It’s not necessarily a requirement to include employees in goal setting, but it is important to match your goal-setting style with what your employees want and how they work.
• Be careful with pay-for-performance incentives because they can be detrimental if not done right.

Bill Letendre, MSPharm, MBA, PCCA Vice President of Pharmacy Management Services, has been honored as a Fellow of the American College of Apothecaries, the American Pharmacists Association and the Alliance for Pharmacy Compounding. Past president of the New Hampshire Pharmacists Association (1981), the American College of Apothecaries (1982) and the Texas Pharmacy Association (2003), Bill currently serves on the Board of Commissioners for the Accreditation Commission for Health Care. Bill previously owned and operated six community pharmacies, two home infusion pharmacies and a home care supply company located in the state of New Hampshire.

Photo by Amy Hirschi on Unsplash.