1) Setting too many goals. If you set up too many goals you run the risk of accomplishing little, as your organization will be confused as to which are the most important. As a result attention and resources will be fragmented and ineffective.

2) Setting goals which are too easy. Sometimes it is hard to tell what the right target is, and as a result you set a goal for a certain area which is easily accomplished. This isnt terrible since of course some improvement has been achieved, but you have perhaps wasted time and organizational effort and you will need to rekindle the team with a new target.

3) Setting tough goals but not providing necessary resources and support. If you do this the organization will work hard but may ultimately lose heart if they cannot make sufficient progress. You may lose not only the goal itself but your own leadership credibility – and your organization will be reluctant to take on other goals in future.

4) Setting the right goals but failing to measure progress on a regular basis. This is especially problematic if the goal is large and longer term. Down the road you may be surprised to see that its accomplishment is seriously delayed, or carries unintended consequences, or even that the goal and its measurement are misinterpreted.

So clearly, setting and achieving goals is not easy and there are important things to keep in mind as you set about doing it. One is to differentiate between two broad categories of goals, which I call continuous improvement type goals, and transformative type goals. The former are analogous to the everyday or monthly goals we set in our personal lives. Theyre in familiar territory, require extra but not extraordinary effort and move us forward – but are not life-changing events.

Transformative goals, on the other hand, are unfamiliar, quite difficult, and take us in entirely new directions. I suggest tackling these two types of goals with different approaches.

Continuous improvement goals benefit from what the literature has labeled a SMART approach: The goals should be Specific, Measurable, Achievable, Relevant and Timely. An example might be the following: Increase unit variable margin on our product line X by 10 percent in 2014 versus prior year. This is specific to the product line, clearly measurable, relevant to the overall business success (assuming that product line X is a significant one), likely achievable (depending on the business environment and other variables) and has clear timing.

SMART goals typically can be assigned to a responsible leader, cascaded through the organization, translated into action plans, and stewarded on a regular basis through the year. This approach should result in either achievement of the goal, or some agreed modification of the goal during the year if circumstances change. With goals of this nature it is often useful to involve the organization in setting the specifics (e.g. Which product line to target? What is the right level of improvement? How long will it take? Should it be unit margin, total margin or what?), in order to optimize the impact as well as get buy-in from those who will be taking the actions.

Transformative type goals may be SMART, too, but will likely benefit from a more top-down yet open-ended approach as follows:

These goals must come from the top leadership team if they are going to transform the company in some way. Only top leadership can visualize and describe the future state in a way which will mobilize the organization.

While it is helpful for the goal itself to be specific, it will likely be unclear how to achieve it. At the beginning of the journey, it will not easily evolve into an action plan with owners and timetables (although eventually this is necessary). Some patience is required as the organization works to get its arms around the size and scope of the goal. It may be that the goal itself changes to a better one, and perhaps even a bigger one, after some work is done.

The goals measure of success should be clearly spelled out, but I suggest that you not try to do this bottom up (that is, by coming up with actions and the increments associated with them and adding them up). Rather, do it by instinct and feel. Set the goal at a level which no one will know how to accomplish and you will get the organization thinking out of the box and exploring totally new ways of doing things, which is what you need to achieve a transformation.

The timetable for transformative change is likely to be longer. It may not matter so much whether it is achieved by 2015 or 2016, but that it is achieved in the right way with the best choices.

Be mindful of company culture when setting transformative goals. If your company culture is one in which advancement or bonuses are based on achievement of numerical goals, then people will be wary of goals which are difficult and different. You may need to reward people and communicate about success in a new way in order to keep motivation flowing in a more uncertain environment, over a longer time scale.

Examples of transformative goals could be: Extend our regional leadership into a nationwide leadership position in category X. Our company will be the leader in region Y in automotive lubricant profitability. Become the most operationally excellent supplier of lubricants in our chosen territory. We will have unique breakthrough technology for the next heavy-duty diesel category, to provide customers with important benefits.

Whether you are working on continuous improvement or a transformation, it pays to think about how to set the goal.

Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. E-mail her at saralefcourt@gmail.com or phone (908) 400-5210.