How professional services firms lose 20% productivity without a modern goal-setting system

I’ve worked for more than three decades in technology and professional services firms across five countries, and I’ve seen countless areas where teams could have improved productivity and effectiveness. But one issue stands out above the rest.

Most professional services firms are full of smart, hardworking people. Yet many operate in a constant state of busyness without real progress. It often shows up in botched up situations e.g. Projects stalling or running over budget, teams working at cross purposes and quarterly reviews ending in confusion instead of clarity. It’s tempting to blame a lack of effort or skill, but the real culprit is more subtle and much more damaging: unclear goals.

Research consistently shows that unclear goals can reduce productivity by approximately 20% or more (Locke & Latham, 2002; McKinsey & Company, 2014; Gallup, 2023).

That’s the equivalent of losing an entire day of work from every employee each week. For mid-sized firms, the impact on margins, client satisfaction, and retention is enormous, and mostly invisible.

The best part is, it’s relatively easy to fix if the leadership team commits to it.

Why Unclear Goals Cost More Than You Realize

Unclear goals rarely look dramatic on the surface. No alarms go off, and no systems crash. But the hidden costs build up every single day.

Here’s how they show up in practice:

Low Accountability: When goals are vague, it’s hard to measure progress or hold anyone responsible. Conversations about performance become subjective, which demotivates high performers and allows underperformance to continue unchecked.

Poor Resource Allocation: Without clear priorities, leaders struggle to decide where to focus time and resources. Some areas get overcommitted while others are neglected, making the entire operation less effective.

Rework and Redundancy: When objectives aren’t specific, teams waste time duplicating efforts or working on conflicting priorities. In project-based businesses, this leads to significant billable leakage.

Slower Decision-Making: When teams aren’t sure what matters most, decisions get delayed. Clients wait longer for answers, and opportunities slip away.

In an industry where utilization and project margins drive profitability, even small inefficiencies add up fast.

The 20% Productivity Gap: What It Looks Like in Real Life

Let’s look at an example.

Imagine a 60-person consulting firm where each employee generates about $180,000 in annual revenue.

A 20% productivity loss translates to $2.16 million in lost value every year, Dozens of hours each week spent on uncoordinated work and unnecessary stress and turnover as teams scramble to realign

Here are a few scenarios that probably feel familiar:

The Lost Week: A project team spends days preparing a proposal, only to realize someone else was already working on a similar version or that a ready-made template existed but no one knew about it.

The Misaligned Quarter: Leadership sets ambitious annual growth targets but never translates them into clear team-level priorities. Teams end up investing energy in low-priority tasks because they can’t see how their work connects to the bigger picture.

The Invisible Bottleneck: High performers quietly pick up the slack while underperformers drift along, eroding morale and creating hidden risks for the business.

Most firms don’t realize how much they’re losing until they stop and measure it.

Why Traditional Goal setting Falls Short

Many firms still rely on spreadsheets, email threads, and static presentations to track goals. While familiar, these tools have real limitations:

Lack of Visibility: When objectives aren’t transparent, teams have no way to see how their work contributes to overall goals. Silos persist, and alignment suffers.

No Real-Time Updates: Progress reviews happen sporadically. By the time problems surface, it’s often too late to adjust course.

Disconnected from Execution: Annual or quarterly goals often sit in forgotten documents while client demands take over day-to-day work.

No Consistent Language: Without a shared framework, each department uses different terminology, metrics, and definitions, creating confusion and friction.

These traditional approaches might have worked when firms were smaller and simpler. But in today’s fast-paced, project-driven world, they simply don’t scale.

What High-Performing Firms Do Differently

Leading firms have moved beyond static plans. They’ve embraced modern goal-setting frameworks like Objectives and Key Results (OKRs) to bring clarity and accountability to every level of the business.

Here’s what that looks like in practice:

· Clear, Prioritized Objectives: Each quarter, firms define a small number of high-impact objectives that everyone can rally around. The focus is on measuring what matters most.

· Measurable Key Results: Instead of vague aspirations, success is defined by specific, time-bound metrics that teams agree on together.

· Transparent Alignment: Objectives are visible to everyone, so it’s clear how each team’s work contributes to the bigger picture. Objective Trees make it easy to see how company-level goals translate into division, department, and team goals.

· Regular Reviews: Progress is reviewed weekly or monthly through consistent check-ins. This creates opportunities to course-correct before issues escalate.

· Purpose-Built Platforms: Instead of scattered spreadsheets, modern OKR software like Stragiliti OKR (www.stragiliti.com/okr) provide a single where goals, progress, and accountability live together.

The result is faster decisions, better resource allocation, and teams that know exactly what success looks like.

Quick Wins to Start Closing the Gap

You don’t have to launch a massive transformation to see results. Here are a few simple steps you can take this quarter:

Do some quick research on OKR’s. The web is awash with information about setting Objectives and Key Results. Then set up a workshop with your leadership to set up practical OKR’s for the next quarter. Ensure that it is a collaborative effort, and once set, track progress at least three times within the quarter via check ins. You will see the difference. In case you need help with this, give me a buzz.

Of course, this is just a starting point. A more comprehensive approach might look like this:

· Decide to implement an organization-wide framework like OKRs

· Help senior management get familiar with the core concepts and how to apply them

· Appoint a coach — internal or external — to guide the rollout step by step

· Host a leadership workshop to finalize quarterly OKRs together

· Have the leadership team adopt OKRs at their level (function or business unit)

· Track progress closely, define initiatives to meet goals, and course-correct each quarter

· Choose a tool like Stragiliti OKR to make adoption easier and standardize best practices

· Focus on improving the quality of OKRs and building adoption across teams, prioritizing the goals that move the needle most.

If you’d like to learn more about how Stragiliti OKR can help your firm close the 20% productivity gap and open new opportunities, let’s connect or explore more resources on our website www.stragiliti.net.