> ## Documentation Index
> Fetch the complete documentation index at: https://guide.exiqtive.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Clarify
> Turn strategy into goals, KPIs, and responsibilities so every employee knows what's expected of them.
Clarify is the first step of the exIQtive method. It connects your strategy to the daily work of every employee through three links: **strategy**, **goals**, and **responsibilities**. Every employee needs all three.
This page explains the thinking behind Clarify. In exIQtive, you define the last link, responsibilities, in your [organization](/organization/understanding-your-organization) and the [Responsibilities Catalog](/responsibilities/catalog).
## Start with strategy
Strategy is a set of choices that gives you a defendable advantage. It answers two questions: **what** will we do, and **why**.
Strategy isn't a plan. A strategy is a set of choices; a plan is a set of actions. Choices tell you which actions are worth taking.
## Turn choices into goals and KPIs
A goal is the destination. A KPI is the gauge that shows whether you're getting there. A goal without a KPI changes nothing. A goal with a KPI changes behavior.
| | Goal | KPI |
| - | - | - |
| What it is | The destination | The gauge |
| Example | Grow revenue 20% | New orders per month |
| Rhythm | Set yearly | Tracked weekly, monthly, or quarterly |
Each strategic choice leads to a goal, and each goal to a KPI:
| Strategic choice | Goal | KPI |
| - | - | - |
| Improve profitability | Reach a 15% margin | EBITDA |
| Increase retention | Keep 95% of clients | Retention rate |
| Improve customer service | Resolve calls faster | Handle time |
| Train customer service | Certify every rep | Readiness score |
### The anatomy of a KPI
Every KPI has three parts:
1. **Metric:** what you count. For gross revenue, USD.
2. **Formula:** how you calculate it. For gross revenue, the sum of products times price.
3. **Target:** the number to hit in a period. For gross revenue, \$100M per year.
### Set targets at three levels
Two common methods for setting targets both go wrong. SMART targets tend to be too safe, and BHAGs (big, hairy, audacious goals) tend to be too far. Instead, set three levels for each KPI:
| Level | Meaning | Chance of reaching it |
| - | - | - |
| **Threshold** | Below expectations | 80% |
| **Goal** | Meets expectations | 50% |
| **Stretch** | Exceeds expectations | 20% |
Three levels give you a shared language for performance, from failed to outlier. They also turn any actual result into a score: below the threshold scores 0, the threshold scores 0.5, the goal scores 1.0, and the stretch scores 1.5. Results between levels score proportionally.
For example, with a revenue threshold of $5M, a goal of $10M, and a stretch of \$20M:
| Actual revenue | Score |
| - | - |
| \$4M | 0 |
| \$6M | 0.6 |
| \$8M | 0.8 |
| \$12M | 1.1 |
Weighted by importance, KPI scores roll up into a single scorecard score.
### Keep your KPIs focused
You get what you measure. The wrong KPI produces the wrong behavior, so check what each KPI will make people do.
* **Prefer company-wide KPIs.** If sales is measured on volume and operations on cost, the two teams pull against each other. Shared KPIs pull them the same way.
* **Limit how many you track.** People hold about seven items in mind at once (plus or minus two). Keep about seven KPIs top of mind and treat the rest as alerts.
## Clarify responsibilities
Strategy and goals only change behavior when every employee knows what they're responsible for. Job descriptions fall short here: they say what's expected but rarely how to do it.
In exIQtive, you describe work as **responsibilities**, group them into **roles**, and attach roles to **positions**. IQ helps you clarify roles and responsibilities, and a person reviews every result. See [Ask IQ](/iq/ask-iq).
Once responsibilities are clear, you can [certify](/concepts/certify) that employees are ready to perform them.
## Related
How positions, roles, and responsibilities fit together.
Find, add, and maintain your responsibilities.
Meet IQ, exIQtive's organizational intelligence agent.
Prove employees are ready for their responsibilities.
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