The downside to goal setting

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road* by Maureen Collins

It is common knowledge – as well as common sense – that if you want to get the best performance from people, you must be clear on what you want them to do. That has been the starting point for an industry that has arisen around writing goals and objectives, targets, standards, key performance areas and indicators, outputs and BHAGs – Big Hairy Audacious Goals. Even the best remedies however have side effects, and there are several that come with goal setting. One of the most serious is that you get what you ask for…

The good vs. the bad in goal setting

When CEO Lee Iacocca of the Ford motor company announced the goal of producing a new car, the Ford Pinto, that would be “£2000 and under $2000”, within a tight deadline, managers met the objective by signing off on safety checks that had not been properly carried out. One of these checks was on the placement of the car’s fuel tank. Fifty-three deaths, many injuries and expensive lawsuits later, highlighted the fact that the design of the fuel tank caused it to ignite on impact, and that poorly performed safety checks had not picked up the fault. At Ford, managers had worked to the specified goals of speed to market, fuel efficiency and cost, at the expense of other goals that were not specified, such as safety and ethical behaviour.

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There are many other examples. When salespeople are measured only on revenue targets they are likely to bring in poor quality business with low profit margins. Call centre agents become short and abrupt with clients when they are measured only on the number of calls they process per day. Managers run down stock levels toward the end of a financial period so they can make the figures look good. Focus on production outputs and mere compliance with emission control standards encourages people to overlook the broader environmental effects of their business practices.

People pay most attention to the things that are being measured, and for which they are being rewarded. Ironically, the more efficient your reward system, the more serious the consequences if goals are misdirected. You require strong values and executives who model ethical and co-operative behaviour to survive the effects of an aggressive management by-objectives-only process where the focus of the objectives, if followed thoughtlessly, could be damaging to the business.

Ends justify the means?

Goals can encourage unethical behaviour when people start to believe that the ends justify the means. Hours are billed that are not worked, repairs are carried out unnecessarily and sales reports or financial statements are falsified, sometimes with dramatic consequences. At the corporate level leaders who conflate business goals with their personal ambitions, and are unwilling or unable to back down under the spotlight of public expectation and opinion, can lead their organisations into unethical behaviour and excessive risk taking. The financial meltdown of 2008/2009 contains many examples.

A bar too high

Setting challenging goals and objectives to which people are held accountable, would seem the best way to inspire them to perform at their best. However, goals that are too high cease to motivate if people see no point in even trying to achieve them. A focus on individual goals may also destroy the cooperative behaviours that hold groups together.

Another downside is that people may stop experimenting and learning as they focus only on obtaining results. Goals can inhibit learning when they provide no reward for time spent looking for alternative routes and different solutions. This applies to complex tasks in changing environments – when “the way we’ve always done it” may not be the best way this time around – but where there is no motivation for people to stand back and look for alternative strategies.

Some organisations  use learning or personal development goals that focus on developing new competencies. But in practice managers often have trouble determining what these competencies should be or when they are appropriate. In addition, when they are not included in the reward system they are seldom given any priority.

Fear of failure

Lastly, there is always the possibility that goals will not be reached. People seldom handle failure well and are liable to become demotivated, questioning both their own abilities and those of the managers who have set the goals in the first place. When consideration of business ethics, organisation culture and teamwork, safety, and environmental impact is important, narrow, output-oriented goals can be dangerous. If you work toward them, you will most likely get what you have been aiming for. Be sure it is what you want.

This article first appeared in Your Business Magazine.

* Maureen Collins’s experience is in management and leadership training; team building, and handling change and transition. She is also the author of Straight Talk: Conversations at Work That Get Results. For more visit: www.straight-talk.co.za.


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